Dissolution
Bankruptcy - Voluntary and Involuntary
Liquidation - Reorganization
Liquidation through Offshore
Alternative Liquidation
Legal and practical types and procedures for closing an organization
Opening your own firm is quite easy, but the process of closing a firm is legally more complicated and carries numerous risks. The larger the scale of the company, the more difficult it is to cease its operations. Therefore, the services offered relate to the procedures through which it will be possible to close an LLC or JSC.
Specifically, the proposed options allow
• To legally liquidate and get rid of a non-profitable firm
• To avoid further obligations and interest increases
• To carry out the closure process safely and confidentially, avoiding further risks
Standard process. Company dissolution.
The usual path for closing or dissolving a company is quite a lengthy process, lasting 4-9 months, and requires going through a series of procedures:
It is important to know: If the value of the assets of the dissolving legal entity is insufficient to satisfy the claims of creditors, it can only be dissolved as a result of bankruptcy:
The founders (participants) of the legal entity that has decided to dissolve are obliged to immediately inform the body conducting the state registration of legal entities, which records information in the state register of legal entities about the dissolution process of that legal entity. The founders (participants) of the legal entity that has decided to dissolve appoint a liquidation commission (liquidator) and, in accordance with this code, determine the procedure and deadlines for dissolution. From the moment of appointment, the powers of managing the affairs of the legal entity pass to the liquidation commission. The liquidation commission represents the dissolving legal entity in court:
The liquidation commission publishes a notice on the official internet site of public notifications of the Republic of Armenia at [link: http://www.azdarar.am] http://www.azdarar.am regarding its dissolution and the procedure and deadline for creditors to submit their claims. This deadline cannot be less than two months from the moment of publication about the dissolution.
The liquidation commission takes measures to identify creditors and collect receivables, as well as informs creditors about the dissolution of the legal entity.
After the deadline for creditors to submit claims, the liquidation 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 the consideration of the claims.
The interim balance sheet is approved by the founders (participants) of the legal entity that has decided to dissolve or by the body authorized for this purpose by the charter of the legal entity.
If the cash resources of the dissolving legal entity are insufficient to satisfy the claims of creditors, the liquidation commission sells the assets of the legal entity through public auctions in accordance with the procedure established by law on public auctions.
The liquidation commission pays creditors in the order established by Article 70 of the Civil Code, in accordance with the interim balance sheet, starting from the date of its approval.
After settling accounts with creditors, the liquidation commission prepares a liquidation balance sheet, which is approved by the founders (participants) of the legal entity that has decided to dissolve or by the body authorized for this purpose by the charter of the legal entity. The approved liquidation balance sheet is submitted by the liquidation commission to the body conducting the state registration of legal entities.
After satisfying the claims of creditors, the remaining assets of the legal entity are handed over to its founders (participants), unless otherwise provided by law, other legal acts, or the charter of the legal entity.
The legal entity is considered dissolved, and its existence ceases from the moment of state registration.
Dissolution of the company through bankruptcy.
If the firm already has existing debts, voluntary bankruptcy can also be considered, which will allow avoiding seizures and involuntary bankruptcy, thus making the process of closing the company more manageable:
With the dissolution of the legal entity, its activities cease without the rights and obligations being transferred to other persons in succession. Article 67 of the Civil Code of the Republic of Armenia:
In general, in this case, there are two options for closing the company: Voluntary and Involuntary
Involuntary closure is carried out through the involuntary dissolution of the company based on the relevant court decision if there have been unacceptable errors in the registration of the company (in case the court declares the registration of the legal entity invalid due to violations of the law committed at the time of its creation), if the activities of the company contradict current legislation (conducting activities without permission (license) or prohibited by law, multiple or gross violations of the law or other legal acts, regularly conducting activities contrary to the statutory purposes by a public association or foundation, as well as in other cases provided for by this code), or if the firm has obligations that have become impossible to fulfill or settle debts.
The need to dissolve the company may be due to the desire to start business activities from a "clean slate".
In the case of voluntary bankruptcy, the owner takes measures to get rid of the company that no longer operates.
Liquidation, concept and types.
The liquidation of a company, or the process of closing (dissolving) the company, is most in demand when the company is no longer profitable and its further activities have become impractical. As a result of the process, data regarding the closure of the company is entered into the state register of legal entities. The company ceases to exist.
The types of liquidation offered are three
1. Alternative dissolution - reorganization
2. Closing the company through offshore
3. Alternative liquidation - through a third party
Alternative dissolution options for the firm or alternative liquidation of LLCs, JSCs, and other forms of companies
There are alternative options for the dissolution of the company, such as the reorganization of the company through merger or consolidation. As a result of such reorganization, its rights and obligations are transferred to the successor company:
In the case of the merger of legal entities, the rights and obligations of each of them are transferred to the newly formed legal entity in accordance with the transfer act:
In the case of the joining of one legal entity to another, the rights and obligations of the joined legal entity are transferred to the latter in accordance with the transfer act:
Closing the company through offshore.
The liquidation of the company through offshore is a legal and safe way to close the company - LLC, JSC, etc.
Currently, one of the easiest options for dissolving a company is its liquidation through offshore by selling it to an offshore company. The participants of the existing company exit, and the offshore company acts as a new participant. The process can be carried out either at once or in stages. In the phased option, the offshore company becomes the owner of 20 percent of the shares of the existing company, which is done by increasing the statutory capital of the company and acquiring that 20 percent by the offshore organization. Then, the participants or participant of the dissolving company sell their shares to the offshore company. The director of the company closes the company's account and, based on his application or the decision of the new owner, is relieved of his position, and a representative of the offshore company, who does not have Armenian citizenship, is appointed as the new director. All documents of the company are amended accordingly.
The liquidation of the company through offshore has several advantages, the primary one being its speed, which usually does not exceed 1 to 2 months. In this way, it is possible to close the company without preparing accounting documents and without unnecessary processes.
Cost of services.
The cost of services is formed from the fees necessary for the notarized translation of documents, the fees required for changes in the charter and other documents in the state register, and the legal service fee, which is calculated taking into account the specifics of the particular case. It should be noted that closing the company in this way can often be more advantageous financially as well.
Closing the company through the transfer of shares or stocks to a third party or alternative liquidation of LLCs, JSCs, and other forms of companies.
Another way of accelerated dissolution of the company is the transfer of shares or stocks to a third party who is not a citizen of Armenia (non-resident). When the shareholders or participants of the existing firm want to "get rid of an unwanted firm" as quickly as possible, this option is also popular. The non-resident also occupies the position of the company's director. However, it should be noted that although this method of dissolution is the fastest in terms of time, it is also quite costly compared to other options.
There are also other options for closing the company, about which relevant information can be obtained by contacting AYLEX Law Office. We guarantee confidentiality and the widest possible range of services in this field.