Blog Liquidation of company
Liquidation of inactive legal entity by the tax authority is a multi-stage procedure, which takes place in strict compliance with legal requirements. Commercial organization is not considered dissolved even if it has ceased to conduct its business activity until the relevant entry in the registry about it has been made.
Liquidation of a foreign legal entity is a multistage procedure introduced by the state and resulting in cessation of operations by companies. After a company officially closes, these data are recorded in the corresponding register and the company is registered as liquidated. At the same time, all its subsidiary offices abroad should also commence the liquidation procedure according to the legislation.
The liquidation of a legal entity with debt without bankruptcy is a complex multi-stage procedure that should be carried out by qualified lawyers. It requires careful compliance with law. The grounds for liquidation, as well as procedure for the enterprise and its debtors are described in a number of laws, including federal law “On Insolvency (Bankruptcy)”.
A company may be deemed to have been dissolved and ceased to exist only after it has been recorded in the registry. Thus, the final stage of liquidation of any enterprise is the state registration of the liquidation of the legal entity. Without an entry in the register, the company cannot cease to exist, relevant changes are made by the Federal Tax Service or the Registration Centre.
Compulsory liquidation of a company is a process of closing a company initiated not by the managers or founders of the company. Simply put, the procedure is initiated by third parties, usually tax authorities or creditors. The procedure for compulsory liquidation differs from voluntary liquidation, when the founders themselves are the initiators of the closure of the LLC.
Liquidation of an LLC is a process of voluntary or forced closure of a company, which involves a complete shutdown of the company, including staff reduction, shutdown of production and any other activity, completion of settlements with counterparties. Dismissal of employees is the termination of employment relations between an employee and an employer at their own request, by agreement of the parties or on the occasion of other circumstances provided for by the Labor Code of the Russian Federation.
Cancellation of decision on liquidation of legal entity is procedure provided for by legislation of the Russian Federation. It is possible to stop winding up of commercial organization at any stage, but only until the moment when changes are entered into register.
The liquidation of a limited liability company is the complete cessation of the company’s work from the point of view of an economic entity, as well as the closure of the LLC itself without transferring it to another person.
The official winding up of a legal entity is a difficult procedure which takes time and requires concerted actions of a huge number of professionals. First of all, executive bodies inform about the beginning of the procedure through the media, then they appoint a commission and draw up an interim balance. Once the debts are settled, the companies approve the final balance. It is also necessary to fire the employees, pay salaries and compensation to employees – and this is not the complete list of actions.
The company is operating until an entry on the termination of its activities appears in the state register. The liquidation procedure is complicated and prolonged, and if the norms of the law are not observed, it will not be possible to liquidate the business.
Subsidiary liability (CO) is one of the types of liability that occurs in the event of bankruptcy of the company and the formation of debt. In this case, the head of the legal entity will be obliged to repay the debt from his own funds.
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.
Liquidation of a legal entity is a procedure provided for by law in order to terminate activities without transferring rights and obligations to other persons. Termination of the operation of an enterprise that is registered as a legal entity is a process, each stage of which is regulated by the legislation of the state. In case of its violation, the procedure may be delayed for a long time or come to a standstill, which is not beneficial for the owner of the company, and also threatens with various fines.
Russian legislation provides a special procedure for the final termination of commercial activity, without transfer of rights and obligations. Each stage of legal entity’s termination is regulated by law. In case of law violation, the procedure may be delayed for a long time or come to a standstill, which is disadvantageous for company’s owner and threatens with large fines.
The procedure for the termination of the company is regulated by law at each stage. Not only the owners of the company can dissolve a company: this process can also be initiated through a judicial proceeding. However, for any company, non-judicial liquidation of a legal entity is the best outcome, since it does not involve additional risks for the reputation and finances of an enterprise.
