by NM

Uncategorized24. May 2021.0 comments

FIRM LIQUIDATION

About the firm liquidation

Law on Companies (“Official Gazette of RS” No. 36/2011, 99/2011, 83/2014 – other law, 5/2015,
44/2018, 95/2018 and 91/2019) stipulates that the firm liquidation (liquidation of a limited liability company), with bankruptcy proceedings and status
change, represents one of the 3 (three) ways of termination of a limited liability company and
its deletion from the register of economic entities.

Liquidation of a company can be carried out when the company has sufficient funds to cover all its assets
obligation.

Stages of the firm liquidation

The procedure of liquidation of a company is initiated by the decision of the assembly of the company, by a majority of two thirds of the total number of votes of all members of the company, although the founding act may provide for another majority, but not less than a simple majority of the total number of votes of the members of the company who have the right to vote a particular issue.

Liquidation of the company begins on the day of registration of the decision on liquidation and publication of the announcement of initiation liquidation, in accordance with the Law on Registration Procedure in the Business Registers Agency (“Official Gazette of RS” No. 99/2011, 83/2014 and 31/2019).

Initiation of liquidation does not prevent the determination and implementation of enforcement against the company in liquidation either conducting other proceedings against or for the benefit of the company in liquidation.
Initiation of liquidation has no effect on the submitted proposal for initiating bankruptcy submitted in accordance with the law which regulates the bankruptcy, and the creditors of the company in liquidation may submit a proposal for initiating bankruptcy during duration of liquidation for reasons prescribed by the law governing bankruptcy.

Phase I: Initiation of liquidation proceedings

The decision to initiate the liquidation of the company appoints a liquidation trustee, whose appointment to all
the representatives of the company lose the rights of representation of the company. The liquidator represents the company in liquidation and is responsible for the legality of the company’s operations.

The liquidation trustee may undertake the following activities:
1) perform actions on completion of operations started before the beginning of liquidation;
2) take actions necessary for the implementation of liquidation, such as the sale of property, payment of creditors and collection of receivables, 3) perform other tasks necessary for the liquidation of the company.

The announcement on initiating liquidation is published for 90 days on the website of the register of business entities and must contain: 1) invitation to creditors to report their claims, 2) address of the company’s headquarters, ie address for receiving mail to which creditors submit claims and 3) a warning that the creditors’ claims will be precluded if the creditors do not report them no later than 30 days from the day the advertisement expires.

Duties – Firm Liquidation

The liquidation manager is obliged to send a written notice to the known creditors who report the claim on initiating the liquidation of the company, no later than within 15 days from the day of the beginning of the liquidation of the company.

The Company is obliged to record all received claims receivables in the list of reported receivables and to compile a list of recognized and disputed receivables.

The Company may, within 30 days from the day of receipt of the application for a claim, dispute the creditor’s claim, in which case it is obliged to inform the creditor about it within the same period with an explanation of the dispute.

The Company may not dispute the claims of creditors whose claims are determined by an executive document.

If the creditor whose claim is disputed does not initiate proceedings before the competent court within 15 days from the day of receipt of the notification on contesting the claim and within the same period notifies the company in writing, that claim is considered precluded.

Phase II: Initial liquidation report – Firm Liquidation

The liquidation trustee shall compile the initial liquidation report no later than 90 days, and no later than 150 days from the day of the beginning of liquidation, and submit it to the Assembly for adoption.

The Assembly is obliged to make a decision on the adoption of the initial liquidation report no later than 30 days from the day when it was submitted for adoption.

The initial liquidation report must contain: 1) list of reported receivables, 2) list of recognized receivables, 3) list of disputed receivables with explanation of the dispute, 4) information on whether the company’s assets are sufficient to settle all liabilities of the company, including disputed receivables, 5) necessary actions for conducting liquidation, 6) time provided for completion of liquidation, 7) other facts of importance for conducting liquidation.

The adopted initial liquidation report is registered in accordance with the Law on Registration in the Business Registers Agency (“Official Gazette of RS”, No. 99/2011, 83/2014 and 31/2019), within 15 days from the day of adoption.

Phase III: Completion of the liquidation procedure – Firm Liquidation

Liquidation ends with the adoption of a decision on the termination of liquidation by the same parliamentary majority required to make a decision on initiating the liquidation procedure.

The documentation necessary for submitting a registration application for the completion of the liquidation procedure is as follows:

1) decision of the general meeting on termination of the liquidation procedure, 2) report of the liquidation trustee on the conducted liquidation, 3) statement of the liquidation trustee that all obligations of the company based on reported claims have been settled in full and that no other proceedings are conducted against the company, 4) division of the liquidation balance of the company, 5) decision of the company on the person to whom the business books and documents are entrusted for safekeeping or statement of the liquidation manager on the name and address of that person, 6) evidence of termination of tax obligations issued by the competent tax authority days at the time of submitting the request for deletion from the register, 7) proof of payment of the fee for deletion of the company.

Members of a limited liability company are jointly and severally liable for the obligations of the company in liquidation and after deleting the company from the register of business entities, up to the amount received from the liquidation balance.

Creditors’ claims become obsolete within three years from the day the company is deleted from the register.

The assets of the company in liquidation that remain after the settlement of all obligations of the company (liquidation balance) are distributed to the members of the company in accordance with the decision on the distribution of the liquidation balance of the company.

Upon completion of the liquidation, the company is deleted from the register of business entities in accordance with the Law on Registration in the Business Registers Agency (“Official Gazette of RS”, No. 99/2011, 83/2014 and 31/2019).

Recommendation

˝NM Lawyers˝ have many years of experience in successfully resolving and providing legal assistance in the liquidation process and we definitely recommend that you contact our office whether the process is ongoing or needs to be started or you are just thinking about starting the process. You will always receive the most relevant legal advice from our professional team of lawyers at all times.