Liquidation of a commercial company is a voluntary procedure for the distribution of its assets after its termination. The purpose of liquidation is to collect and liquidate all of the company’s assets and, after all creditors have been satisfied, to distribute the remainder among the partners.
The current Commercial Act (CA) in Chapter Seventeen “Liquidation” (Art. 266 – 274) contains the general rules for the liquidation of a commercial company.
With issue 82 of 27.09.2024 of the State Gazette the so-called “expedited liquidation proceedings” were introduced into the Commercial Act, which introduces simplified rules and short deadlines for the termination of a company.
Which companies are eligible for fast proceeding?
Any commercial company that meets the criteria for fast-track production can benefit from this procedure. The conditions for this are as follows:
1.has not carried out any activity or has ceased its activity more than 12 months ago;
2.has not hired workers or employees or has terminated employment relationships with them more than 12 months ago;
3.does not have registration under the Value Added Tax Act or has terminated its registration more than 12 months ago;
4.there are no outstanding debts to the state and municipalities;
5.there is no pending proceeding to establish tax liabilities and obligations for mandatory social security contributions, to which the National Revenue agency is a party;
6.is not a defendant in court proceedings, a debtor in enforcement or order proceedings, or no enforcement has been initiated against him under the Special Pledges Act or the Financial Collateral Contracts Act.
What does the fast proceedings for liquidation of a company procedure include?
The fast proceeding for liquidation of a company begins with a decision of the company’s competent body, which must include a decision to conduct fast proceedings.
In the fast proceeding liquidation procedure, prior notification to the National Revenue Agency is not required, as is the case with the standard procedure. The liquidation period cannot be shorter than three months. This period begins to run from the date of the announcement of the invitation to the creditors.
After the liquidation period has expired, the creditors have been satisfied and the remaining property has been distributed among the partners, the company may be deleted from the Commercial Register.
Within 30 days from the date of deletion of the company from the Commercial Register, it is necessary to submit to the National Revenue Agency a tax return under Art. 162, para. 1 of the Tax Code for the last tax period. This is the period from January 1st of the year in which the deletion was made to the date of deletion.
When the documents are submitted by a lawyer, the power of attorney does not need to be notarized, and the fees to the Commercial Register are 50% lower when the documents are submitted electronically.
If you need legal advice and assistance in liquidating a company, contact us.