For various reasons, managers of different companies may close their companies. Closing an organization is often required due to the lack of profit from activities. At the same time, the company may have significant debts to contractors, the tax service or other organizations, so the question arises of how to close an LLC with debts. The procedure can be performed in different ways, the choice of which depends on who initiates the process, as well as how many assets the company has.
Why do debts appear?
Before liquidating an LLC, the head of the company must pay off all existing debt. It is formed as a result of various reasons, which include:
- low profit margin, due to which it is not possible to cope with all required payments;
- suppliers sell goods with deferred payment, which leads to the formation of a fairly large payables;
- the company cannot pay taxes due to the lack of cash receipts;
- there is a bad relationship between company members;
- the occurrence of various force majeure circumstances.
Often, the total amount of debt exceeds the value of all assets owned by the company. In this case, the closure of the LLC is possible only through the bankruptcy of the company.
Features of closing a company with debts
Before closing, companies must pay off all their debts, as otherwise the tax officials will not be able to enter the necessary information into the Unified State Register of Legal Entities. Therefore, this procedure is distinguished by its duration and complexity.
Additionally, all creditors must be notified of the planned liquidation of the organization. They have the right to present their requirements to the organization, as a result of which it is often required to apply to the court to declare a company bankrupt.
Closing methods
Is it possible to close an LLC with debts? Even if a company has debts, a company can still be closed by several methods. These include:
- forced liquidation initiated by a court or other government agencies, most often the procedure begins with tax officials due to the fact that the company has significant tax debts;
- voluntary closure of the company is carried out after the founders make the appropriate decision, but after that it is required to pay off all debts, for which it is often necessary to sell the assets of the company;
- recognition of the enterprise as bankrupt, for which purpose an arbitration manager is appointed who is involved in monitoring, reorganization or bankruptcy proceedings;
- alternative methods of closing a company, involving its reorganization, sale, or even a change of founders, but often this method is recognized as illegal, so business owners are held accountable.
At the end of using any method, the company is excluded from the USRLE, but the legal consequences differ significantly. Therefore, before closing an LLC with debts, the founders must understand whether they can manage their debts on their own. If the available funds and assets are not enough, then the only option would be to declare the company bankrupt.
The nuances of forced liquidation
The closure of an LLC can be carried out not only at the request of the direct owners of the business, but also even of extraneous organizations. Usually the initiator of the forced closure of the company is the tax office.
The procedure applies to one-day companies, as they have not been engaged in entrepreneurial activities for a long time. There is a possibility that the company will simply be expelled from the Unified State Register of Legal Entities to employees of the Federal Tax Service. But often an initial check is carried out, and if debts are identified, then the bankruptcy procedure begins.
Company bankruptcy
Close an LLC with debts to creditors is possible through bankruptcy. To do this, the following actions are performed:
- holding a meeting of shareholders at which a decision is made on the need to declare the company insolvent;
- the decision is made out correctly;
- an interim liquidation balance sheet is drawn up;
- a bankruptcy petition is filed with the Federal Tax Service;
- filed an application with the court
- all creditors are notified of the bankruptcy of the company;
- a register of creditors is being drawn up;
- an arbitration manager is appointed by the court, studying all the documentation belonging to the company, and on the basis of the information received, he can carry out reorganization, the purpose of which is the financial recovery of the company;
- if no actions can lead to an improvement in the financial condition of the company, then bankruptcy proceedings are carried out consisting in the sale of assets belonging to the company;
- a final liquidation balance sheet is prepared, in which there is no information on debts, since they are repaid after the sale of assets, and if the debt remains, it is written off;
- the company is excluded from the register.
Before closing an LLC with debts through bankruptcy, you should make sure that this method is considered optimal for the founders, since the consequences of declaring the company insolvent are considered not too pleasant. The participants in the company will not be able to hold leadership positions or open their own business for the next 5 years.
Nuances of bankruptcy proceedings
In case of bankruptcy, an intermediate liquidation balance sheet of the LLC is certainly compiled, which contains information about all the assets and liabilities of the organization. Based on this document, the designated arbitration manager can determine whether it is possible to repay debts by selling existing assets.
To receive funds, bankruptcy proceedings are held, the features of which include:
- reveals all the property belonging to the company;
- transactions conducted during the last year, the main purpose of which was the sale of assets, are recognized as invalid if there are substantial grounds;
- an assessment of the identified values;
- the optimal trading platform for bidding is selected;
- concludes a contract with the operator;
- on the appointed day, the property is sold through an electronic auction;
- All funds received are used to pay off debts.
The founders, before closing the LLC with debts, should not use various prohibited methods aimed at the illegal sale of real estate owned by the company. Such actions can be considered as bringing the company to bankruptcy.
Is sanitation possible?
If the founders are themselves interested in restoring the solvency of the company, then the appointed arbitration manager can take up the reorganization process. It lies in the fact that various opportunities are used to improve the financial condition of the company. The following methods are usually used for this:
- funds are collected from debtors;
- obviously unprofitable contracts are terminated, if there is an opportunity to terminate further cooperation;
- materially responsible persons are identified in the company who, through their illegal or intentional actions, bring the company to bankruptcy;
- employees in senior positions in the company are replaced;
- there are new suppliers and buyers.
Often, such actions of the manager lead to the restoration of solvency, so the company can continue its work.
Voluntary liquidation
If the founders understand that the company has too little profit, then they have a question, how to liquidate the LLC in the presence of debts. For this, voluntary liquidation may be applied, consisting in the following actions:
- a decision is made by the founders to close the company;
- notified by the FTS about the decision;
- notifications are sent to all creditors, and information on liquidation is published in open sources;
- company assets are sold;
- debts are repaid in the correct order;
- the final liquidation balance sheet is being formed;
- contracts with employees are terminated;
- necessary changes are made to the register.
This method is applied provided that the company’s assets are sufficient to pay off the debt.
Alternative liquidation rules
Many founders, thinking about how to close an LLC with debts on their own, prefer to use alternative methods for these purposes. Their features include:
- this method is used by founders who do not want to use the costly standard liquidation procedures;
- such methods are not always legal; therefore, if employees of the Federal Tax Service reveal the use of a fraudulent scheme, then the heads of the company will be held accountable;
- even a reorganization cannot lead to the elimination of debts, so the new company will be forced to repay them.
If managers use illegal schemes, this can lead not only to the imposition of significant fines, but even to imprisonment for participants.
Change of founders
This method of alternative elimination is considered the most inexpensive. For this, the director, founders and place of registration simply change. There is a chance that the company will be automatically excluded from the register.
Before closing an LLC with tax debts in this way, you should make sure that all the actions performed are legal. The method is usually used for one-day firms. But within one year after the closure of the company, the tax service or creditors may pay attention to the abandoned organization. In this case, the founders will not be able to get rid of the obligation to repay debts.
Company reorganization
The procedure can be performed by merging or joining. All powers and debts of the reorganization enterprise are transferred to the new company.
This procedure has many pitfalls, as lenders are obliged to be notified of the process, which may suspend the reorganization due to debts. But even if the procedure is completed, the new company will still be forced to pay off debts.
How much does it cost to close an LLC with debts?
The cost of the procedure can vary significantly in different situations. If the process is carried out by the direct founders, then they pay only the state duty in the amount of 4 thousand rubles.
If business owners use the help of an intermediary, then expenses increase from 20 to 40 thousand rubles.
Conclusion
Even if the company has large debts, it is still possible to close it. For this, different methods can be used, each of which has both advantages and some disadvantages.
If the company cannot cope with debts even after the sale of property, then the only way out is bankruptcy. Some founders try to use alternative methods, but they are risky and illegal.