Among the variety of services in the accounting, business and legal fields BULADVICE can also assist if you decide to wind up your company. The process of liquidation requires specific knowledge in accounting and legal fiеld. Our experts from BULADVICE can take care of all the details, so don’t have to worry about.
Here are the main things you need to know when liquidating a company:
Liquidation of a limited company, also known as winding up, is the process of bringing the company’s affairs to an end. The process of liquidation a company includes: realizing its assets, paying off its debts, and distributing any remaining funds or assets to the company’s shareholders or creditors. This can happen voluntarily, when the company’s shareholders or directors decide to liquidate the company.
The liquidation process can be complex and time-consuming, involving legal and accounting professionals, and it’s important to seek professional advice before embarking on this process.If you want to start the liquidation process of a limited company in Bulgaria, there are several steps you need to follow:
• Hold a Shareholders Meeting: The first step is to hold a shareholder’s meeting and pass a resolution to liquidate the company. The resolution should be passed by a majority of the shareholders, and the company’s articles of association should specify the required quorum and majority for this decision.
• Appoint a Liquidator: The shareholders must appoint a liquidator who will be responsible for managing the liquidation process.
• Register the Liquidation: There is legal obligation for the company once the liquidator is appointed, to register the liquidation with the Commercial register and register of non-profit legal entities. This involves submitting an application form and the necessary documents, including the resolution to liquidate the company and the appointment of the liquidator.
• Invitation to the Creditors: The liquidator must notify all creditors of the company and invite them to submit their claims against the company. This invitation must be submitted to the Commercial register and register of non-profit legal entities also. It is very important since the invitation is published the minimal six months term for the liquidation process to be over starts to run.
• Collect and Sell Assets: The liquidator must collect and sell the company’s assets and use the proceeds to pay off its debts in a specific order of priority.
• File Final Accounts: The liquidator must file final accounts and submitted to the Commercial register and register of non-profit legal entities. Due to the many specifics in preparing the final accounts we highly suggest seeking professional advice from an accountant and a lawyer who specializes in Bulgarian corporate law to ensure that you comply with all the legal requirements and avoid any potential liabilities.
Here are several of the most common potential risks and complications that could arise during the liquidation of a limited company. Some of these include:
• Disagreements among Shareholders: If the shareholders do not agree on the liquidation process, it can delay the liquidation and result in additional costs and expenses.
• Legal and Regulatory Compliance: There are several legal and regulatory requirements that must be followed during the liquidation process, and failure to comply with these requirements can result in fines, penalties, and legal disputes.
• Insufficient Funds: If the company does not have enough funds to pay off its debts, the liquidator may need to sell assets at a loss, which could result in lower returns for shareholders.
• Creditor Disputes: Creditors may dispute the liquidator’s decisions or file legal claims against the company, which could delay the liquidation process and increase costs.
• Tax Liabilities: The liquidation process may trigger tax liabilities for the company or its shareholders, which could result in additional costs and expenses.
To minimize all these risks and complications, it’s important to seek professional advice. BULADVICE is team of accounts and lawyer with more than 10 years of experience who specializes in Bulgarian corporate law and have experience in liquidating companies. We can help you navigate the legal and regulatory requirements, identify potential risks, and develop a strategy for achieving the best possible outcome for the company and its stakeholders.