Liquidation of legal entities
Liquidation of a legal entity means its cessation without succession of its rights and duties to other entities.
A resolution to liquidate a legal entity may be passed:
- by a company’s members;
- at the request of creditors;
- at the request of government authorities.
The following are referred to the official procedures of legal entities’ liquidation:
- Voluntary dissolution of a company by resolution of its founding members.
- Removal of a non-operating company from the unified state register of legal entities by decision of tax authorities.
- A company’s bankruptcy.
- Forced liquidation by a court decision.
Our company can provide legal support in any type of liquidation.
As a rule, the official procedure of a legal entity’s procedure by a resolution of its members takes from four to ten months.
The voluntary dissolution procedure includes:
- Adoption of a resolution to liquidate the company, appoint a liquidator, and notify a registering authority.
- Publication a notice of the company’s liquidation. Notification of its creditors and consideration of claims by the liquidator.
- Tax auditing (verification with data of tax authorities).
- Preparation of an interim liquidation balance sheet and notification of a registering authority of its preparation.
- Settlements with creditors.
- Distribution of the company’s remaining assets.
- Registration of the company’s liquidation balance sheet. Removal from the companies’ register.
So, what are the advantages of dissolution by members’ resolution?
Advantages of voluntary dissolution:
- ultimate termination of rights and duties of a liquidated entity to any third parties and government authorities; no further examinations may be initiated;
- after liquidation, authorized authorities and creditors will not be entitled to lay any claims (demand performance) if they failed to lay their claims before or during the liquidation procedure (within the period established for laying claims);
- a liquidated company is not subject to claims of investors, penalties (unless they occurred during the company’s continuing operation), or consumers’ claims.
If:
- the company fails to submit reports within the recent 12 months;
- the company had no transactions in any bank account within the recent 12 months;
- a decision to remove that company from the unified state register of legal entities by a tax authority’s decision.
Stages of liquidation:
- A tax authority issues documents confirming that no transactions were made in the account and no tax reports were submitted, and sends them to a registering authority.
- A registering authority decides to remove that company from the unified state register of legal entities. If bankruptcy proceedings are initiated against a company, that company may not be excluded from the register.
- Within three days after such decision, the registering authority publishes a notice of forthcoming removal of the company from the unified state register of legal entities in the Public Registration Gazette.
- The Public Registration Gazette weekly publishes such notices. The notice must specify the manner and terms of sending applications, including the address for sending relevant applications.
- The applications may be sent from the company, its creditor or other person whose rights are affected, but in any case not later than three months after the day when a decision on the forthcoming removal from the register is published.
If applications are sent:
- no decision to remove a non-operating legal entity from the unified state register of legal entities may be made;
- the legal entity may be liquidated as prescribed by the Civil Code of the Russian Federation.
If no application was sent:
- the registering authority removes a non-operating company from the unified state register of legal entities by making a relevant record.
In fact, there are no established liquidation period for that procedure; however, a decision of removing a company from the unified state register of legal entities may be appealed against within a year.
Bankruptcy procedure for a legal entity — CLICK-THROUGH TO BANKRUPTCY.
Stages of liquidation:
- A tax authority issues documents confirming that no transactions were made in the account and no tax reports were submitted, and sends them to a registering authority.
- A registering authority decides to remove that company from the unified state register of legal entities. If bankruptcy proceedings are initiated against a company, that company may not be excluded from the register.
- Within three days after such decision, the registering authority publishes a notice of forthcoming removal of the company from the unified state register of legal entities in the Public Registration Gazette.
- The Public Registration Gazette weekly publishes such notices. The notice must specify the manner and terms of sending applications, including the address for sending relevant applications.
- The applications may be sent from the company, its creditor or other person whose rights are affected, but in any case not later than three months after the day when a decision on the forthcoming removal from the register is published.
If applications are sent:
- no decision to remove a non-operating legal entity from the unified state register of legal entities may be made;
- the legal entity may be liquidated as prescribed by the Civil Code of the Russian Federation.
If no application was sent:
- the registering authority removes a non-operating company from the unified state register of legal entities by making a relevant record.
In fact, there are no established liquidation period for that procedure; however, a decision of removing a company from the unified state register of legal entities may be appealed against within a year.
Bankruptcy procedure for a legal entity — CLICK-THROUGH TO BANKRUPTCY.