LIQUIDATION OF A LEGAL ENTITY

Unfortunately, martial law makes adjustments to all spheres of life and activity of citizens. Therefore, entrepreneurs often face crisis situations in doing business, starting with the impossibility of selling or producing goods and ending with the fact that foreign partners simply leave the Ukrainian market for various reasons.

So, let's take a closer look with you, what is this terrible word - liquidation? What are the grounds for this liquidation, under what conditions can the Company start the liquidation procedure, and of course we will figure out how this whole procedure goes, the necessary documents, etc.

The Civil Code of Ukraine, namely Article 104, defines the concept of termination: a legal entity is terminated as a result of reorganization (merger, accession, division, transformation) or liquidation.

Consequently, the liquidation of a legal entity is the termination of the existence of a legal entity by making an appropriate entry in the Unified State Register of Legal Entities and Individual Entrepreneurs.

The legislation provides for the following grounds for liquidation:

• by decision of the owners of the legal entity;
• by a court decision that is not related to bankruptcy;
• through bankruptcy.

I would like to note that liquidation through bankruptcy is regulated by a separate Legislation, namely the Code of Ukraine on Bankruptcy Procedures.

Let's consider the liquidation of the Company by decision of the owners of the legal entity, or voluntary termination. The voluntary termination of the Company takes place in accordance with the Law of Ukraine “On Limited and Additional Liability Companies” No. 2275, the termination of the Company is carried out in the manner prescribed by the Law, by decision of the general meeting of participants, in compliance with the requirements specified by law. Consequently, at the general meeting, the founders decide on the liquidation of the Company, documented by the protocol.

The General Meeting of Participants convenes in the cases provided for by the Law or the Charter of the Company, as well as:

at the initiative of the executive body of the Company;
at the initiative of the Supervisory Board of the Company;
at the initiative of the member/s of the Company, who, as of the date of submission of the request, collectively own 10% or more percent of the authorized capital of the Company.

I draw your attention to the fact that for non-compliance with these procedural requirements, the legislation provides for liability and is very strict.

After the decision of the owners to liquidate the Company, a liquidation commission is created (a liquidator is appointed), which subsequently manages the liquidation procedure of the Company. I note that a person from the full-time employees of the Company, for example, a director, can be appointed as a liquidator.

The next step is to submit an application for state registration of the termination of a legal entity to the registrar, who makes the appropriate entries in the Unified State Register of Legal Entities and Individual Entrepreneurs on the commencement of the liquidation of the legal entity.

Next, the liquidator submits an application for verification and deregistration to the bodies of the State Tax Service. The liquidator (liquidation commission) must take independent active steps to provide the regulatory authorities with primary documents, accounting and tax registers. After verification, you will receive a certificate of no debt.

If the company did not carry out activities for 3 or more years, did not file reports, did not have debts in paying taxes and fees and did not have accounts or turnovers - such a Company can be liquidated without an audit by decision of the head of the tax service at the place of registration .

After successfully passing inspections by state bodies, the liquidator transfers employees' documents, long-term storage journals, etc. to the archival institution.

And here it is, the long-awaited finale. Submission to the state registrar of documents on liquidation of the Company.

So, we have analyzed one of the most popular and simple ways to liquidate a Company that has no debts to creditors, the state, employees, counterparties and litigation. Frankly speaking, this is not an easy and responsible process for any participant (shareholder) of the Company, which takes much more time, effort and finances than the registration (opening) of a new Company. And without a specialist with good experience in conducting liquidation procedures, it is almost impossible to understand the legislation and the procedure itself.

Fortunately, Prikhodko & Partners Law Company has such specialists with vast experience in liquidating Companies and not only by decision of the owners. Our team also includes arbitration managers who conduct liquidation procedures through bankruptcy in court. So, if you want to do everything with high quality and as soon as possible, please contact us as soon as possible and we will help you in passing this difficult path..