Taras Miroshnychenko

Head of practice

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miroshnychenko@prikhodko.com.ua

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Head of Corporate Law and Fintech Practice. Expert in the creation and reorganization of companies, support of M&A transactions, as well as legal support for opening and running a business in the EU, Asia, and North America.

Branch liquidation

Liquidation of a branch of an enterprise is an important legal process. As a result, the branch ceases its activities as a separate unit, while the main enterprise continues to operate. The branch, as a special entity of entrepreneurial activity, cannot act completely independently and conducts its activities on behalf of and on behalf of the main company. This also affects the procedure for its liquidation. More details on this are in the article below.

Branch of an enterprise: what are the features of liquidation?

Branch liquidation

Unlike the liquidation of an enterprise, in order to terminate a branch, it is necessary to obtain a decision not from its management body, but from the highest body of the parent company. If we talk about forced liquidation, then the basis for initiating this process will also be a court decision at the request of the relevant state authority (for example, the tax service). It is also worth emphasizing that the property that the branch received from the enterprise for its activities will be subject to immediate return to the original owner only after settlements with creditors, a full inventory and an independent assessment (in the case provided for by law). At the same time, if the branch’s property is insufficient to repay the debt, then the corresponding requirements may also be made to the main enterprise.

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What are the main stages of liquidating a branch of an enterprise in Ukraine?

The entire process, in accordance with current national legislation, is as follows:

first, the decision of the management body of the enterprise to close a separate unit;
second, the appointment of a person (commission) responsible for conducting the liquidation procedure;
third, the publication of an official notice of the closure of the branch (for creditors – in order to be able to present claims for debt collection);
fourth, resolving issues with the assets and employees of the branch (dismissal on the basis of staff reduction, payment of severance pay, preparation of a liquidation balance sheet based on the results of inspections and calculations, closing current accounts);
fifth, the submission of long-term storage documents (10 years or more) to an archival institution and obtaining a corresponding certificate; filing an application with the tax authority to remove the business entity from the register;
finally, the submission to the state registrar at the location of the branch by authorized persons of the main enterprise of an application for the termination of the separate unit and the introduction of appropriate changes to the Unified State Register (USR).

It will also be useful: Voluntary liquidation of a legal entity through the bankruptcy procedure

Documents for liquidation of a branch: what should you pay attention to?

The process requires careful preparation of documents both at the decision-making stage and at the stage of deregistration with state authorities. The main package of documents looks like this:

Extract of state registration of a legal entity (parent company);
Minutes of the general meeting of founders/decision of the sole participant of the enterprise;
Regulations on the branch (structural unit) of a legal entity;
Orders of the head of the unit (on closure, inventory, dismissal of employees, submission of documents to the state archive, etc.);
Application for changes to information about the company;
Application for liquidation of the branch as a taxpayer (for the tax service);
certificate from the archival institution on the acceptance and storage of documents, etc.

Legal support for the liquidation of a branch: how can we help?

Consulting

With the necessary experience and qualifications, our corporate lawyer provides comprehensive information and develops the optimal action plan for terminating the activities of the relevant business entity (company, enterprise, representative office, etc.). As part of the consultation, our lawyer:

makes a preliminary assessment of the situation;
develops a strategy for the rapid termination of the entity;
identifies potential legal risks;
informs about the main deadlines for the procedure.

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Documentary support

The corporate lawyer of our company “Prikhodko & Partners” prepares a package of necessary documents for each stage of the procedure, proofreads them for errors. During the support, the lawyer also conducts all communication with state authorities for the purpose of prompt interaction, relieving the client and accelerating the process.

Support for tax audits

Unscheduled documentary audit by the tax authority is one of the mandatory stages of the liquidation procedure. As part of this service, the corporate lawyer:

represents the interests of the company before state authorities;
systematizes documentation for verification;
provides answers to inspectors’ requests;
monitors the timely receipt of certificates (decisions) based on the results of audits.

Appealing unlawful actions of the state registrar (optional)

In the event of obstacles from the state registrar (in particular, a notary), a corporate lawyer can also additionally appeal actions (in particular, refusal to enter data on the termination of a branch into the unified state register), represent the company’s interests in court on issues related to forced liquidation or satisfaction of claims with counterparties.

Branch liquidation

Branch of an enterprise: what are the features of liquidation?

What are the main stages of liquidating a branch of an enterprise in Ukraine?

Documents for liquidation of a branch: what should you pay attention to?

Legal support for the liquidation of a branch: how can we help?

Consulting

Documentary support

Support for tax audits

Appealing unlawful actions of the state registrar (optional)

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Andrey Prikhodko