Terms of business liquidation in Ukraine in 2023
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The war has affected all spheres of life and, of course, business has not been spared. Many Ukrainian and foreign company owners realized that the business ceased to be profitable and had to be terminated. In such a situation, there is only one solution – to terminate the company as quickly as possible, with minimal losses and without further liability for the activities of the company.
Often there is a need to “get rid” of the long-dormant company, which creates a lot of inconveniences, such as filing statements, accounts payable, debts to the budget and hired employees. The reasons for the liquidation of a problematic and non-problematic company can be very many. Moreover, even the presence of a foreigner among the founders has no effect on the liquidation process. In this article we will consider the main points and terms of liquidation of an unprofitable company.
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How long does it take and who is interested in alternative company liquidation?
The fastest and easiest option is “alternative” or a so-called “express”, liquidation. It allows you to avoid a complicated and lengthy liquidation procedure and complete bankruptcy. That is, the company will continue to work, but you will no longer have anything to do with its activities. You need to sell the company or a share in the authorized share capital, if there are several owners, and to make changes in the Unified State Register.
You can execute the act of acceptance and the contract of sale of the share in the LLC very quickly. Our lawyers will prepare all necessary documents and will accompany you and the future owner of the company to the notary. Then we will submit the documents to the registrar, who will change the founders/members of the LLC in the USR.
Please note! Immediately after making changes to the USR you, as the founder of the company, are already completely free from the long procedure of liquidation.
If you, besides the founder, were also the director of the company, the new owners will need to take and notarize a decision to change the director. You also need to prepare an application, which, together with a notarized copy of the above decision is submitted to the registrar. Thus, you as a director of the company will disappear from the Unified State Register.
This procedure with prompt and correct preparation of documents will not take more than 1 business week.
Please note! You can use the alternative method of liquidation only if the organizational and legal structure of your company is a Limited Liability Company. This procedure does not apply to a private business during the war.
We can easily find buyers, if your company was not engaged in activity, has no employees and debts to creditors or the state. However, there are often cases where a company has debts or has been engaged in dubious activities. Our legal professionals and experience will help us find a solution for such situations as well.
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What is the procedure and period of liquidation for a company that has long been dormant?
The liquidation procedure of a non-functioning company consists of the following steps:
- Holding the general meetings;
- Making a decision to terminate activities;
- Appointing a liquidator/liquidation commission;
- Drawing up the relevant decision in the minutes (if there is only one member, it will be just a member’s decision) and submitting the documents to the state registrar;
- The registrar makes an entry in the Unified State Register on the termination of activities, and the company begins to pay its creditors and wait for the tax audit.
Back in pre-war times, the appointment of a tax audit could take months.
Usually a minimum period of two months was given for creditors to make claims. In wartime, the queue of those to be audited does not move, but only increases. Therefore, this deadline is difficult to predict.
Consequently, it is almost impossible to close the company in a few months through termination. Under standard conditions, it is very positively estimated that the liquidation procedure lasts eight months and more.
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What is the procedure and period of liquidation for an active company?
The liquidation procedure will be similar to that of a company that was not in business, but a lot of time will have to be spent on the procedure for dismissing employees. According to current legislation, the employees must be notified personally about the dismissal and at least two months in advance. However, it is not forbidden to fire an employee at his own will.
The procedure for dismissal of employees is strictly regulated by law and depends on whether certain categories of employees have benefits (e.g. maternity leave for children under the age of three, women with children under the age of three, etc.).
It is very important to comply with all procedural requirements when laying off workers and inform the employment center about mass layoffs when liquidating a company. If you dismiss workers with gross violations of the law, you will face fines and even lawsuits.
Therefore, it is important to engage a qualified lawyer with experience and successful cases of liquidation.
Another stumbling block can be the availability of property that needs to be evaluated and sold. After settling with creditors, you can divide the balance between the founders according to the size of the shares. We talked about this in more detail here.
This is the longest liquidation procedure, which lasts up to two years.
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What to do if you need to urgently liquidate the company?
In addition to the procedures described above for terminating activities by liquidation, there is also bankruptcy. It also has its procedural peculiarities and never goes quickly.
If, for some reason, you need to urgently “get out of business”, the only way is to transfer management and corporate rights to the person who will handle the termination of this company. This can be done within a few days.
We will help you to choose the best option and quickly terminate the company in Ukraine.
Our specialists individually approach each situation and guarantee a one hundred percent success. If you have any additional questions, please contact our specialists for consultation – we will gladly help you solve even non-standard situations.
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