Liquidation of the company – bankruptcy procedure of the LLC

One of the ways to solve the problematic debt of a legal entity is its liquidation through the bankruptcy procedure.

Liquidation is carried out by the Commercial Court based on an insolvency petition submitted to the court by a legal entity that is a debtor or a creditor that has financial claims against the debtor. The application must be accompanied by evidence of insolvency, evidence of the advance payment of the arbitration administrator’s fee, confirmation of financial obligations and other documents specified by law.

What is the term of the company liquidation procedure?

The liquidation procedure lasts about 12 months and begins with the opening of proceedings in the case. After the opening of the proceedings, the court approves the candidacy of the arbitration administrator and introduces the procedure for the disposal of property for a period of up to 170 calendar days. At this stage, the assets and income of the legal entity are accounted for in order to find out further opportunities for it to fulfill its obligations to creditors. After analyzing the financial situation and considering the demands of creditors, the property administrator decides on the transition to the next stage – the procedure of rehabilitation or liquidation. Sanitation involves measures to restore the company’s solvency, while liquidation makes the company’s further activity impossible and terminates it.

How does the liquidation process of a legal entity proceed?

If it is impossible to restore the solvency of a legal entity, the court opens a liquidation procedure. From this moment, the company’s economic activity is completely stopped, information about it is excluded from the register of legal entities, property seizures are removed, and the accrual of interest and penalties on obligations is stopped. To manage the liquidation, a manager is appointed, who forms a liquidation mass from the debtor’s assets, makes a monetary assessment of them and later sells them at an auction in order to satisfy the demands of creditors in accordance with the established order. After settlement with all obligations, the proceedings are closed based on the liquidator’s report, and the company is declared bankrupt, losing its existence.

What costs will the company have to bear in the bankruptcy procedure?

In the liquidation procedure, the debtor is obliged to bear the costs of the arbitration manager’s remuneration, the amount of which is 3 times the minimum wage for each month of the exercise of powers. In order to open proceedings in the case, the debtor is required to add to the insolvency application proof of payment for the services of the arbitration administrator in the amount of 3 amounts of the minimum wage for 3 months of performance of the powers.

How can we help with the liquidation and bankruptcy of the enterprise?

If you are interested in assessing risks and receiving legal support during the liquidation procedure, the specialists of the Prikhodko&Partners law office will provide comprehensive consultation and legal support throughout the entire process of rehabilitation or liquidation of your company.

To calculate the price of assistance in the liquidation and registration of bankruptcy of a legal entity – leave a request in the form below and wait for a specialist to contact you!