Voluntary liquidation of a legal entity through the bankruptcy procedure

Voluntary liquidation of a legal entity due to bankruptcy is an opportunity for the owners of the company to terminate its activities in an organized manner, while observing all the rules.

Such liquidation takes place at the request of the owners themselves, but in a regulated judicial procedure, determined by the bankruptcy legislation.

Voluntary liquidation through bankruptcy thus allows owners to civilly wind up their company in a legal, court-supervised manner.

Advantages of voluntary liquidation through bankruptcy

1. Control by the court. The entire process of liquidation takes place under the supervision of the commercial court. This guarantees the transparency of the procedure and makes it impossible to abuse or violate the rights of creditors or company employees.
2. Clear terms and stages. Liquidation due to bankruptcy has a clearly defined algorithm of actions and deadlines for each stage – inventory, sale of property, settlements, etc.
3. The possibility of challenging claims. There is an opportunity to challenge the illegal or inflated demands of creditors in court.
4. Protection of the interests of employees. The labor rights and interests of the company’s employees are respected.
5. Transparent sale of property. The property is sold openly under the control of the property administrator and the court.
6. Completion of the process. After liquidation, the company is excluded from all registers, which makes further claims impossible.
7. Protection from creditors. The bankruptcy procedure allows you to stop the collection of debts and the demands of creditors. This gives the company time to organize financial affairs, inventory and evaluate property, sell assets to pay off existing debts.
8. Writing off outstanding debts. If in the process of liquidation it turns out that the value of all property is not enough to settle with all creditors, the remaining outstanding debts are subject to write-off. In this way, the company can get rid of the “ballast” of unpaid debts.
9. Withdrawal from tax records. After the full completion of the liquidation procedure due to bankruptcy, the legal entity is removed from the register with the tax authorities. This ends its existence as a business entity.

Stages of the procedure of voluntary liquidation due to bankruptcy

1. Making a decision on liquidation. Owners or founders of a legal entity at a general meeting make an official decision to liquidate the company and appoint a liquidation commission from among the participants.
2. Filing a bankruptcy petition. The liquidation commission prepares all the necessary documents and submits an application to the commercial court to initiate a bankruptcy case.
3. Opening proceedings. The court opens bankruptcy proceedings and initiates the procedure for disposal of the debtor’s property. An arbitration administrator is appointed.
4. Formation of liquidation mass. The arbitration administrator conducts an inventory and includes all the assets of the company in the liquidation mass.
5. Settlements with creditors. Settlements are made with creditors in the sequence determined by the Bankruptcy Law.
6. Completion of liquidation. After satisfying all the demands of creditors or recognizing them as hopeless, the court issues a decision on the completion of the liquidation procedure and the termination of the legal entity.

Contact the specialists!

The procedure for voluntary liquidation due to bankruptcy can raise many questions and require careful study of the specifics. That is why you should contact the leading law firm “Prykhodko and Partners” for professional support.

Our advantages:

1. Many years of work experience in the field of bankruptcy and liquidation of enterprises
2. A team of experienced lawyers
3. An individual approach to each client
4. Assistance at all stages of the bankruptcy procedure
5. Protection of the interests of the founders and owners of the company
6. Optimization of expenses and tax burden
7. Guarantee of high-quality and timely liquidation

Entrust liquidation to professionals!