Compulsory liquidation of LLC. The order and features of the event. And what expect in these cases?

Compulsory liquidation of a company is a process of closing a company initiated not by the managers or founders of the company. Simply put, the procedure is initiated by third parties, usually tax authorities or creditors.

The procedure for compulsory liquidation differs from voluntary liquidation, when the founders themselves are the initiators of the closure of the LLC. The main differences are as follows:

• In case of voluntary liquidation, the founders need to assemble a meeting of owners to make an appropriate decision.
• Then the document is submitted to the tax and labor inspectorate.
• All necessary measures are being taken for the environmentally friendly closure of the company – the reduction of employees, the preparation of an interim liquidation balance sheet.
• Closing of financial obligations – calculation of employees, closing of debts, carrying out final transactions with counterparties, payment of taxes.
• Preparation of the final liquidation balance sheet.
• Final submission of the full package of documents to the tax service.
• Making changes to the Unified State Register of Legal Entities.

The terms and procedure of compulsory liquidation differ significantly from the above procedure. We will tell you more in this article.

Goals and reasons for the compulsory liquidation of any legal entity

As a rule, the purpose of closing any company is to exclude the company from the register of the Unified State Register of Legal Entities after the relevant court decision.

There may be several reasons that lead a company to forced liquidation caused by a decision of third parties. This list includes:

• Violation by the company of regulatory legal acts of the Russian Federation regarding the implementation of entrepreneurial activities.
• The absence of licenses or certificates for the implementation of any activity, despite the fact that the company actually provided such services.
• Refusal to pay taxes or the presence of incorrect data in the filed tax return.
• Debt to creditors and counterparties.
• The presence of erroneous information about the company in the Unified State Register of Legal Entities, provided that they were not eliminated within the time prescribed by law.

All of the above points are the basis for filing a statement of claim to the court with a demand for the compulsory liquidation of a legal entity by the Federal Tax Service or creditors.

Compulsory liquidation of LLC by the tax authorities

Since 2017, thanks to changes in legislation, the Federal Tax Service of Russia has received the authority to forcibly close a company if it has ceased to conduct actual activities. Those legal entities that do not submit reports within 12 months in accordance with the requirements of the legislation of the Russian Federation may get into such a situation. This risk occurs from the 12th month of non-receipt of reports by the tax authorities. However, it is difficult to predict how quickly the inspector initiates the case of closing the company. The law does not prescribe a clear time interval between unreleased reporting and exclusion from the register of the Unified State Register of Legal Entities. This means that from the moment of delay until the start of the procedure, it may take several weeks or several months.

As a rule, the criteria for recognizing a legal entity as invalid are reduced to the fulfillment of two points:

• Non–reporting during the calendar year – as we noted earlier.
• No cash flow on all accounts registered with the company.

And in this case, it does not matter what assets the company has and how much money the company has in its accounts.

As a rule, the procedure for excluding a company from the register of the Unified State Register of Legal Entities is reduced to the following stages:

• Adoption and issuance of a decision on the exclusion of a legal entity from the register of the Unified State Register of Legal Entities.
• Publication of relevant information in the “Bulletin of State Registration” within three working days.
• Compliance with a three-month period to search for persons who may be against the closure of the company. As a rule, these include creditors or other economic entities.
• Amendments to the Unified State Register of Legal Entities regarding the data on the closure of the company, if there are no objectors.

General procedure for compulsory liquidation of a company through the court

As a rule, in this case, the initiator of the closure of the legal entity must submit to the Arbitration Court of the Russian Federation a statement of claim and a package of documents justifying the decision. It is important to take into account that the compulsory liquidation of a company in court takes up to one year. This period includes the following events:

Appointment of a liquidator or liquidation commission.

A liquidator or liquidation commission is an entity that directly deals with the liquidation of a legal entity in compliance with all procedures prescribed by the legislation of the Russian Federation.

The liquidator’s activity is regulated by Article 62 of the Civil Code of the Russian Federation and Article 57 of the Federal Law “On Limited Liability Companies”. At the same time, the document does not contain a clear list of persons who can become liquidators or be part of the liquidation commission. Thus, it can be any person or organization that has an idea of the compulsory liquidation procedure and relevant knowledge of the legislation.

Most often, the liquidators are the general directors or one of the founders of the company. It may also be a collegial body appointed by the court.

Notification of public authorities.

The second stage, after the approval of the liquidation authority, it is necessary to make public the tax inspectorate about the liquidation procedure that has begun. This must be done within three business days. The Tax Service enters data on the beginning of the liquidation procedure in the Unified State Register of Legal Entities within five working days.

Disclosure of information on liquidation.

The public publication of information on the procedure of compulsory liquidation includes sending relevant data to the journal “Bulletin of State Registration” and on the Fedresurs service.

Preparation of necessary documents. This list includes:

1. Specially completed form.
2. Statement of the liquidation balance.
3. Receipt of the paid state duty.
4. Submission of special reports to the Pension Fund of Russia in accordance with the law “On Individual accounting in the compulsory pension insurance system”.

The beginning of the tax audit.

After receiving the notification of the liquidation of the company, the inspectors of the Federal Tax Service can initiate an on-site tax audit within two months. As a rule, the legislation of the Russian Federation does not establish separate requirements for conducting such an audit. Thus, the tax authorities can act in accordance with an individual plan, which may include inventory, inspection, familiarization with documents and their seizure.

As a creditor, the Federal Tax Service authorities have the right to send a request for the company to include the amounts of penalties and tax arrears in the register of creditors’ claims.

As a rule, after the audit, its results are drawn up within the framework of a special act. In case of disagreement with the conclusions and arguments of the tax service, the liquidated company has the right to respond with an objection within 15 days from the date of receipt of the act.

Preparation and delivery of the interim liquidation balance sheet.

As a rule, the liquidation commission is engaged in this together with the chief accountant of the enterprise. The document contains data on the quantity, value and composition of the property on the balance sheet of the company, on the list of claims made by creditors.

Closing accounts payable.

It is important to take into account that this item always follows after the delivery of the interim liquidation balance sheet. The fact is that the liquidator must understand the volume of assets and the ability of the company to pay for all obligations in the manner prescribed by the legislation of the Russian Federation. If the company does not have enough property to meet all the requirements, then a bankruptcy claim may be filed against it. In this case, the liquidation procedure will take place in accordance with a different procedure.

Preparation of the final liquidation balance sheet.

After the creditors’ claims are fulfilled in full, the company needs to draw up a final liquidation balance sheet. As a rule, assets remaining after payment of obligations are reflected there. This property and funds are distributed among the participants of the LLC. The fact of transfer of assets to interested parties is prescribed in the act of acceptance and transfer.

Closing of all current accounts of the company.

Closing bank accounts is an integral process in the liquidation of any company. As a rule, the deposit is stopped being used after the liquidation balance is handed over to the tax service to reduce the risks of incorrect reconciliation of the report and the balance on the account. However, the law does not prohibit liquidating the account even before the balance sheet is prepared.

What are the consequences of compulsory liquidation of a legal entity?

Of course, any compulsory liquidation of an LLC cannot pass without a trace and almost always has certain consequences. Most often they concern the founders and management of the company as persons who are directly responsible for the functioning of the company. In particular, we are talking about the following:

• If a member of the company has more than 50% of the share in the authorized capital, he will not be able to be a founder or director of a new company within the next three years from the date of closure of the company.
• If the company has a tax debt in any amount, then it may be charged penalties for late payments. At the same time, it often does not matter what amount of debt the LLC has.
• The onset of subsidiary liability. Creditors of the company have the right to make material claims against the founder and director of the company. It is important that creditors can take advantage of this opportunity within three years after the compulsory liquidation of the LLC.

Among other unpleasant consequences, we can note the need to reduce employees in accordance with the norms of the Labor Code of the Russian Federation. This means that employees should receive an average monthly payment. In some cases, it can reach two months of earnings.  

Is it possible to terminate the compulsory liquidation procedure?

In case of disagreement with the receipt of a decision or a lawsuit on the closure of a legal entity, the founder or director has the right to submit an application drawn up in the form P38001. The document should reflect objections in connection with the liquidation of the company. 

The applicant can submit the form electronically, certifying the document with an electronic digital signature or bring it to the Federal Tax Service in person. In the second case, notarization is required. 

When is it better to bring the process of forced closure of a company to an end?

No matter how paradoxical it may sound, but there are situations when it makes no sense to stop the forced liquidation of an LLC. 

This refers to a situation when the liquidated company is really no longer needed by its founders. Often, the owners of the company no longer conduct actual activities, but continue to submit “zero” reports or do not report at all. Then it makes no sense to stop the compulsory liquidation due to the longer, more expensive and complicated procedure of voluntary closure of the LLC. 

Preventive measures to reduce the risks of forced liquidation of a legal entity

In order not to think about the occurrence of a case of forced closure of the company, it is necessary to follow some simple rules: 

• Make informed and timely decisions as a company manager.
• Know about all the decisions made by the heads of departments in the LLC. 
• Periodically hold scheduled meetings to collect reports from subordinates. 
• Be aware of all disrupted transactions where there is a risk of debt formation.
• Monitor the accounting of the revenue and expenditure part of the budget. 
• Monitor the timely submission of accounting and tax reports. 

Lawyers and financial specialists of VALEN provide services for the liquidation of the company with the implementation of all procedures in a short time. We also offer comprehensive consulting support of a business in liquidation and help to issue a package of documents with its subsequent submission to official authorities.