When it is time to close your business in Russia and you have decided not to sell it or transfer it to new owners, liquidation may be the way to terminate the business. This may be a voluntary decision by the founders or may be forced by a court judgment. A forced liquidation may be ordered because of a license violation, multiple or gross violations of the law, or discovery of an invalid registration at the time the business was established. No matter what the reason, the procedure will remain pretty much the same.
Process For Liquidation Of A Business In Russia
The liquidation process is a lengthy one that involves satisfaction of all creditors’ claims and company’s removal from the state register of legal entities. As soon as a business has made the decision to liquidate, its authorized representative must immediately notify the registering body which will add the term “in the process of winding up” to the official name of the legal entity. This way, creditors and potential creditors will know that the business is in the process of closing. Once the registering body has been notified, the following steps will be followed:
- Appointment of a liquidator. This may be a committee or an individual liquidator and it is given the authority to manage the daily business of the legal entity including its representation in courts.
- Notification and identification of creditors. The liquidator’s main task is to identify all debts of the legal entity and to make settlements with its creditors. The liquidator must publish a notification of liquidation in a special newspaper as well as online and provide a time frame for filing of claims by its creditors. The time frame may not be less than two months from the date of such publication. The liquidator must also notify all creditors known to him of the liquidation. In addition, the liquidator must take all possible measures to receive the outstanding debts due to the company under liquidation by its debtors.
- Preparation of interim liquidation balance sheet. Upon expiration of the term for filing of claims by the creditors, the liquidator must prepare an interim liquidation balance sheet representing data on actual property assets of the legal entity under liquidation, the list of claims asserted by its creditors, and the results of consideration thereof.
- Settlement of debts. Upon approval of the interim liquidation balance sheet, settlements with the creditors of the legal entity shall be initiated. They are performed in order of precedency established by the Civil Code of the Russian Federation.
- Approval of final balance sheet. The liquidator prepares a final liquidation balance sheet, which is to be approved by the authorities who made the decision to liquidate the legal entity.
- Transfer of property. The remainder of the property shall be transferred to the founders or members of that legal entity.
- Registration of liquidation. The liquidation is considered to be fully completed and the legal entity is considered to be liquidated once such an entry is made into the state register of legal entities.
Jus Privatum Can Help With the Liquidation of Your Business
Whatever your reason for deciding to liquidate your business in Russia, the business attorneys at Jus Privatum can simplify your end of the process by taking care of the legal requirements for you. If you have questions about liquidation, contact us through the link on this page.