The liquidation is a procedure that shall be opened only for companies. A liquidation procedure is not conducted upon termination of the activity of sole proprietors and in case of transformation of the company or a bankruptcy. The termination of a company is a prerequisite for opening of a liquidation procedure.
The purpose of the liquidation is to cash all company assets, to finish any current contracts, i.e. to exercise the right and fulfil the obligations arising out of them, to collect all dues, to pay all the creditors, and the rest of the assets to be divided between the associates/shareholders.
The authorities that define the period for liquidation, appoint liquidators and define their remuneration are the General Assembly of the Limited Liability Company or of the Joint-Stock Company, and for all other type of companies - the mutual consent of the unlimited liability partners.
The liquidators shall be entered in the Trade Register where they shall present notarized consents with specimens of their signatures. The liquidators represent the company and are entitled with rights and obligations by its managing authority. When two or more liquidators are appointed, they can represent the company together only. For their liquidation activities, the liquidators bear the same responsibility as the managers or other managing authorities of the company.
The liquidators are obliged to invite the new creditors and to file their claims upon announcing the termination of the company. The invitation shall be made in written to the known creditors and shall be registered in the Trade Register. After this, a six-month period starts during which the creditors can file their claims. The company cannot be deleted from the register before the expiry of this six-month period.
The liquidators are obliged to finish the current deals, to collect the takings, to cash the rest of the assets and to pay to the creditors. They can conclude new deals only if such are needed for the liquidation.
The liquidators are required to notify the National Revenue Agency for the liquidation started.
The liquidators shall prepare a liquidation balance as of the moment of company's termination and a report that clarifies the balance. At the end of every year, they shall prepare an annual closure of the accounts and submit an annual financial statement for their activity before the Managing Authority.
The assets that remain after the payment to the creditors shall be distributed between the associates and the shareholders respectively. The distribution can be done after the expiry of the six-month period from the announcement of the invitation to the creditors in the Trade Register.
The liquidators are entitled to request the deletion of the company when all debts are paid off and the rest of the assets are distributed. After its deletion from the Trade Register, the company shall not exist as a legal entity.