Liquidation and reorganization of a legal entity

A legal entity acts as an organization created and registered in accordance with the procedure established by law. The company has in the operational management, ownership or economic management of separate property. It is responsible to them for the obligations that it assumes when interacting with other entities. On its own behalf, the company can exercise and acquire personal non-property and property rights, make transactions, be a defendant or plaintiff in court. In the course of its activities, the created enterprise may undergo various changes. Let us further consider how the reorganization and liquidation of a legal entity takes place.

Terminology

The concept of reorganization of a legal entity is provided for in the Civil Code. The norms clearly define the specifics of this procedure. In accordance with the provisions of the Code, the reorganization of a legal entity is the relative termination of the enterprise with succession. The latter means the transfer of duties and rights from one company to another. Liquidation is the complete termination of a legal entity. In this case, succession is not provided.

Classification

In the current edition of the Civil Code, as in the previous one, the types of reorganization of a legal entity are established. However, there were only three in the past Code. In the modern version of the legislation, there are five of them:

1. Conversion.
2. Joining.
3. Selection.
4. Merge.
5. Separation.

These types of reorganization of a legal entity have their own characteristics. Consider them.

Merger

The reorganization of a legal entity in this form involves the formation of a new enterprise and the cessation of the entities involved in this procedure. The duties and rights that belonged to the companies before the merger go to the newly formed corporation. The basis for their adoption is the deed of transfer. The formed company acts as the universal successor of entities that ceased to exist after their reorganization was carried out.

Legal entity affiliation

This form is different in that one company is adjacent to another. In this case, also all the duties and rights of the existing enterprise pass to the existing one. As a result, the former company ceases to operate as an independent business entity. In this case, a deed of transfer is also executed.

Separation

Reorganization of a legal entity can be carried out by forming several from one company. In this case, the former enterprise ceases its activities, and the duties and rights that it possessed pass to the newly formed companies. Their distribution is carried out in accordance with the separation balance sheet. The newly formed legal entities act as universal successors.

Selection

Such a reorganization of a legal entity involves the withdrawal of one or more companies from the enterprise. Upon allocation to each new entity, responsibilities and rights are transferred according to the separation balance sheet. The peculiarity of this procedure is that the former company does not stop its activities. Dedicated enterprises become their usual successors.

Conversion

It involves changes in the legal structure of a legal entity. In the process, the existing company ceases to operate, and a new enterprise appears in its place. To the last pass on the deed of transfer of the duties and rights of a previously operating corporation.Thus, the new company is the universal successor of the former.

Documents

To begin the procedure, you must collect a package of required securities. These include:

1. Sv-o about the state registration of the company.
2. Certificate of registration with the tax office.
3. Extract from the register.
4. Charter.
5. Copies of TIN and passport of the head.

This list applies to all entities that participate in the procedure.

Legal entity reorganization procedure

The procedure is carried out in several stages:

1. Decision-making.
2. Notification of the tax service three days before the expected start date of the procedure.
3. FMS, FSS and PF notification.
4. Receiving St.-va about the beginning of the procedure.
5. Publication of the message in the official publication (in the State Registration Bulletin).
6. Transfer of documentation to the authorized body that carries out registration and registration.

The procedure for the reorganization of a legal entity requires knowledge of the specifics of the law. When carrying out the procedure, it is important that the requirements of regulatory acts are complied with. In particular, this concerns the adoption and execution of a decision on reorganization. The whole procedure takes an average of 3-5 months.

Process specifics

Succession acts as a mandatory element that characterizes the reorganization of a legal entity. This property allows you to distinguish it from the procedure for the complete cessation of the company. The law directly points to this feature in Art. 61, paragraph 1 of the Civil Code. In legal publications, reorganization is defined as the relative termination of a company. At the same time, its property mass is maintained for functioning within the framework of civil turnover, and its duties and rights are transferred to other entities.

Ways to stop the enterprise

Reorganization and liquidation of a legal entity differ not only in legal consequences, but also in the nature of the process. In legal publications it is noted that companies cease their activities according to the rules similar to those that apply when they are created. In science, there are voluntary and administrative grounds for liquidation. However, there is no direct dependence of the method of creation on the method of termination of activity today. Simply put, it is not necessary that the liquidation of a voluntary company will also take place. The termination of its activities may be carried out in a regulatory manner.

Voluntary method

Liquidation in a normative and explicit way takes place when a decision is made at a general meeting of the founders or by an authorized body of the company. The following shall serve as grounds for termination of activity in such cases:

1. Expiration of the period for which the company was formed.
2. Achieving the goal in accordance with which it was created.
3. Invalidation of the registration of a company in court in connection with violations committed during its formation, if they can be eliminated.

The specificity of the normative-explicit method is that the decision of the founders or the authorized body of the legal entity acts as a sufficient and only basis for liquidation.

Regulatory way

In this case, the decision on liquidation is made by the court. The grounds for such an act are:

• The activities of the company without the necessary permits.
• Fulfillment of work prohibited by law / provision of services not provided for by regulatory enactments.
• The systematic implementation by a charity or other foundation, religious or public association of activities contrary to the Charter.
• Work with gross violations of law.
• Other cases provided by law.

Procedure

Liquidation is carried out as follows:

1. Participants who have made the appropriate decision shall, by prior agreement with the registering authority, form an authorized commission.They also establish the timing and procedure for the termination of the company.
2. The liquidation commission shall place a notice in the official publications on the commencement of the procedure. The publication indicates the time and procedure in accordance with which lenders can declare their claims. Along with this, the liquidation commission is obliged to take measures to identify persons to whom the company has obligations. She informs creditors in writing of the upcoming procedure. After the end of the period during which they can present their claims, a liquidation interim balance sheet is drawn up. It contains data on the property composition of the company. It also provides a list of claims of well-known creditors, the results of their consideration. Liquidation balance sheet Approved by the participants of the enterprise or by the body that made the decision to start the procedure, and agreed with the registration service.

Debt payments to creditors are carried out by the commission in the order of their priority. It is set in Art. 64 GK.