We often give you information about starting a business, but now it’s time to tell you what’s next if that business fails and it`s tome for closing a company.
One of the most common procedures when the business has not started or there are conflicts between the partners is related to the termination of business and liquidation of the company.
Often a company is liquidated if the company does not carry out commercial activity or the partners (the sole owner of the capital) do not want to continue trading due to financial or organizational factors. In this article we will clarify the procedure for termination and liquidation of a company or the so-called. “Closing a company”.
Before we move on, we want to make an important clarification. The termination of the activity of LTD is not equivalent to closing a company. Any company may cease to exist but continue to exist as a legal entity. This is the so-called “Activity freeze”. In this case, the company remains registered in the commercial register. Although it does not operate, the company will have to prepare and submit various tax and accounting documents.
In order for an Ltd to be deleted from the commercial register, a liquidation procedure must be carried out. Unlike the registration of a new company, which is fast, relatively simple and cheap, the liquidation of Ltd. and Ltd. is a long, more expensive and complex process.
When closing a company, it goes through several stages, which take at least 8 months.
First step: Notification to the NRA
After a decision is made to close a company, the first step is to notify the territorial directorate of the NRA at the seat of the trader notification under Art. 77 of the TSSPC.
The NRA issues a certificate for the notification within 60 days from the receipt of the notification.
Mandatory here is the certificate under Art. 77 of the TSSPC to be attached to the application for entry of the liquidation in the Commercial Register.
It should be borne in mind that after the notification of the forthcoming closure of the company, the NRA inspects the company. Various accounting documents and explanations may be required in this regard. This happens especially if the company has been operating and is registered for VAT. If from the tax-insurance account of the company, from its commercial and accounting documentation or from other available data it can be concluded that it owes taxes or compulsory social security contributions, the public contractor may impose precautionary measures on its property.
Second step: Entry of the liquidation of Ltd. in the commercial register
After issuing the certificate under Art. 77 of the TSSPC, the documents for announcing the closure of a company shall be submitted to the commercial register.
The required documents are:
- Statement B6;
- Minutes of the General Meeting of the partners in Ltd., respectively. to the sole owner of the capital of EOOD, for termination of the company and its declaration in liquidation, appointment of a liquidator and determination of the term in which the liquidation shall be carried out;
- Invitations to the partners in Ltd. to hold the General Meeting;
- Notarized sample of the liquidator’s signature;
- Certificate under Art. 77 of the TSSPC;
- Declaration regarding the truthfulness of the circumstances declared for entry and the acceptance of the acts submitted for announcement under Art. 13, para. 4 of Commercial Register Act by the liquidator;
- Power of attorney, if the application is not submitted personally by the liquidator;
- Document for paid state fee.
In most cases, the liquidator is usually the manager. The liquidator may also be one of the partners or a third party.
The term of closing a company cannot be shorter than 6 months. This period runs from the date of the announcement of the invitation to the creditors in the commercial register, and not from the entry of the liquidation. If necessary, the deadline may be extended.
Third step: VAT deregistration
Companies do not have to enter the VAT deregistration procedure in case of liquidation. The law gives them the right to choose – to deregister or keep their VAT registration until the date of their deletion in the commercial register.
Deletion of Ltd. from the commercial register
After the expiration of the liquidation period, the satisfaction of the creditors and the distribution of the remaining property of the company among the partners, the company may be deleted from the commercial register.
The necessary documents for closing a company in the commercial register are:
- Statement A4;
- Certificate under Art. 77 of the TSSPC by the NRA;
- Certificate under Art. 22, para. 2 and para. 3 of Instruction № 5 of 30.06.2005 of the NSSI;
- Minutes of the General Meeting of the partners in Ltd., respectively. to the sole owner of the capital of EOOD, for acceptance of the final balance sheet, the explanatory report to the balance sheet and the report of the liquidator, for release of the liquidator from liability, for distribution of the property remaining after the liquidation, etc .;
- Invitations to the partners in Ltd. to hold the General Meeting;
- Declaration under Art. 273, para. 1 of the Commercial Law of the liquidator;
- Declaration regarding the truthfulness of the circumstances declared for entry and the acceptance of the acts submitted for announcement under Art. 13, para. 4 of Commercial Trade Act by the liquidator;
- Power of attorney, if the application is not submitted personally by the liquidator;
- Document for paid state fee
Within 30 days from the date of closing a company in the commercial register, a Tax Return under Art. 162, para. 1 of CITA for the last tax period. The last tax period of a company terminated by liquidation covers the period from January 1 of the year in which the deletion was made to the date of deletion.
When the date of deletion is before the expiration of the deadline for filing the annual tax return for the previous year and the same has not been filed, it shall be filed within 30 days from the date of deletion. The due corporate tax for the last tax period is paid in the term for its declaration.
In case you need additional information, assistance or consultation in connection with the closure of a company and the liquidation of Ltd., T&G Consulting is here for you.
