Liquidation and Bankruptcy of enterprises

Liquidation of an enterprise – the expulsion of the firm from the official Governmental Registry, removal of the company from the tax record and full termination of all requirements for this legal body, its managements and members. Official liquidation of a firm is an expensive and long process. The procedure of liquidation can last from 6 to 8 months. It should also be considered, that during the time, when the process of liquidation of enterprise firms is in progress, representatives from Controlling Bodies can be expected to visit the company with checks.  Because of this, several types of liquidation of firms are practiced in law, and the experts at the law firm “Legal House” offer all sorts of services in firm liquidation:

“Alternative” options:

1. Reorganization by joining another firm;
2. Changing the founders for a new member with the replacement of the director and head accountant;
3. Bankruptcy;

 Liquidation of firms by means of joining with another firm

In this case, the enterprise, which is going to be liquidated, joins another enterprise. After this, the liquidated enterprise can be removed from the governmental registry of legal persons, therefore, legally the enterprise also doesn’t exist anymore. By means of a transfer certificate, the liquidated enterprise can be handed over to another legal person and by legislation, all rights and responsibilities of the liquidated enterprise are handed over to the enterprise, which the liquidated enterprise has joined.

After the execution of the reorganization in the form of joining another enterprise, the liquidated firm is issued with a certificate about the termination of its activities, and after the data is entered into the official governmental registry of legal persons, the legal person is officially considered liquidated. The tax body is also notified. A specific record is required from the tax body, about the balance of the firm, which the liquidated enterprise will be joining.  In aim to identify creditors, an announcement about the reorganization of the firm is published in the mass-media during the joining to another firm. The liquidation of a firm by means of joining another, takes around 3/4 months.

Liquidation of firms by the means of replacing the director and members

One of the quickest ways to complete the liquidation of firms, is a method, whereby the director, founders and head accountant are replaced, in addition one of the benefits of this method is the cost of it. According to the legislation of the Ukraine the responsibility for the activities of an enterprise lies on the director and head accountant (or in some cases the founder of the Company Ltd too), the replacement of managing persons can often solve many problems of the enterprise.
Thus, the enterprise can carry on with its activities, however all rights and responsibilities are delegated to other persons.

The process of such type of liquidation of a Company Ltd or other legal person lasts no longer than 3 days. Another advantage of this type of liquidation is that contact with the controlling bodies is reduced to a minimum, as a tax check visit is not always necessary in this case. Most often the change of management of the enterprise is done by selling the firm. New and previous founders sign a contract of sale for the firm, at the same time, the director and head accountant are made redundant, and new people are appointed for their roles.

The reasonable cost and small time scales of this type of firm liquidation lead to this being the most chosen type.

Liquidation of firms through bankruptcy

Other options of “alternative” termination of a firm’s activities exist, and are applied in difficult, non – standard situations (for example, this is how a firm with debt can be liquidated), when it is necessary to involve highly qualified arbitration managers, auditors, accountants and lawyers. For liquidation of firms with creditor debts: debts from counterparts and government budget, the best way is through bankruptcy. If necessary, at the same time as bankruptcy, an alternative method of liquidation can be used, relieving the founders and management of the enterprise in debt from further obligations;

Thanks to the legal firm “Legal House” using effective schemes, the procedure of bankruptcy takes up to 3 months.

The liquidation of firms is a complex procedure, which requires an individual approach, because in each separate case the order of reorganization and liquidation is always individual.
The level of state of each separate firm before it being closed varies, therefore in each case, our lawyers will suggest the optimum version (type) of terminating the firm’s activities.

If you urgently require assistance in liquidation of a firm, call our consultant on (0482) 34 91 91 and we will be happy to assist you with legal advice.