Information

Liquidation of companies (LLC, CJSC, OJSC etc.)

LIQUIDATION OF A COMPANY (LLC, CJSC etc.) IN ACCORDANCE WITH the russian legislation
(a legal entity is excluded from registers of the United State Register for Legal Entities, Tax Ministry Inspectorate, off-budget funds without succession)

Method 1. PARTIAL LIQUIDATION OF A COMPANY AS PER the RF Civil Code (including a legal entity into the liquidation register)

Procedure: the general meeting makes a decision on the company liquidation. A liquidator is appointed, becoming a management body for the legal entity. The legal entity liquidation announcement is published. Creditors, Tax Ministry Inspectorate, State Statistics Committee, off-budget funds are notified, accounts are closed.
Term: 14 days
Price: from 1,000 USD
Risks: legal entity founders remain in all the registers of public bodies; there is a possibility of nullifying the liquidator appointment.
Advantages: the cheapest method for the legal liquidation of a company. A liquidation board, responsible for the legal entity liquidation, undertakes the management of the legal entity. No need to surrender the current accounting documents. The United State Register for Legal Entities and all public agencies have a record that the legal entity is in the process of liquidation.
Application: it can be used if there is no focused attention on the part of tax bodies towards the company, and the maximum amount of principal debt (excluding fines and penalties) on tax payments and payments to off-budget funds does not exceed 500,000 rubles.
Data and documents required for us to start working:

Orders, decisions on appointing the chief executive officer and the chief accountant.
Original foundation documents (Charter, Foundation Agreement, Decision on Establishment)
Original registration documents (registration certificate, certificate of entry into the State Register for Legal Entities, certificates on the registration with the Tax Ministry Inspectorate and off-budget funds);
Statistics codes;
Copy of the balance sheet with the inspector mark for the last accounting period;
Stamp;
Passport data for founders - natural persons;
For founders - legal entities:
- State registration certificate (notarially attested copy);
- Charter (copy attested by notary or by the Tax Ministry Inspectorate);
- Certificate on the registration with tax bodies (notarially attested copy);
- Statistics codes (unattested copy);
- Chief executive officer’s (Director’s) full name;
- Bank details;
- Copy of the balance sheet with the inspector mark for the last accounting period.

Method 2. THOROUGH LIQUIDATION OF A COMPANY (LLC, CJSC etc.) as per the RF Civil Code

Procedure: The first stage is similar to Method 1. Then the transitional and liquidation balance sheets are prepared, the tax payments are revised. The legal entity is taken off the registers in funds, the Tax Ministry Inspectorate, State Statistics Committee, the accounts are closed. The documents of the legal entity are shelved in the archive. The United State Register for Legal Entities releases a certificate on the registration of the company liquidation.
Term: 6-18 months
Price: from 2,000 USD
Risks: there is a possibility of a mandatory on-site tax inspection.

Advantages: exclusion from all the registers of public agencies.

Recommendations: if a on-site tax inspection took place, having uncovered an amount of tax payable and imposed penalties, the procedure should be turned into the simplified bankruptcy procedure.

Method 3. LIQUIDATION OF A COMPANY (LLC, CJSC etc.) after conducting a simplified bankruptcy procedure

Procedure: The first stage is similar to Method 1. Then, in order to clear up the property of the legal entity undergoing liquidation, inquiries are forwarded to the Moscow Land Resources Department, State Road Traffic Safety Inspectorate, Moscow Committee for the State Registration of Real Estate Rights and Dealership, Tax Ministry Inspectorate, to the banks, so as to get statements of account balances, the tax payments are revised, and an intermediate liquidation balance sheet is submitted to the Tax Ministry Inspectorate.

Further, an application for bankruptcy of the legal entity is submitted to the Arbitration Court. The court declares the legal entity bankrupt and opens bankruptcy proceedings, approves the candidacy of a bankruptcy manager, who is meant to inventory, to recover accounts receivable, to orderly satisfy the claims of creditors, to close the accounts, to submit the legal entity’s documents to the archive.

Upon the report of the bankruptcy manager the arbitration court carries a resolution on the closure of bankruptcy proceedings. The legal entity is taken off the registers in the Tax Ministry Inspectorate, funds, State Statistics Committee, The United State Register for Legal Entities releases a certificate on the registration of the company liquidation.

Term: 6-12 months
Price: from 4,000 USD
Risks: there is a possibility of on-site tax inspection in case of indebtedness to budgets and off-budget funds in the balance and ready assets available.
Advantages: it is possible to avoid the mandatory on-site tax inspection, to appoint a proper person as bankruptcy manager. The method insures the exclusion from all the registers of public agencies.

Recommendations: one of the most efficient methods to dissolve a firm. It is used in case of the present indebtedness and the apprehension of uncovering more debts to budgets and funds, in case of assets deficiency, and the undesirability of undergoing a on-site tax inspection. Before the liquidation, all the assets need to be withdrawn.

Method 4. LIQUIDATION OF A COMPANY (LLC, CJSC etc.) AFTER BANKRUPTCY BASED ON THE CREDITOR APPLICATION

Procedure: in case of the legal entity indebtedness amounting to 100,000 rubles and more, and after the expiry of 3 month from the date of execution, a creditor is entitled to apply to the arbitration court for declaring the debtor bankrupt, on condition that the creditor had previously gained the suit at law, and after the resolution’s coming into legal force, a writ of execution was sent to the service of officers of justice, and a copy of it to the debtor, and more than 30 days of execution proceedings passed.

After the arbitration court considers the relevance of claims of the applicant, the court adjudicates the applicant’s claims as sufficient and institutes supervision procedure. As soon as 7 months expire after the application submission, the arbitration court, on the strength of the decision of the first meeting of creditors, adjudicates the debtor as a bankrupt and institutes bankruptcy proceedings.

The bankruptcy proceedings are similar to that of Method 3.

Term: 7-12 months
Price: from 4,000 USD
Risks: there is a possibility of on-site tax inspection in case of indebtedness to budgets and off-budget funds in the balance and ready assets available;
Advantages: it is possible to avoid the mandatory on-site tax inspection. The method insures the exclusion from all the registers of public agencies. There is no risk of having to undergo an expert examination meant to establish the bankruptcy fictitiousness.

Recommendations: it is used in case of any present indebtedness amounting to more than 500,000 rubles, and the apprehension of uncovering more debts to budgets and funds, in case of assets deficiency, and the undesirability of undergoing a on-site tax inspection. Before liquidation, it is necessary to withdraw all the assets.

Method 5. LIQUIDATION OF A COMPANY (LLC, CJSC etc.) AFTER BANKRUPTCY BASED ON THE DEBTOR’S APPLICATION

Procedure: in case of money obligations to budgets and off-budget funds and other creditors and the inability to fulfill them, the debtor should apply to the arbitration court for his bankruptcy. The arbitration court resolves to accept the application and to institute supervision. As soon as 7 months expire after the application submission, the arbitration court adjudicates the debtor as a bankrupt and institutes bankruptcy proceedings. The bankruptcy proceedings are conducted similarly to par.4.

Term: 6-12 months
Price: from 4,000 USD
Risks:

It is obligatory to undergo an expert examination meant to establish whether the bankruptcy is deliberate and fictitious. There is a possibility of on-site tax inspection in case of indebtedness to the financial bodies in the balance and ready assets available.
There is a possibility of entry of founders’ data into databases of credit rating agencies. That may complicate the further procurement of credits and get a low repute in the face of potential partners in the future.

Advantages: it is possible to avoid the mandatory on-site tax inspection. The method insures the exclusion from all the registers of public agencies.

Recommendations:

It should be used in case of gross debt to budgets and off-budgets funds and in case of refusal of institution of prosecution against the chief executive officer and the chief accountant, or if there is quite a trustworthy explanation for the debts.
Before liquidation, it is necessary to withdraw all the assets.