Liquidation of a company with debts

The liquidation procedure of a legal entity can be complicated by the presence of debts and the inability to timely pay off existing debts to counterparties or the state. The legislation regulates various ways of terminating the activity of an enterprise. Let's consider them in more detail.

Liquidation of a company with debts: what legislation should be followed?

To liquidate a legal entity in Ukraine, you must familiarize yourself with the following regulations:

• HC;
• GK;
• COD;
• NK;
• The Law “On registration of legal entities, individual entrepreneurs and public organizations;
• The Code of Ukraine on Bankruptcy Procedures.

In addition to the above-mentioned standards, there are a number of specialized acts that regulate certain nuances, depending on the organizational form and the specifics of the enterprise. Therefore, often, in order to understand this issue as quickly as possible, the help of qualified lawyers is required.

How to close an LLC with debts: ways to solve the problem

According to the provisions of the Law "On Limited and Additional Liability Companies", an LLC can be closed in the following ways:

• reorganize, transferring its property, rights and obligations to the legal successor;
• liquidate the company on a voluntary or compulsory basis.

The peculiarity of the termination of the enterprise with debts is that it cannot be simply liquidated by the decision of the general meeting. In this case, you have to use alternative methods.

What are the stages of closing a legal entity with debts?

The entire liquidation procedure can be divided into several stages.

1. Preparatory. First, you need to collect all the data on the current financial and economic condition of the organization. Particular attention should be focused on accounts receivable and payable, the mechanism for suspending the production cycle, the number of employees and settlement with them. After that, a general meeting is required.
2. Decision making by the general meeting. At the general meeting, it is necessary to discuss the issue of liquidation, as a result of which the adopted decision is formalized in the minutes. It prescribes an algorithm for liquidation, including the procedure for settling accounts with creditors, the terms during which they can declare their claims (from 2 to 6 months).
3. Submission of the protocol to the state registrar. In the absence of circumstances that may prevent liquidation, the registrar shall enter the relevant data into the register.
4. Publication of notice of liquidation. After the official notification through the publication of this notification in the media, creditors have the right to file their claims against the debtor. The term for consideration of each claim should not exceed 30 days.
5. Inspection by supervised authorities. Most of the time is usually taken by a tax audit for the correctness of the calculation and payment of taxes and other mandatory payments.
6. Closing current accounts. Only the liquidation account remains, which is determined by the liquidator.
7. Realization of property, settlements with creditors. For this, an inventory is made, and the repayment of creditors' claims occurs in strict order.
8. Approval of a zero balance, closing the liquidation account.
9. Transfer of documents to the archive department and obtaining a certificate, which, together with the corresponding application, must be submitted to the registrar.
10. Entry of statements into the Unified Register.

This procedure is suitable only if the assets of the enterprise were sufficient to pay off creditors and go to zero balance.

Is it possible to liquidate an LLC with debts through bankruptcy?

But if it was not possible to pay off all the debt, you will have to initiate bankruptcy proceedings. To this end, the company applies to the court with a petition to initiate a bankruptcy case.

The court, when opening proceedings, also appoints a liquidator in this case. It is he who further manages the entire procedure, including taking all the necessary measures to pay off the debts of the enterprise as much as possible.

So, in the course of declaring a company bankrupt, the following main stages are distinguished:

• disposal of property;
• reorganization;
• liquidation of bankruptcy.

Forced liquidation of an enterprise with debts: when is it carried out?

Provisions on how to close a business with debt can be found in the Bankruptcy Code. It should also be borne in mind that a company is considered a debtor not only when it has delayed the fulfillment of its obligations to counterparties, but also to the state.

So, in this case, we are talking about the payment of taxes, insurance premiums for compulsory pension insurance, as well as for other types of insurance. In this case, the amount of obligations does not include forfeit and other penalties.

It is important to understand that an involuntary liquidation procedure is significantly different from a voluntary liquidation procedure. Here you must strictly adhere to all stages.

How is thegoing liquidation of an LLC with debtsthrough the court

If the pre-trial measures to restore the debtor's solvency did not bring a positive result, and it was not possible to pay off all the debts, you will have to go to court.

Moreover, both the debtor himself and his creditor have the right to apply with such a statement. The application should be accompanied by documentation that confirms the existence of a threat of insolvency of the legal entity. These can be:

• balance sheet;
• a list of creditors and the amount owed to each of them;
• an inventory of the property that is on the balance sheet of the enterprise;
• a list of organizations that have unfulfilled obligations to the debtor;
• information on the bank accounts of the firm.

The next stage is the disposal of the debtor's property. This is done by the arbitration manager.

At the final stage, the manager's report is analyzed and one of the following decisions is made:

• to extend the term for disposing of the property;
• introduce a reorganization procedure (renewal of the debtor's solvency);
• declare the LLC bankrupt and start the liquidation procedure;
• close the bankruptcy case.

Procedure for liquidation of an LLC with debts: basic rules The

liquidation procedure is carried out by a liquidator appointed by the court. It is he who forms the liquidation mass and ensures settlements with creditors. Moreover, their requirements are satisfied in the following order:

• salary to employees;
• insurance payments;
• taxes and fees;
• claims not secured by a pledge;
• contributions to the authorized capital.

All other requirements are met last. And if there were not enough funds for this, they are considered repaid.

The liquidation procedure, as a rule, takes a lot of time and requires certain knowledge, as well as the ability to navigate in legislative norms in order to make prompt and competent management decisions. If you need to liquidate an LLC in Dnipro , we recommend that you contact the UA "Absolute". We have qualified specialists with many years of experience in this field and loyal prices for all services.