Appeal against a decision to liquidate a legal entity

Jan, 16 2020

A legal entity can be liquidated voluntarily and forcibly, as well as if it is declared insolvent. In case of voluntary liquidation, the reason for such a decision can be expiration of the deadline or fulfillment of its company’s objectives. When a legal entity is forcibly terminated (for example, based on a court decision), mistakes are often made. In such cases, the owners have a question: is it possible to appeal the decision on the liquidation of a legal entity.

With the voluntary liquidation and termination of activity after the company is declared bankrupt, usually there are no problems and misunderstandings. But before appeal against decision on the liquidation of a legal entity by force, it is necessary to identify the reason why its activity was terminated. It can be:

  • gross violations of law, committed during the creation of company (if such violations cannot be eliminated);
  • the company carries out activities without a license, or if such activity is contrary to law;
  • repeated violation of the provisions of the charter of a nonprofit organization and the performance of activities contrary to its objectives.

Who can appeal the liquidation decision?

If interested parties have doubts about the accuracy of the liquidation procedure, they have three months to appeal such decision. In which cases can a decision to terminate a company be appealed? For example, creditors can go to court and appeal the previous decision if they have not received previously invested property or money. Also, the participants of the company can appeal the liquidation in court if the legal entity is closed at the initiative of the tax authorities.

Who can challenge the liquidation decision:

  • participants (shareholders, members) of a legal entity may file a claim on the invalidity of the record of termination of activity in the Unified State Register of Legal Entities (USRLE);
  • creditors who do not receive their funds can file a claim and appeal liquidation process;
  • tax authority.

A claim to appeal a decision on the liquidation of a legal entity may be filed both against the tax service, if the procedure was initiated on its initiative, and against the liquidation commission.

Grounds for appealing the liquidation decision

To file a lawsuit, it is necessary to indicate the reasons why the plaintiff wants to recognize the liquidation of the company invalid. The grounds can be:

  • non-compliance with the procedure of liquidation of a legal entity;
  • lack of arguments for the termination of the company;
  • inaccuracy of information used as grounds for liquidation.

In accordance with the arbitration procedural legislation of Russia, any interested party may appeal to the arbitration court and demand that its decision be declared invalid. It is also possible to recognize the actions / omissions of bodies or officials exercising public authority as unlawful.

In the event if the appeal of decision on the liquidation of a legal entity is directed to the liquidation commission, it is necessary to prove the violations committed during the liquidation process. In this case, the grounds for appeal may be as follows:

  • undue informing of creditors about the liquidation of the company or failure to inform at all;
  • intentional underestimation of the value of property or securities of an enterprise;
  • undue submission of important information to specialized media or government agencies.

Terms and methods of appeal of liquidation of legal entities

When submitting an appeal, it is necessary to comply with the deadlines allocated to this procedure by the government. In accordance with the law, time to start litigation is three months from the moment this information was published in open sources. If there is a sensible reason for violating the term, the court may restore it.

There is also a special period of one calendar year. The special period is valid for persons whose rights and interests have been violated because of the liquidation of a legal entity.

A notice of liquidation of the company through the trial or voluntarily should be posted in the “State Registration Bulletin”.

Procedure for judicial appeal of a company liquidation order

As in the case of registration, the termination of a legal entity is a process that occurs in several stages. Judicial appeal also occurs in stages. The general sequence in contesting the liquidation of a company is as follows:

  • receipt of information that the Uniform State Register of Legal Entities (the register) made an appropriate record about the termination of the company;
  • collection of documents proving that the court ruling was unlawful;
  • preparation of lawsuits by lawyers and their registration with the court;
  • handling complaints;
  • appeal against the liquidation of a legal entity by a tax authority, creditors or company participants;
  • enforcement of a court decision.

In case of successful outcome, the record of liquidation of the company is deleted from the register by judicial procedure. If a lawsuit was filed by creditors, then the successful outcome does not mean a full return of invested funds or property. In this case, a separate lawsuit should be filed to recover the debts.

Please note that the court may not satisfy the requirements of the plaintiff. This happens for several reasons. For example, there is a lack of documents. In this case, the judiciary may reject the review of the complaint. Also, the reason for the refusal may be lack of notarization of documents or the necessary signatures, data mismatch, delay.

Documents required to challenge the liquidation of a legal entity

The set of documents depends on who is the initiator of the litigation: the creditor or participant (shareholder) of the organization.

A participant or shareholder of a legal entity needs the following set of documents:

  • constituent documents;
  • liquidation balance sheet;
  • documentation confirming settlements with creditors;
  • documents confirming the active economic or other activities of the company.

When the liquidation of the company is disputed by the creditor:

  • documents confirming the existence of receivables;
  • the full amount of correspondence received (from the moment the liquidation procedure began), proving that a written notice of termination of activity was not received;
  • inventory documents indicating the non-return of property transferred for use.

Our company services

VALEN lawyers will help you with all the necessary procedures related to appealing the decision on the liquidation of legal entities. We provide support at all stages:

  • advice on all matters related to judicial appeal;
  • preparation and certification of necessary legal documents;
  • submission of documents to authorized bodies and their receipt;
  • legal support in appealing liquidation decisions.