Liquidation of a legal entity (company) is a rather complex procedure that requires development of a clear, step-by-step plan for termination of the company’s activities. This action helps to calculate occurrence of all possible risks and solve many problems even at the stage of such planning.
Many company owners do not have information about what exactly the company’s liquidation procedure consists of.
Liquidation of the company is implementation of measures to stop economic activity of an enterprise, bring its fixed assets to a state that guarantees safety for people, property and environment, and measures to protect social security of the released employees. After that, the company ceases to exist.
Procedure for state registration of the liquidation of legal entities is regulated by the Civil Code of Ukraine, the Economic Code of Ukraine and the Law of Ukraine № 755 as of 15.05.2003 "On the state registration of legal entities, individuals-entrepreneurs and public organizations". Deregistration procedure of taxpayers in controlling bodies is defined by the Tax Code of Ukraine, Section XI of the Procedure for accounting of taxpayers and levies, approved by Order of the Ministry of Finance № 1588 as of 09.12.2011.
If the company’s liquidation procedure is very succinctly described, it looks like this: company makes a decision on liquidation, informs all authorities and its creditors about it, dismisses employees and stops production, sells its property, transfers all remaining funds to its owners, closes current accounts, cancels all certificates, licenses, permits, undergoes audit by the tax authorities, transfers relevant documents for storage in archive and is finally liquidated after making a corresponding entry in the Unified state register of legal entities, individuals-entrepreneurs and public organizations.
Conventionally, the company’s liquidation process can be divided into the following stages:
decision-making by the company’s owners (participants) on its voluntary liquidation and recording such decision in minutes of the general meeting of participants;
notification to the state registration body (state registrar) about the start of company’s liquidation procedure;
notification of controlling bodies about the start of company’s liquidation procedure;
identification of debtors, creditors and notification of the start of company’s liquidation procedure;
sale of all company’s assets, satisfaction of creditors’ demands, settlement with the company’s owners (participants) according to the size of their corporate rights, preparation of the company’s liquidation balance;
closing company bank accounts, obtaining bank statements, cancellation of certificates, permits, accreditation at customs, exclusion from registers, etc.;
conduction of audit by the controlling body of the State Tax Service or manager’s decision-making about the impracticality of conducting audits;
receiving a certificate from the tax authority on the absence of arrears in payment of taxes and levies;
transfer of documents subject to the long-term storage to relevant archival institution;
entering information on the liquidation of legal entity into the Unified state register of legal entities, individuals-entrepreneurs and public organizations.
State Tax Service of Ukraine draws attention of business entities that implementation of the above specified measures will significantly speed up the liquidation procedure according to the norms of current legislation.