Stages of voluntary liquidation of a company in Russia

Definition of the term “liquidation” is contained in the Civil Code of the Russian Federation. In accordance with the Civil Code of the Russian Federation, liquidation of a legal entity shall result in its termination without transfer of rights and obligations by ways of succession to the other persons excluding cases provided by the Federal Law (clause 1, Article 61 of the Civil Code of the Russian Federation).

A legal entity may be liquidated either voluntary (under the decision of its members) so compulsorily (under the court decisions) or in the event of its adjudication in insolvency (bankruptcy). According to the foundations for liquidation of a legal entity, the liquidation proceeding shall have its own specific aspects. In this material we shall give consideration in brief to the stages of voluntary liquidation of a legal entity.

1. Taking a decision on liquidation of a legal entity

The Body, authorized under the constituent documents of a legal entity, shall take the Decision on liquidation, appointment of liquidation commission, imposing terms and procedure for liquidations.

 

All powers and authorities on management of a legal entity shall be transferred to the liquidation commission from the moment of its appointment. Members and employees of a liquidated legal entity are usually appointed to the composition of the liquidation commission. The head of a legal entity is usually appointed to the position of the Chairman of liquidation commission.

2. Notification of authorized authorities on liquidation


The important stage of liquidation process is notification of controlling authorities. It is necessary to provide this notification within the limits established by the legislation of Russia.

Thus it is necessary to notify within 3 (Three) working days following the date of taking of decision on liquidation:

- tax authorities at the place of location of a liquidated legal entity on liquidation of a legal entity, formation of a liquidation commission as well as on preparation of an interim liquidation balance sheet (Article 20, Chapter XII of the Federal Law “Concerning State Registration of Legal Entities and Individual Entrepreneurs”, No. 129-ФЗ dd. 08.08.2001). Notification shall be executed according to the approved form No. P15001. In accordance with this Notification the tax authority shall make to the Uniform State Register of Legal Entities a record that legal entity is in the process of liquidation.

Thus it is necessary to notify within 3 (Three) working days following the date of taking of decision on liquidation:

- territorial authority controlling payment of insurance premiums at the place of location of a legal entity (clause 3, Article 28 of the Federal Law “Concerning Insurance Payments to the Pension Fund of the Russian Federation, Social Insurance Fund of the Russian Federation, Federal Compulsory Medical Insurance Fund and territorial funds of compulsory medical insurance”, No. 212-ФЗ dd. 24.07.2009)

3. Notification of creditors on liquidation


Liquidation commission shall within three working days following the date of taking of decision on liquidation, place in the journal “Bulleting of State Registration” the publication on liquidation of a legal entity, on procedure and terms for assertion of claims by its creditors. The term for assertion of claims by the creditors shall not be less than 2 (Two) months from the moment of placing of publication on liquidation. The composition of information subject to publication in the journal “Bulleting of State Registration” is approved in the Annex No. 2 to the Order of the Federal Tax Service of the Russian Federation dd. June 16, 2006 under No. САЭ-3-09/355@.

Therewith the liquidation commission shall take measures for identification of creditors and collection of accounts receivables as well as shall notify in written the creditors on liquidation of a legal entity.

4. Notification of employees/Employment service bodies on liquidation

Employees shall be notified personally and with signed acknowledgement by the employer on forthcoming dismissal with regard to liquidation not les that for 2 (Two) months before dismissal (Article 180 of the Labour Code of the Russian Federation.

Employment service bodies shall be notified on liquidation of the organization and possible termination of employment agreement with the employees within the following terms:

- not later that for 2 (Two) month before the termination of employment agreements with the employees.

- in case of mass discharge of employees not latter than for 3 (Three) months before commencement of termination of employment agreements with the employees.

Notification of Employment service bodies shall be accomplished in written. Notification shall specify the position, profession, specialty and qualification requirements thereto, terms of remuneration of each specific employee (clause 2, Article 25 of the Law dd. 19.04.1991, No. 1032-1 “Concerning employment of population”).


5. Preparation of interim liquidation balance sheet

Interim liquidation balance sheet shall be prepared after the expiration of time-limit for specifying the requirements by the creditors. Interim liquidation balance shall be prepared by the liquidation commission. This balance in accordance with the Civil Code of the Russian Federation shall contain information on composition of property of liquidating legal entity and list of requirements specified by the creditors, as well results of their examination.

Interim liquidation balance shall be approved by the founders (members) of the legal entity or by the body that made the decision on liquidation of legal entity. To the extent permitted by the law, Interim liquidation balance shall be approved in coordination with authorized government authority (clause 2, Article 63 of the Civil Code of the Russian Federation).

6. Provision of information concerning employees to the non-budgetary funds


Within one months from the date of approval of Interim liquidation balance but no latter that the day of filing of application to the Tax Inspection on registration of liquidation it shall be necessary to provide (clause 2, Article 9 of the Law dd. 01.04.1996, No. 27-ФЗ; clause 15, Article 15 of the Law dd. 24.07.2009, No. 212-ФЗ):

- individual information concerning all dismissed insured persons to the territorial department of the Pensions Fund of Russia;

- calculations to the Pensions Fund of Russia;

7. Satisfaction of requirements of the creditors


After the expiration of time-limit for specifying the requirements by the creditors there shall be implemented satisfaction of their requirements. Legal priority of satisfaction of requirements of creditors is established by clause 1, Article 64 of the Civil Code of the Russian Federation:

- first of all there shall be satisfied requirements of citizens for damage to the life or health as well as requirements for compensation for moral injury, compensation above the indemnification for harm caused as the result of destruction or damage of capital construction object, violation of safety requirements to be followed during the construction of capital construction object and requirements for safety operation of building and construction;

- on a second-priority basis there shall be implemented settlements on payment of retirement benefits and remuneration for labour of persons being employed or have been employed under the employment agreement and on payment of remuneration to the authors of the result of intellectual activity;

- on a tertiary basis there shall be implemented settlements under the compulsory payments to the budges and to non-budgetary funds;

 - on a fourth-priority basis there shall be implemented settlements with other creditors.

According to the general principles, indebtedness under the each following category shall be settled after full settlement of indebtedness under the previous category.


7. Preparation of Liquidation balance

Liquidation balance sheet shall be prepared after completion of settlements with creditors. Liquidation balance shall be prepared by the liquidation commission and shall be approved by the founders (members) of a legal entity or by the body that made the decision on liquidation of legal entity. To the extent permitted by the law, Liquidation balance shall be approved in coordination with authorized government authority (clause 5, Article 63 of the Civil Code of the Russian Federation).


8. Closing of bank accounts

Closing of bank accounts shall be implemented after all necessary settlements with controlling authorities, creditors and members, etc. It shall be necessary to notify the Tax Inspectorate, Social Insurance Fund and Pension Fund of the Russian Federation about closing of bank accounts. Notification shall be provided to the authorized authority within 7 days from the day of closing of bank accounts.


9. State registration of liquidation of a legal entity

State registration of liquidation of a legal entity shall be executed by the Tax Authority. Procedure of state registration of liquidation of a legal entity as well as detailed list of documents subject to presentation to the Tax Authority with regard to liquidation is established by Chapter VII of the Law No. 129-ФЗ dd. 08.08.2001 “Concerning State Registration of Legal Entities and Individual Entrepreneurs”.

Liquidation of a legal entity shall be considered to be competed and the legal entity shall be deemed as liquidated only after making the entry thereof to the Uniform State Register of Legal Entities (clause 8, Article 63, Civil Code of the Russian Federation).

Non-budgetary funds and statistical authorities shall be independently notified by the Tax Authority on the liquidation of a legal entity.

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Inventory of property shall be implemented in relation to liquidation of a legal entity. Therewith unscheduled inspection on the part of Tax Inspectorate and non-budgetary funds may with regard to the organization. Inspection shall be conducted in accordance with the procedure established by the legislation of Russia.

 

© Information is prepared by Gavrilova S.V., legal advisor of the Company “RosCo”

 March 17, 2014

Date of foundation
company «ROSCO»
2004
Membership in professional organizations:
SRO NP «Audit Chamber of Russia»
(Certificate No 1809 dated 28.12.2009)
Chamber of Tax
Consultants
(Certificate No 78)
NP «Partnership of RSE»
(Russian Society of Evaluators)
Membership in public association:
Moscow Chamber
of Commerce and Industry
(Certificate No 123-973 dated 21.12.2009)
Non-Profit
Partnership of Turkish Entrepreneurs (RTIB)
Ratings:
A++1+++1++[%]
(as per the results of 2009 -
А++1+++1+[%])
Company
is included in the register of reliable enterprises of Moscow
Certificates of conformity:
Certificate of conformity to the requirements of GOST R ISO 9001-2008 (ISO 9001:2008)
Professional
liability
is insured