Liquidation of business

Liquidation of a company entails its termination. Following liquidation, the rights and obligations of the liquidated entity do not pass by succession to other persons.

A company may be liquidated in the following cases:

• by decision of its founders (voluntary liquidation)
• by a court invalidating the registration of a company in connection with violations committed during its establishment, if such violations are deemed unrectifiable
• by a court decision in case of carrying out activities prohibited by law, or carrying out activities without a license or without applicable permission
• in case of bankruptcy (insolvency) of a company ruled by a court
• by decision of the authorized body in case of failure to restore business activity within 3 years from the date of putting the business in inactive mode due to the failure to carry out financial and economic activities

The founders of a company or the body that made the decision to liquidate the company appoint a liquidator and establish the procedure and deadline for liquidation. From the moment the liquidator is appointed, the powers to manage the affairs of the company are transferred to the liquidator.

The liquidator takes measures to identify creditors and collect receivables. The liquidator publishes an announcement in the media about the liquidation of a company. The announcement of liquidation shall indicate the procedure and deadline for filing creditors' claims. This period cannot be less than 2 months from the date of such publication.

The property of the company remaining after satisfaction of the creditors' claims is transferred to its founders.