Dissolution of an LLC (Limited Liability Company)
Dissolution of the LLC entails the official removal of the organization from the Unified State Register of Legal Entities upon entering the corresponding record. There are several reasons which lead to a company's dissolution. For instance, if an organization is not operational, the registration authority may initiate its removal from the register in compulsory fashion. The law also requires a company to be dissolved if the amount of its reserve capital has become less than the minimum amount of ten thousand roubles. But the most widespread case is the termination of its operations under the joint decision of its participants.
The dissolution process, whatever the reason for dissolving it may be, takes about six months.
The dissolution process can be divided up into three stages:
- Notification of the registration organ that dissolution procedure has been initiated.
- Publishing a notice in the State Registration Bulletin and the Unified Federal Register of Information on the Facts of the Activities of Legal Entities (“Fedresurs”).
- Notifying the registration organ that the dissolution procedure is complete.
Stage 1: What you need to do is decide on whether to dissolve the company, set the time frame of its dissolution (must be done within one year), and appoint a liquidator or a liquidation commission. The quorum on these issues must always be 100%. All of these details must be reflected in the decision of the sole member or the minutes of the general shareholders meeting. Within 3 business days, a notarized declaration using a P15016 form with an attachment of the decision (minutes) must be sent to the registration office. In the event that no grounds for rejection exist, the registration authority shall make an entry into the USRLE that the LLC is undergoing dissolution within 5 business days.
Stage 2: On this stage, all of your creditors (even if you don't have any) must be informed of the upcoming removal of your company from the register in the duly established fashion. You must write notice texts on the LLC's dissolution (they are practically identical for both resources) and publish them on the State Registration Bulletin or the “Fedresurs” (the “Unified Federal Register of Information on the Facts of the Activities of Legal Entities”). The easiest way to do that is via electronic signature, but it can be done with the help of a notary as well. After publishing the notices, the organization has two months to prepare for the final stage – conclusion of the dissolution.
Stage 3: After the two months have passed, you can inform the registration authority that the procedure is complete. At this stage, it's important to get on top of your accounting: make any necessary reconciliations with contractors, pay off all your debts, and identify and pay for any fines and penalties. It's preferable to request certificates of good standing at a tax office and the Pension Fund of the Russian Federation.
Then, the intermediary dissolution and dissolution balances are written up. These balances are approved by the decisions of the sole member or the minutes of a general shareholders meeting. After that, it's time to notify the registration authority that the intermediary balance has been up as well as notify them of the LLC's dissolution. To do so, you will need to send the corresponding balance and decision (record) of the balance's approval in a P15016 form. We recommend attaching the previously requested certificates to the latter package (on the conclusion of the dissolution procedure).
At this stage, the registration authorities most often issue a decision to suspend state registration to examine the LLC for whether it currently has any debts. That extends the dissolution period by about one month.
If for any reason, the company was not able to complete the procedure within the deadline indicated in the dissolution decision, the registration authority will automatically halt this process and remove the record entered in stage one from the USRLE. Meanwhile, the shareholders of the LLC will only be able to make a repeat decision to dissolve it after a minimum of six months.
If the dissolution period is observed, and everything is fine with the documentation and accounting, the tax inspectorate will enter the record of the LLC’s dissolution into the USRLE.
As a result of dissolving the LLC, you will receive the following documents:
- a dissolution record sheet of the legal entity;
- notices of the legal entity's removal from the tax register.
Have you ever been in a situation in which your company has become non-operational, in other words, it is no longer providing you any income, but it requires monthly or quarterly investments? Looks like it's time to launch the dissolution process. Dissolution isn't all that simple to all on your own. We help evaluate prospects and overcome the red tape from the get-go. In this article, we didn't even get into the land register issues and accounting issues that accompany company dissolution, since those topics each require separate exploration in their own right. Contact our lawyers: we’ll study everything, show you what you need to know, and get you on track!
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