Debts, Contracts, Employees and Assets

The Civil Code provides for liquidation as one method of terminating a legal entity. After the resolution on termination, a commission or liquidator is appointed and a period for creditors to submit claims is established within the limits set by law.

Before completion, the company settles contractual obligations, wages, taxes and other liabilities. A separate inventory is prepared of assets, receivables, money in accounts and documents subject to retention.

Liquidation should be distinguished from a share sale and reorganisation. A share sale changes the owners, reorganisation involves legal succession, while liquidation ends the existence of the legal entity after completion of the actions required by law.

The period for creditors to submit claims to a legal entity being terminated is set between two and six months from the date on which notice of the termination resolution is published. This period is used to deal with claims, contracts and amounts that must be resolved before liquidation is completed.

Resolution, Creditors and Liquidation Balance Sheet

The corporate resolution determines termination of the company, the composition of the commission or the liquidator and other information required for the entry in the Unified State Register. From appointment, the commission or liquidator exercises the relevant powers over the legal entity's affairs within the law.

Creditors' claims are considered within the established period, after which the required settlements are made. The liquidation balance sheet reflects the assets and liabilities before termination is completed.

Assets remaining after creditors' claims have been satisfied are distributed in accordance with the law and corporate documents. For the owners, it is important that this result corresponds with the accounting records, bank statements and title documents for the assets.

The liquidation package should bring together contracts, acceptance documents, primary accounting records, information about debtors and creditors, and title documents for assets. When these data are consistent, the liquidator can see the sources of receipts and the list of final payments, while the owners understand the assets that may remain after settlements.

Accounts, Documents and the Termination Entry

Bank accounts are used for final receipts and payments until the company no longer needs them directly. Before closing the accounts, it is advisable to obtain statements and retain documents confirming final settlements.

A legal entity is considered terminated from the date on which the termination entry is made in the Unified State Register. This entry ends the company's legal status as a separate person.

The result for the owners is completed settlements, properly documented assets, a package of records for retention and state registration of termination.

After the final registration action, the owners need documents explaining the settlements made and the treatment of the company's assets. Bank statements, the liquidation balance sheet, corporate resolutions and accounting records form a final package that can be referred to in later asset transactions or responses to enquiries concerning previous periods.

Employment documents and settlements with employees are completed before the company ends its activities in accordance with current rules. The accounting team simultaneously closes mutual settlements and prepares data for the final reporting periods. When HR, contractual and financial documents are brought together, the liquidator can complete the registration process on the basis of the company's actual position.