The activity of a legal entity ceases with its dissolution. In the case of dissolution, there is no succession of rights. It is precisely with this in mind that the legislator has provided a special process for the dissolution of a legal entity, which ensures the notification of all creditors and the submission of claims against the legal entity.
The state registration of dissolution is carried out by the staff of the Ministry of Justice of the Republic of Armenia through the Agency of the State Register of Legal Entities (hereinafter referred to as the Agency), except for cases of dissolution of legal entities registered by the Central Bank of Armenia (banks, credit organizations, insurance companies, contractual investment funds, etc.).
If the assets of the dissolving legal entity are insufficient to satisfy all creditor claims, it can only be dissolved through the process of declaring the legal entity bankrupt.
A legal entity can be dissolved by a decision of its founders/participants or the body specified in its charter, including in connection with the purpose for which it was created,
by judicial order, recognizing the registration as invalid, conducting activities without permission or prohibited by law, multiple or gross violations of laws or legal acts, engaging in activities contrary to the statutory purposes by public organizations or foundations, as well as in other cases provided by law.
A legal entity is also dissolved in cases of bankruptcy in accordance with the procedure established by the Law on Bankruptcy.
The body that made the decision on the dissolution of the legal entity is obliged to immediately inform the body registering legal entities (state register), which registers the fact that the legal entity is in the process of dissolution in the state register of legal entities.
The body that made the decision on dissolution appoints a dissolution commission (liquidator) and establishes the procedure and deadlines for dissolution. From that moment, the powers of managing the affairs of the legal entity pass to the commission.
The commission publishes a notice in the press that publishes information about the state registration of legal entities regarding the procedure and deadlines for dissolution and the submission of creditor claims. This period cannot be less than two months from the date of publication.
The commission takes measures to identify creditors and recover receivables.
After the expiration of the deadline for submitting creditor claims, the dissolution commission prepares an interim balance sheet, which contains information about the composition of the assets of the dissolving legal entity, the list of claims submitted by creditors, as well as the results of their consideration. It is approved by the body that made the decision on dissolution.
If the cash resources of the dissolving legal entity are insufficient to satisfy all creditor claims, the commission sells the assets of the legal entity through a public auction.
Article 70 of the Civil Code establishes the order of satisfaction of creditor claims, according to which
first, the claims of creditors secured by the collateral of the assets of the dissolving legal entity are satisfied;
second, the claims of citizens for whom the dissolving legal entity is liable for harm caused to their life or health are satisfied through the capitalization of relevant periodic payments;
third, payments are made for severance benefits, salaries, and remuneration under copyright contracts for persons working under employment contracts;
fourth, the debt for mandatory payments to the budget is settled;
fifth, settlements are made with remaining creditors, except for subordinated creditors;
sixth, settlements are made with subordinated creditors.
The claims of each order are satisfied only after the claims of the previous order have been fully satisfied.
In case of refusal to satisfy creditor claims by the dissolution commission or avoidance of their consideration, until the approval of the balance sheet of the legal entity's dissolution, the creditor has the right to file a lawsuit against the dissolution commission.
After the expiration of the deadline set by the dissolution commission for submitting claims, the claims submitted by the creditor are satisfied from the assets of the dissolved legal entity that remain after satisfying the claims submitted on time.
Claims rejected by the dissolution commission, if the creditor has not filed a lawsuit, as well as claims rejected by the court's decision, are considered extinguished.
In case of refusal to satisfy creditor claims by the dissolution commission or avoidance of their consideration, until the approval of the balance sheet of the legal entity's dissolution, the creditor has the right to file a lawsuit against the dissolution commission.
Claims submitted after the expiration of the deadline set by the commission for submitting claims are satisfied from the assets that remain after satisfying the claims submitted on time.
Claims rejected by the commission, if the creditor has not filed a lawsuit, as well as claims rejected by the court's decision, are considered extinguished.
It is due to the ignorance of these principles established by law that creditor citizens, by not submitting claims to the dissolving legal entity in a timely manner or by not contesting the rejection of the dissolution commission in court, lose the opportunity to receive satisfaction.