Liquidation Practice

Collegia Law Firm has been providing legal services related to liquidation of legal entities in the entire territory of the Republic of Belarus since 2000. Based on our many years' experience we can say confidently that liquidation of each legal entity is a complicated and one-of-a-kind procedure, but our main task within the services we provide to the client is to minimize the risks of beneficiaries and managers of a business in liquidation.

Questions of concern to the beneficiaries of any business in liquidation:

Our short answers to frequently asked questions:

1) What are the time limits for liquidation of a legal entity?

Time limits for liquidation cannot be less than 2 months from the date of publication about liquidation of a company made in the Internet on the official website of the legal journal of research and practice "Justice of Belarus", but the deadline of liquidation cannot exceed nine months from the date of decision on liquidation (cessation of business). This period may be extended, but not more than for twelve months.

2) Is it possible to avoid tax audit upon liquidation of a legal entity?

Under the procedure of involuntary (simplified) liquidation of legal entities, audit is not carried out.

Liquidation by decision of the registering authority is the so-called simplified, but nonetheless involuntary liquidation. It can occur in the following cases:

  • a commercial organization has not been conducting business during 24 consecutive months;
  • the tax authority made a submission of liquidation due to acknowledgement of a legal entity's debt as a bad debt and its writing off.

In that event the tax authority tends to make a submission of liquidation and sends it to the registration authority, and the registration authority does not take into account whether such a liquidated entity has accounts payable not to state bodies, but to other parties to economic legal relations.

During such involuntary (simplified) liquidation the liquidation balance sheet is not drawn up, the liquidator is not appointed. To complete such liquidation procedure, only two things are important:

  • a legal entity has no debt owed to the Inspectorate of the Ministry of Taxes and Levies, Social Security Fund, Belarusian Republican Unitary Insurance Company "Belgosstrakh", customs authorities;
  • all necessary documents, including staff documents, are handed over to records.

3) Is it possible to avoid a typical longstanding procedure of liquidation?

It is possible to conduct an audit during voluntary liquidation of a legal entity, avoiding inspections of the tax, customs authorities and Belarusian Republican Unitary Insurance Company “Belgosstrakh”. This should be done before applying for liquidation of a legal entity to the registering authority. In the application for liquidation it will be necessary to indicate the information on the concluded agreement for independent auditing of legal entities’ activities before their liquidation.

The benefit of applying by a liquidated business entity to auditors is that the liquidation process is speeded up: the audit report must be submitted to the registering authority within 20 business days from the date of filing an application for liquidation.

4) Does a member of a legal entity in liquidation have a right to become a founder of companies that are being set up or a member of existing companies?

Until the end of liquidation of a legal entity its owner (member) cannot become a founder (member) of other organizations.

 

5) Is it possible to stop liquidation of a legal entity in order to resume its business activities?  

A legal entity in liquidation may resume its business activity until a decision is made by the registering authority to exclude it from the Unified State Register of Legal Entities and Individual Entrepreneurs.

In this case, a legal entity must submit to the registering authority the application and the resolution of the owner of property of a unitary enterprise, or the minutes of the founders (members) of a legal entity of other organizational legal form, on revocation of a decision on liquidation.

6) Is it necessary to continue accounting of a legal entity in liquidation?

 

 

Yes. After a decision on liquidation is made a business entity is obliged to continue its accounting in accordance with the law, to prepare and submit reports to the authorized bodies of the country within the prescribed time limits. Responsibility for breach of this obligation, for example: for failure to submit a report to the Belarusian Republican Unitary Insurance Company “Belosstrakh” - a fine of 10 base values, to the Social Security Fund - from 4 to 20 base values, to the Ministry of Taxes and Levies - from 1 to 10 base values.

 BRIEF ALGORITHM FOR LIQUIDATION OF A LEGAL ENTITY: 

  1. Making decision on liquidation by the property owner or authorized body of a legal entity (or by the registering body, or by the court)
  2. Appointing a liquidator (liquidation commission and its chairman), preparation of the necessary package of documents
  3. Submitting the necessary package of documents and notifying the registering authority of the decision made to liquidate a legal entity
  4. Publishing information on liquidation of a legal entity in the respective print media
  5. If an entity in liquidation has any creditors, an inventory will be advisable before preparing the interim liquidation balance sheet
  6. Notifying creditors of liquidation of a legal entity
  7. Dismissal and full settlements with employees of a legal entity in liquidation
  8. Conducting inspections by the authorized state bodies in relation to a legal entity in liquidation
  9. An inventory of property and financial obligations of a legal entity in liquidation
  10. Preparation and approval of the interim liquidation balance sheet of a legal entity in liquidation
  11. Settlements with creditors of a legal entity in liquidation
  12. Inventory, preparation and approval of the final liquidation balance sheet of a legal entity in liquidation
  13. Settlements with members of a legal entity in liquidation
  14. Closing current bank accounts of a legal entity in liquidation
  15. Preparing and submitting a set of documents of a legal entity in liquidation to the archive
  16. Preparing and submitting a set of documents of a legal entity in liquidation to the registering authority
  17. Striking a legal entity off the Unified State Register of Legal Entities and Individual Entrepreneurs

We are ready to answer all your questions regarding liquidation of your company and cost of our services by scheduling a confidential and free first consultation at our office.

OUR PRACTICAL EXPERIENCE IN PROVIDING LEGAL SERVICES FOR LIQUIDATION OF BUSINESS ENTITIES SPANS MORE THAN 20 YEARS!