Repeal of decision to liquidate a legal entity

Feb, 25 2020

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.

How is the decision on termination of business made?

To understand when it is possible to cancel liquidation of legal entity, it is important to know on what grounds company ceases to exist. It occurs in one of two forms: voluntary or forced. In other words, procedure is initiated either by business owners themselves or by court. Voluntary suspension of activity is preferable, because it helps to maintain reputation, reduce risks of fines, save time on litigation.

Law states that voluntary winding up of business activity is possible due to decision of founders or with participation of company’s authorized persons. When does need for this difficult step arise? Most often, entrepreneurs close company after expiration of a period for which it was created. Another option is to achieve goals for which business was organized. In such situations, founders or management make an official decision to stop business activity. After that, multi-stage procedure for winding up of company begins.

“State Registration of Legal Entities and Individual Entrepreneurs Law” provides for procedure for terminating business, as well as a list of documents that should be submitted to authorities. However, cancellation of liquidation of legal entity may occur without consent of business owners. In such cases, court intervenes in case and defines termination of company as illegal act.

When is it necessary to cancel liquidation of a legal entity

Legislation obliges founders to immediately notify authorized state registration authority about termination of activities to amend register. It is imperative to inform authorities in written form after that official press publishes information about process of winding up of business. Unified State Register of Legal Entities (USRLE) notes that company is in process of liquidation.

However, decision to liquidate a legal entity can be canceled at any stage of procedure. Law provides many possible reasons for such actions. Business owners themselves can stop process by submitting application to the tax authorities or the arbitration court. Creditors of a company to whom debt obligations have remained are entitled to demand termination of procedure.

Main issue addressed to lawyers is not reasons for terminating business winding up process. Main difficulty is how to do it without extra costs. For example, when you want to close an LLC quickly in order to avoid losses, we recommend you to consider a simplified liquidation scheme. Also, if LLC is not operating yet, its activity may be suspended, but not terminated. It is not necessary to immediately close company that has temporarily ceased to conduct business activity.

Repeal of decision to liquidate legal entity: sequence of actions

When it is necessary to cancel decision on liquidation of a legal entity, first thing to do is to file official notice. To begin with, you send written message to same department with which you talked about termination of business. To do this, you need to prepare form No. Р15001 with new request attached to it. Entrust lawyers with preparation of required documents so that your application is completed without errors.

If cancellation of decision on liquidation of a legal entity occurred before you had time to inform authorities about your desire to terminate company’s activity, you do not need to contact registration authorities. However, remember that without notifying state authorities, termination of a company cannot be considered legal. And according to tax authority, you will have to file reports and pay taxes, even if in fact company has not been working for a long time.

Tax authority is notified of cancellation of liquidation of legal entity in person or through representative by proxy. It must be certified by notary; without this, document will not be considered competent. You can also contact authorities by mail or online. If we are talking about LLC with one participant, fill out decision to terminate procedure. If LLC has several participants or if we talk about joint-stock company, minutes of meeting will be required.

In addition, cancellation of decision on liquidation of a legal entity may occur through court. For example, court has right to invalidate decision of LLC participants to terminate its activity, at request of one of members. Of course, there must be good reason for this. You can also appeal actions of tax authority. To challenge entry in the Unified State Register of Legal Entities, the law gives one year from the date of the company’s termination.

Informing on cancellation of voluntary liquidation of a legal entity

Duties of a liquidation commission include publication of information about termination of a company. Commission should also contact creditors to whom company has debt obligations. It is important because they have right to make claims and collect debts. Otherwise, we will talk about bankruptcy of enterprise.

When company officially ceases to conduct its functions, it is believed that debtor has fulfilled obligations to creditors because they are given time to declare their requirements. But when voluntary liquidation of a legal entity is canceled, the obligations are valid again. For example, lender could not request compensation in time, but if business termination procedure is terminated, company still has to repay loans.

Law does not require to inform creditors in case of voluntary cancellation of termination of legal entities. However, although you will not be sued, it is worth doing to maintain your own business reputation.

VALEN lawyers will help you with all necessary procedures related to winding up of business and termination of this procedure. We provide support at all stages:

  • advise on issues related to termination of commercial organization and revocation of decision;
  • prepare documents on behalf of founders of a company, notify creditors, prepare balance sheet;
  • execute cancellation of earlier decision to dissolve a company;
  • fill out appropriate forms of documents, certify them if necessary;
  • submit documents to authorized bodies and receive papers confirming completion of necessary actions;
  • provide comprehensive legal support in appealing against liquidation decisions.

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