LLC company Liquidation in Russia

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The procedure for LLC company liquidation in Russia has two ways of happening. A company can be liquidated if the founding members, who are called the shareholders, vote to dissolve it. If the company has been around for a certain length of time, which is written in its founding documents, it automatically goes out of business.

If a company fails to comply with Russian law, it risks being liquidated. If you need help with this process, we can help. If you want more information about how to liquidate a company in Russia, contact our lawyers.

Closing company in russia
Closing company in russia
open, company, russia

A Russian company goes bankrupt. What happens next?

The following steps must be taken to dissolve a company in Russia:

  • A thorough examination of the documents based on which the liquidation of the company was decided;
  • Verification of the company’s bank accounts and with the tax authorities;
  • Preparing the documents for liquidation and filing them with the Trade Register;
  • Publishing the decision to liquidate the company in the Official Gazette;
  • Closing the company’s bank accounts and announcing the liquidation.

The founders must report their decision to the Unified State Register of Legal Entities from Russia as soon as they decide to liquidate. They also need to appoint a liquidator. The liquidator’s role is to help the company apply the rules from the Civil Code during the entire liquidation process. A liquidation committee will take on all of the board members’ responsibilities and represent the company in court.

Liquidation is a legal procedure that must be announced in the government gazettes and the creditors must receive written notice about it. An intermediary balance must be issued after the time for submitting claims has passed.

The company’s employees or their representatives must also be notified of the liquidation of the business. They must be notified within two months before dismissal, although three months’ notice is required for collective dismissals.

The company’s balance must include information about the creditors’ claims and the company’s assets, as well as information about the claims examination results. These must be approved by the founders who took the liquidation decision. If there is not enough money to pay all the creditors, the company’s properties may be sold at an auction.

Company liquidation documents in Russia

When you are going to dissolve your business in Russia, the following documents will be needed:

  • the articles of association, the charter, and the bylaws of the company;
  • a certificate issued by the Trade Register which must contain the date for starting the liquidation process;
  • the statements and all the documents indicating the financial status of the company;
  • the minutes of the shareholders’ meeting and declaration showing the decision to dissolve the company.

We have lawyers in Russia who can help you with the legal documents needed to dissolve your company.

How will creditors be paid back?

When all the debts of the creditors are paid, a final balance is created and sent to the creditors. The debtors with priority are paid first so that everyone gets something. After that, you must issue a final balance, where you will tell the creditors how much money they will receive.
This must be approved again by the founders responsible for the liquidation decision.
All the company’s bank accounts in Russia must be closed, but only after the relevant balance sheets and other bank documents have been obtained. The Social Insurance Fund and the Pension Fund must also be notified of the company’s liquidation.

The remaining goods are divided among the shareholders. This is the final step in liquidation. The end of the liquidation process must be reported immediately to the Unified State Register of Legal Entities. Only after this submission is the company considered liquidated.

If a liquidation committee refuses to satisfy the claims of a creditor, then a claim against it may be raised and if it’s considered valid, the creditor will receive the payment from the remaining assets of the liquidated company.
The claims not covered are considered settled if the creditor hasn’t raised a claim to the court. A company unable to cover the claims is declared bankrupt, but only after a court has decided so.

How long does it take to liquidate a company in Russia?

The Russian taxation authorities must be announced regarding the liquidation of a company no longer than three days since the decision. After publishing the announcement regarding the liquidation in the specific publications, a term of two months must be appointed to receive and analyze all the claims. The minimum term during which a company may be liquidated in Russia is, at least, six months and it’s considered final when it is published in the Unified State Register of Legal Entities.

The liquidation method, either by the decided court or voluntarily, is decided according to the particular situation of the company. An “alternative” company liquidation is possible in the case of mergers and acquisitions in Russia. Although this is not essentially the same as voluntary liquidation caused by financial difficulties, the company that will be merged needs to transfer its assets, rights, and obligations to its purchaser.

For more details about the liquidation process, you may contact our law firm in Russia. Our Russian lawyers offer a wide range of legal services for investors who want to liquidate their companies.

LLC company Liquidation in Russia

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Open a Company in Russia
Open a Company in Russia
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LLC company Liquidation in Russia
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LLC company Liquidation in Russia
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Russian lawyers,
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Closing company in Russia
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LLC company Liquidation in Russia
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