Liquidation of a limited liability company is a complex process that requires precise compliance with many legal steps. The purpose of these proceedings is to terminate the company’s operations, consisting in the collection of receivables, fulfillment of obligations and liquidation of the company’s assets. In this article, I will discuss step by step how the liquidation of a limited liability company is carried out, indicating the key stages and obligations that lie with liquidators and shareholders.
Dissolution of the company
Liquidation of a limited liability company is a process that begins with the emergence of prerequisites resulting in its dissolution. The dissolution of the company is caused, among others, by the decision of the shareholders expressed in a resolution recorded by a notary, the occurrence of reasons specified in the articles of association, or the declaration of bankruptcy. From the date of dissolution of the company, the liquidation process continues, the company’s management board is replaced by liquidators, whose task is to terminate the company’s operations and settle accounts with creditors and shareholders.
Notification of liquidation to the court and other institutions
One of the first obligations of liquidators is to report the opening of liquidation to the registry court keeping the company’s registration files. The application to the court should take into account such changes as: adding the term „in liquidation” to the name of the company, deleting members of the management board and proxies, as well as entering liquidators along with specifying the manner of representation of the company.
Liquidators of the company
The liquidators of a limited liability company are usually the current members of its management board, but the shareholders may also appoint other persons to these functions. The competences of liquidators are similar to those they previously had as members of the management board – liquidators deal with the company’s affairs and its representation, although now their main task is to carry out the process of closing the business.
Announcement of the opening of the liquidation in the Court Gazette
In addition to filing a complaint with the court, the opening of the liquidation must be announced in the Court Gazette. This is important because the announcement calls on the company’s creditors to submit their claims within three months of the date of publication. This period cannot be shortened, and its observance is necessary to be able to settle accounts with the shareholders.
Decommissioning activities
After fulfilling formal obligations, liquidators can proceed to the actual liquidation activities. They consist in the termination of the company’s current business, collection of receivables, repayment of liabilities and liquidation of the company’s assets. The purpose of these activities is to terminate the business as efficiently as possible, and the liquidators’ competences include only activities related to the closure of the company’s affairs.
Liquidation Closure
After the liquidation activities are completed, a liquidation report is prepared, which must be approved by a resolution of the Shareholders’ Meeting. The approval of this report means the formal completion of the liquidation process. At this point, the shareholders also appoint a person responsible for storing the company’s documents. If it is not indicated, the depositor will be appointed by the court.
Deletion of a company from the National Court Register
The last step in the process of liquidation of a limited liability company is to file an application to the registry court to delete the company from the National Court Register. Upon deletion, the company ceases to exist as a legal entity, which means the final termination of its existence.
Author: Franciszek Horała / attorney – at- law
09.26.2024
