By the legislative amendments promulgated in Official Journal No. 82 of 27 September 2024, the so-called "fast-track liquidation procedure" was introduced into the Commerce Act. Until then, the dissolution and striking off of commercial companies – including those that had never carried on any activity or had long been "frozen" – took at least 8 months. The fast-track liquidation provides not only for shortened time limits but also for additional procedural relief. This reduces the time needed to strike a company off the Commercial Register to approximately 4 months.
Which companies are entitled to fast-track liquidation?
All commercial companies may take advantage of this procedure – EOOD, OOD, EAD, AD, variable-capital companies, general partnerships and limited partnerships. In order to be entitled to fast-track liquidation, they must simultaneously meet the following conditions:
they must not have carried on any activity, or must have ceased their activity more than 12 months ago;
they must not have employed workers and employees, or must have terminated the employment relationships with them more than 12 months ago;
they must not have been registered for VAT, or must have terminated their registration more than 12 months ago;
they must have no outstanding obligations to the State and the municipalities;
there must be no pending proceedings for the establishment of tax liabilities and mandatory social-insurance contributions to which the National Revenue Agency is a party;
they must not be a defendant in court proceedings, a debtor in enforcement or order-for-payment proceedings, and no enforcement must have been commenced against them under the Special Pledges Act or the Financial Collateral Contracts Act.
How does the fast-track liquidation procedure work?
Unlike the standard liquidation procedure, the fast-track procedure does NOT require prior notification of the НАП. The issuance by the НАП of a certificate under Article 77 of the Tax and Social Insurance Procedure Code is not a mandatory condition for entering the liquidation in the Commercial Register.
-
Entering the fast-track liquidation in the Commercial Register
To commence these proceedings, a decision of the competent body of the relevant company is required (the sole owner of the capital, the general meeting of the partners or shareholders, or the unlimited-liability partners). The minutes must expressly state that the liquidation will be carried out under the conditions of the fast-track procedure.
The following documents are submitted to the Commercial Register:
Minutes of the General Meeting of the partners/shareholders, or of the sole owner of the capital or of the unlimited-liability partners, on the dissolution of the company and its entry into liquidation, the conduct of fast-track liquidation proceedings, the appointment of a liquidator and the fixing of a period within which the liquidation is to be carried out;
Invitations to the partners/shareholders/unlimited-liability partners to hold the General Meeting;
A notarially certified specimen signature of the liquidator;
A declaration by the liquidator under Article 274а(1) and (3) of the Commerce Act;
An application under Article 5(10) of the Social Insurance Code (using the template);
A declaration by the liquidator as to the truth of the circumstances declared for entry and the acceptance of the acts submitted for announcement, under Article 13(4) of the Commercial Register and Register of Non-Profit Legal Entities Act;
A power of attorney, if the application is not filed personally by the liquidator;
A document evidencing payment of the state fee.
The period of the liquidation may not be shorter than 3 months.
This period begins to run from the date of announcement of the invitation to creditors in the Commercial Register, and not from the date of entry of the liquidation.
Where the documents are filed by an attorney, the attorney's power of attorney need not be notarially certified. In addition, attorneys have electronic signatures and, where the documents are filed electronically, only 50% of the state fee due is payable.
After the application for fast-track liquidation is filed with the Commercial Register, the Registry Agency:
sends electronic notification to the НАП of the receipt of an application for the cessation of activity and the conduct of liquidation under the conditions of the fast-track procedure. Within 30 days, the НАП provides the Registry Agency electronically with the information at its disposal as to the presence or absence of the circumstances under Article 274а(1), items 1–5 of the Commerce Act;
sends the application under Article 5(10) of the Social Insurance Code electronically to the НОИ. Within 30 days, the relevant territorial division of the НОИ issues a certificate of handover of the payrolls, provided that the company has no outstanding obligations for social-insurance contributions. The certificate is sent electronically to the company and to the Registry Agency. If the company had employees, the liquidator or a person authorised by the liquidator must hand over to the НОИ the payroll records and the remaining employment-law documents, such as employment contracts, orders for the appointment and termination of employment contracts, additional agreements and applications for unpaid leave exceeding 1 month.
The registration officer rules on the application for entry of the cessation of activity under the conditions of fast-track liquidation AFTER receiving the information from the НАП.
-
Invitation to creditors
After the liquidation is entered in the Commercial Register, the liquidator is obliged to publish an invitation to the company's creditors to bring their claims within the liquidation period.
The following documents are required in order to announce the invitation in the Commercial Register:
Application form Г1;
Invitation to creditors;
A declaration by the liquidator under Article 13(4) of the Commercial Register and Register of Non-Profit Legal Entities Act as to the truth of the circumstances declared for entry and the acceptance of the acts submitted for announcement;
A power of attorney, if the application is not filed personally by the liquidator;
A document evidencing payment of the state fee.
-
Striking the company off the Commercial Register
After the expiry of the liquidation period, the satisfaction of the creditors and the distribution of the company's remaining assets, the company may be struck off the Commercial Register.
The documents required to strike the company off the Commercial Register are:
An application using the template (depending on the type of commercial company);
Minutes of the General Meeting of the partners/shareholders, or of the sole owner of the capital or the unlimited-liability partners, adopting the closing balance sheet, the explanatory report to the balance sheet and the liquidator's report, releasing the liquidator from liability, distributing the company's assets remaining after the liquidation, and so on;
Invitations to the partners/shareholders or the unlimited-liability partners to hold the General Meeting;
A declaration by the liquidator under Article 273(1) of the Commerce Act;
A declaration by the liquidator under Article 13(4) of the Commercial Register and Register of Non-Profit Legal Entities Act as to the truth of the circumstances declared for entry and the acceptance of the acts submitted for announcement;
A power of attorney, if the application is not filed personally by the liquidator;
A document evidencing payment of the state fee.
Within 30 days of the date on which the company is struck off the Commercial Register, a tax return under Article 162(1) of the Corporate Income Tax Act for the last tax period is filed with the НАП. The last tax period of a company dissolved by liquidation covers the time from 1 January of the year in which the striking off was carried out until the date of the striking off.
Where the date of the striking off falls before the expiry of the time limit for filing the annual tax return for the previous year and that return has not been filed, it is filed within 30 days of the date of the striking off. The corporate tax due for the last tax period is paid within the time limit for its declaration.
If you need legal advice and assistance with the liquidation of a company, contact us on 0887550706 or by e-mail: [email protected]
