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Bankruptcy Law in Russia
A Russian company goes bankrupt. What happens next?
The following steps must be taken to dissolve a company in Russia:
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:
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.
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