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.

Liquidation of a utility company

The termination of a utility company through liquidation takes place with the participation of a local government body. Since a utility company provides important services to the population (in particular, in the field of heat and water supply), during its liquidation, an inventory and assessment of all property that was assigned to it is carried out. Because of this, the process itself takes much more time than the liquidation of a private legal entity. This article will tell you about this and the main steps that need to be taken.

In what ways can a utility company be liquidated?

Liquidation of an enterprise can be initiated through various mechanisms: voluntarily, forcibly. In the first case, the decision is made by a local government body (local, village or settlement council). Most often, among the reasons for liquidation, one can single out the unprofitability of a legal entity or the need for its reorganization. Forced liquidation is allowed only in the case provided for by national legislation, and in cases of bankruptcy of a municipal enterprise or violation of laws in the course of its activities.

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Liquidation of a utility company by decision of the owner: what is the procedure?

Liquidation is a multi-stage procedure that requires strict compliance with legal requirements. Below are the main steps that must be taken to complete it:

first, making a decision on liquidation. This stage is initiated by the relevant local government body and involves drawing up a decision that appoints a liquidation commission, sets a deadline for creditors (except for the city, village or settlement council itself) to file claims, and officially publishes a notice of liquidation;
second, working with creditors. At this stage, the assets and liabilities of the utility company are managed, property inventory is conducted, receivables are collected, inspections are carried out by state authorities (tax, pension, etc.), an interim liquidation balance sheet is drawn up, etc.;
third, deregistration and final registration of information. This stage involves closing all bank accounts, drawing up a final liquidation balance sheet, transferring documents to the archive, drawing up write-off acts (seals, stamps) and submitting a full package of documents to the state registrar.

It will also be useful: What is the procedure for applying the bankruptcy procedure for legal entities (businesses)?

What documents must be submitted to the archive for storage in the event of liquidation of a utility company?

When liquidating an enterprise, transferring documents to an archival institution is mandatory. In accordance with current national legislation, the following will be subject to transfer:

constituent documents (statutes) and decisions (protocols) of the governing bodies;
current extracts from the state register;
personnel documentation (orders on the appointment, transfer, dismissal of employees, employment contracts, staffing lists, etc.);
financial and settlement documentation (in particular, settlement sheets for the payment of wages, advances, etc.);
other organizational and administrative documents (for example, regulations on structural units).

The liquidation commission shall notify the archival institution in writing of the termination of the utility company’s activities and shall provide only certified copies of the decision on liquidation, the appointment of the commission, and the description of documents issued by the state registrar at the beginning of the procedure. For more detailed information, we recommend that you request a consultation with one of our lawyers.

Final liquidation report of a utility company: what should you pay attention to?

The completion of this procedure requires the submission of final reporting to the tax office. The last tax period for the report will be considered by law to be the period from the beginning of the year to the date of entry of the record of termination of activity in the state register. The liquidation balance sheet as part of the financial statements is necessarily included in the tax return. But before submitting it, you must obtain full confirmation of the absence of tax debt (according to the results of a scheduled inspection). It is also worth filling out special certificates No. 11-ЭСВ, No. 20-ОП and No. 30-ОП, without which a legal entity (in our case, a utility company) is not considered removed from tax accounting.

How long does it take to liquidate a utility company?

The duration of the process is determined by a number of procedures that have their own minimum terms. First, the term for creditors to present their claims must be at least two months from the date of official notification of the liquidation of the utility company. Secondly, the fiscal authorities conduct a full documentary audit, which can take from several months to six months or more. Finally, the final inventory and collection of documents for the archive can also take several months. Taking all this into account, the total time for the liquidation of a utility company will be an average of six months.

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Legal support for the liquidation of a utility company: what do we offer?

The law firm “Prikhodko & Partners”, taking into account the experience and qualifications of corporate lawyers, offers interested clients to receive support for the entire liquidation process. Such a service will not only speed up the liquidation, but also help to avoid unwanted problems with the commission, tax and other authorities. The main services of a lawyer within the framework of such support will include: