The process of liquidating a non-profit association passes through several mandatory stages, and its deletion from the Register of Non-Profit Legal Entities takes a minimum of 8 months. For each stage there are statutorily prescribed time limits, regardless of whether the association has carried out active operations or not.

Termination of Activity and Commencement of Liquidation

The first step is convening a General Meeting of the association’s members, which has the power to adopt a decision to terminate the activity, commence liquidation proceedings, set the liquidation period and appoint a liquidator. The minimum liquidation period is 6 months.

Notification to the National Revenue Agency (НАП)

After the liquidation decision is adopted, the association must file a notification under Article 77 of the Tax and Social Insurance Procedure Code with the territorial directorate of the НАП, according to the organisation’s registered seat. The НАП issues a certificate within 60 days of receiving the notification.

The certificate issued under Article 77 of the Tax and Social Insurance Procedure Code is a mandatory document for filing the application for entry of the liquidation in the Commercial Register. Following notification, the НАП carries out a review and may require the submission of various accounting documents and explanations, particularly if the association is registered for VAT and has carried out activity.

Entry of the Liquidation in the Register of Non-Profit Legal Entities

After receiving the certificate from the НАП, the documents for entry of the liquidation are filed with the Register of Non-Profit Legal Entities. The required documents include:

  • Application Б6;
  • Minutes of the General Meeting held;
  • Invitations to the members to attend the General Meeting;
  • Minutes of the meeting of the management body convening the General Meeting;
  • An up-to-date list of the association’s members;
  • A list of the members present at the General Meeting;
  • A notarised specimen of the liquidator’s signature;
  • A certificate under Article 77 of the Tax and Social Insurance Procedure Code;
  • A declaration as to the veracity of the circumstances submitted for entry under Article 13(4) of the Commercial Register and Register of Non-Profit Legal Entities Act;
  • A power of attorney, if the application is filed by another person;
  • A document evidencing payment of the state fee.

When an attorney files the documents, the attorney’s power of attorney need not be notarised, and the certification fees are reduced. Likewise, where filing is done electronically, the state fee is only 50% of the standard amount.

Publication of an Invitation to Creditors

After the liquidation is entered in the register, the liquidator publishes an invitation to the association’s creditors to submit their claims within the set liquidation period. The following documents are required in order to publish the invitation:

  • Application Г1;
  • The text of the invitation to creditors;
  • A declaration as to the truthfulness of the circumstances submitted for entry under Article 13(4) of the Commercial Register and Register of Non-Profit Legal Entities Act;
  • A power of attorney, if the documents are filed by a person other than the liquidator;
  • A document evidencing payment of the state fee.

The six-month liquidation period begins to run from the date on which the invitation to creditors is published in the Register of Non-Profit Legal Entities.

Responsibilities of the Liquidator

The liquidator, or a person authorised by them, is obliged to file a declaration-application with the National Social Security Institute (НОИ) for the issuance of a certificate for the handover of the association’s payroll records. The liquidator must provide the payroll records, as well as employment-law documents such as employment contracts, appointment and termination orders, supplementary agreements and applications for unpaid leave exceeding 1 month. The НОИ carries out a review of the social-insurance obligations.

In addition, the liquidator draws up an opening liquidation balance sheet as at the commencement date of the liquidation and a closing balance sheet covering the entire liquidation period, together with an explanatory report.

Decisions on the distribution of the remaining property after the satisfaction of creditors are taken in accordance with the statute, the instrument of incorporation, or by a decision of the General Meeting. In the absence of a decision, the liquidator has the right to take it independently. Persons who acquire property from the liquidation are liable for the association’s obligations up to the value of the property acquired.

Deletion of the Association from the Register

After the expiry of the liquidation period, the deletion of the association from the Register of Non-Profit Legal Entities may proceed. The documents required for this step include:

  • Application А15;
  • A certificate from the НАП under Article 77 of the Tax and Social Insurance Procedure Code;
  • A certificate from the НОИ under Article 22(2) and (3) pursuant to Instruction No. 5 of 30 June 2005;
  • Minutes of a General Meeting adopting the final balance sheet, the explanatory report and the liquidator’s report, releasing the liquidator from liability and distributing the property;
  • Invitations to the members to attend the General Meeting;
  • Minutes of a meeting of the management body convening the General Meeting;
  • An up-to-date list of the association’s members;
  • A list of those present at the General Meeting;
  • A declaration by the liquidator under Article 273(1) of the Commerce Act;
  • A declaration as to the truthfulness of the circumstances under Article 13(4) of the Commercial Register and Register of Non-Profit Legal Entities Act;
  • A power of attorney, if the documents are filed by another person;
  • A document evidencing payment of the state fee.

If the documents are filed by an attorney, Application А15 and the power of attorney do not require notarisation, thereby reducing the costs of the process.

Should you require further information, assistance or consultation regarding the liquidation of a non-profit association, please contact us on tel.: 0887550706 or by e-mail: [email protected]