There are situations when the company is forced to cease its activities. There are many reasons for this. What is the procedure for termination of business and what the company should do to close – in the following.
Step 1
The procedure for the liquidation of a company consists of several basic stages. The first is the decision to liquidate. The state registration authority (state registrar, notary) should then be informed about the start of the liquidation procedure. Here it is necessary to take into account the responsibility for not submitting documents to the state registrar in the term established by law, mandatory submission of which is established by law for termination of a legal entity, or submission of inaccurate information in such documents. According to Art. 166 of the Code of Ukraine on Administrative Offenses (hereinafter – CUoAO) provides for liability in the form of imposing a fine on the head of a commission to terminate a legal entity, liquidation commission, liquidator or officials from 60 to 80 of non-taxable minimum incomes of citizens.
Step 2
The next step is the appointment of the liquidation commission, the submission of an announcement of liquidation. Moreover, an announcement on the reorganization or liquidation of a business organization or the termination of the activity of an individual entrepreneur should be published by the registration authority in a special supplement to the Uriadovyi Kurier newspaper and/or an official printed publication of a public authority or a local self-government body at the location of the business entity within 10 days from the day the business entity ceases to operate.
It should be noted that the announcement of the termination of a legal entity is carried out in order to inform creditors about the timing of their claims in the case of unclosed accounts in the liquidated company. All measures are to be taken to collect the receivables of a legal entity that is being liquidated, which is stated in writing by each of the debtors in due time.
Until the expiration of the deadline for the presentation of claims by creditors, the liquidation commission (liquidator) closes accounts opened in financial institutions, except for the account used for settlements with creditors during the liquidation of a legal entity.
Step 3
The next step on the way to termination is the inventory and evaluation of the existing property of the company. Inventory is made for all the available assets of the person that is terminated, including the property of the branches and representative offices, subsidiaries, economic partnerships, and property, which confirms its corporate rights in other legal entities, measures are taken for the return of property held by third parties. Inventory in case of liquidation of the company is obligatory.
In cases established by law, the liquidation commission (liquidator) ensures independent valuation of the property of the terminated legal entity.
In order to value the property, the commission may use the services of a valuator that will carry out an independent valuation in accordance with the requirements of the Law “On valuation of property, property rights and professional valuation activity in Ukraine” of 16.01.2016, No. 2658 (hereinafter – Law No. 2658).
In this case, in case of bankruptcy, liquidation of the state, communal company and enterprises (economic partnerships) with the state share of the property (the share of communal property), valuation of property is mandatory (Art. 7 of the Law No. 2658).
Step 4
The next step is the submission of liquidation reports to the controlling authorities, which is formed by the liquidation commission (liquidator) after the completion of settlements with creditors, provided by its approval by the legal entity, court or authority that adopted the decision to terminate the legal entity. It should be noted that the law provides for administrative liability for incomplete or in violation of the established procedure for inventory of property, violations of the procedure for valuation of property, drawing up a liquidation balance (interim balance sheet), distributive balance, transferable act in the termination of a legal entity. According to Art. 1666 CUoAO liability is provided in the form of imposing a fine in the amount of 150 of non-taxable minimum incomes on officials of a legal entity and other persons involved in the termination of a legal entity.
Step 5
According to the law, the deadline for the liquidation of a company must be not less than two months from the date of the decision (Part 5 of Art. 105 of the Civil Code of Ukraine). But these actions are acceptable in all situations, except when the liquidation is appointed by the court in connection with the bankruptcy of a legal entity.
The next step in this procedure is the audit by the supervisory authorities.
