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Liquidation of companies

Liquidation means stopping o fbusiness activity without transition of rights and dutiesto another person.  Information about liquidation is recorded inthe State Register oflegal entitiesand entrepreneurs, after that the companystopsexisting.

The process of liquidating a business can be carried out next ways:

  • liquidation by changing of company founders and leaders
  • liquidation by owners decision
  • liquidation by bankruptcy

 

1. “Express-liquidatio”

Changing of company founders and leaders is  the most easy way of business liquidation. It is realized by conclusion of a contractof saleof corporate rights with changing of director and accountant at the same time. In this case businessactivity continues, but all rights and obligations(andresponsibility!) are transferred toanother person.

This way o fbusiness liquidationis attractive because of its speed (3-5 workingdays), low cost and theabsence of government verifications.

 

2. Liquidationby decisio o founders (owners)

This liquidation way is possible when company has no debts to the budget and clients or when company has enough assets to pay off its debts. Liquidation of an enterprise by owners decisionis a sequence ofprocedures, including obligatorytestingoftax liabilities, pension andsocial insurance, followed by the removalcompanyfrom the register. This processcan take 6-8 months.

 

3. Bankruptcy

Bankruptcy of the enterpriseis the procedureof liquidationdue to the inabilityof the debtorto pay their debts.In accordance with the law, onlythe economic court candeclare a companyasabankrupt.

The bankruptcy processcan be initiatedboth by thedebtorand creditor. Liquidationof the enterprise throughbankruptcyis the most expensiveandmostprolonged(4-12months)way to endthe activities ofa business entity.

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