LIQUIDATION
When an investment is no longer profitable it may be reasonable to abandon it and owners may decide to terminate the company. With this regard the law provides for the procedure of liquidation of companies and finalization of business activities.
The liquidation procedure is time-consuming process that takes at least 7-8 months and consists of the following stages:
1) Owners make the decision with regard to liquidation and appoint liquidators. At least one of the liquidators should be resident in Estonia. After adopting the decision only the actions necessary for liquidation can be taken.
2) Notarized application for liquidation and appointing liquidators signed by the member of the management board (with the right of signature) and the liquidator(s) shall be submitted to the Commercial Register.
3) The liquidation notification is published in the State Gazette and is sent out to the known creditors.
4) Within 3 months after adopting the decision the initial liquidation balance is prepared along with an explanatory report and an annual report that are approved by the decision of the competent authority and then submitted to the Commercial Register.
5) After 4 months since publication of the notification in the State Gazette and after the demands of creditors are satisfied* the final liquidation balance and the plan for distribution of remaining property are prepared and provided to the owners.
6) After liquidation is finished (but not earlier than within 6 months after registration of liquidation in the Commercial Register and publication of notification and within 3 months after the final liquidation balance and the plan for distribution of remaining property are prepared and provided to the owners) the liquidator submits to the Register the notarized application for removal of the company from the Register.
Drafting the initial and the final balance is not included in the liquidation service (usually, this is done by the customer’s accountant).
* Where the sum of the demands of creditors exceeds the value of the company’s property, in order to satisfy these demands, the liquidator immediately files bankruptcy application along with explanation of financial inability and the list of creditors.
Experts responsible for provision of this service:
Leonid Ageev, partner, email
Valentin Feklistov, lawyer, email
Jana Kolpakova, lawyer’s assistant, email