What is the liquidation of a company? - GovtVacancy.Net

What is the liquidation of a company? - GovtVacancy.Net
Posted on 22-10-2022

What is the liquidation of a company?

The liquidation of a company is the termination of the activities of the organization by making the termination of rights and obligations (or their transfer to another person).

Such a decision can be made by the founders of the company. This decision is approved by Minutes of the general assembly of the founders, or by the Decision of the sole participant.

Why can a decision be made to liquidate a company?

The reasons may be different:

  • Management and owners refuse to further implement business plans due to some circumstances
  • There is no possibility of paying the debts arising
  • There is a desire to start a business from scratch

Liquidation of a company

The liquidation of a company is a complex and responsible process, the procedure for its implementation is determined by the law and adjusted by practice.

In practice, the requirements of the tax authorities may differ and be more stringent than those specified in the law, and the procedure may have its own subtleties, which are determined only by the requirements of specific inspections.

voluntary liquidation

In the case of voluntary liquidation, the activity of the legal person is terminated, the rights and obligations are not transferred to anyone, and the debts are considered settled.

If the sale goes to a foreign company, then the foreign company will be responsible for the subsequent activities, and if it does not file reports, the company will be liquidated by the tax office itself.

To determine the best way to wind up a company, accounts attorneys carefully study company documents and recommend the method that is most convenient for the client.

If the company is large, owns assets, has a developed infrastructure, then the process should be approached with extreme caution and carried out in stages so as not to disrupt the owner's business processes and help him put the business on a new track.

For small businesses with no debt, the quickest way is to liquidate by changing the founders and director. Its duration is 20 days. These changes are recorded in the IFTS. From the moment of such liquidation of the company, the former head will not be responsible for the activities of the company after the liquidation.

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