How to liquidate an LLC with debts

For voluntary liquidation of an LLC with debts, according to Articles 33 and 39 of the Federal Law on LLC (No. 14-FZ of 08.02.1998), the following steps must be performed:

  1. Convene a general meeting of the company’s participants;
  2. Unanimously adopt decisions on:
    • liquidation of the company;
    • setting up a liquidation commission, which is preferable for companies with debts or a large amount of property and a large staff;
    • establishment of the procedure and terms of liquidation, not exceeding one year (Article 57 of the LLC Law), as stated in Article 63 of the Civil Code.
  3. Formalisation and approval of the minutes regardless of the means of their creation, including digital ones;
  4. Transmission of information about the liquidation commission by the head of the liquidation commission to the registration authority (clause 20 of the law on state registration).

Liquidation of an LLC with debts should remain an open and transparent procedure, guaranteeing the possibility for creditors to make claims. Further it is necessary to:

  1. submit declaration No. R15016 to the tax service at the location of the organisation;
  2. publish an announcement of liquidation in the State Registration Herald;
  3. send written notices to all known creditors of the company;
  4. to enter information about the liquidation into the Fedresurs within three working days after the decision on liquidation is made;
  5. wait at least two months from the date of publication of the notice in the State Registration Gazette (according to Article 63 of the Civil Code) for creditors to file claims;
  6. after the expiry of the above term, an interim liquidation balance sheet shall be prepared.

The balance sheet shall contain the following information:

  • a list of the property of the liquidated organisation;
  • list of creditors’ claims and the results of their consideration;
  • list of claims based on legally enshrined decisions.

Once the interim liquidation balance sheet has been prepared, it must be assessed whether there are sufficient funds to satisfy all creditors:

1. In case of insufficient assets, it is necessary to file a bankruptcy petition (Article 63 of the Civil Code, paragraph 4) to avoid refusal to register the liquidation in the Unified State Register of Legal Entities or to bear subsidiary liability:

  • to the founders/participants of the LLC;
  • the head of the LLC;
  • the chairman of the liquidation commission.

2. If the assets are sufficient, the following procedures should be performed:

  • submission of the insurance contribution calculation to the tax office from the beginning of the settlement period to the date of submission of the liquidation balance sheet (Article 11 of the law on personalised accounting, paragraph 15 of Article 431 of the TC);
  • approval of the interim liquidation balance sheet at the general meeting of participants;
  • submission of a notification on the preparation of the balance sheet to the tax authorities (form No. R15016, Article 20 of the Law on State Registration);
  • settlement with the creditors of the LLC, including payments in cash only. In case of insufficient funds, the sale of property is allowed, the procedure of which is determined by the value of the objects of sale.

After all creditors have been settled, a liquidation balance sheet must be drawn up and approved by the general meeting. The following steps are then carried out:

  1. Payment of the state duty in the amount of 800 roubles (it can be waived if the documentsare drawn up digitally).
  2. The chairman of the liquidation commission submits to the tax service:
    • Form No. R15016;
    • liquidation balance sheet;
    • a document confirming payment of the state duty if the documents are submitted in paper form;
    • a document confirming the submission of information on insured persons to the Social Fund. Although the law does not require such submission, it is highly desirable to speed up the process.

Forced liquidation of an organisation

The Civil Code provides for compulsory liquidation of an LLC by court decision:

  1. Forced liquidation can be initiated even without violations on the part of the LLC, at the suit of a founder or participant. This is possible if further activity of the company becomes impossible or significantly hindered;
  2. in consideration of this claim, the court obliges the participants of the LLC or other relevant body defined by the constituent documents to carry out liquidation;
  3. in case it is proved that a violation of the liquidation process is likely, the court has the right to appoint an insolvency administrator.

The process of compulsory liquidation is similar to the process of voluntary liquidation, except for the stages of the decision on liquidation and notification of the tax service on liquidation. In this case, both actions are performed by the court (Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation of 13.01.2000 No. 50).