Liquidation of a company is a procedure that allows you to completely exclude a company from the Commercial register, if there is enough property to meet all of the creditors’ claims. In this article we will discuss the main stages of the liquidation of a company in Estonia.
1. Beginning of the liquidation process of a privat limited company (PLC).
To start the process of liquidation of PLC, its shareholder(s) must hold a meeting and make an appropriate decision, the point of which is liquidation of the company, start of the liquidation procedure, and the appointment of liquidator(s). At least one liquidator needs to be an Estonian resident.
The decision to liquidate the company is registered in the Commercial Register. After that, liquidator publishes a notice of company liquidation in Ametlikud Teadaanded, in which the liquidator informs possible creditors about the need to present their claims to the PLC. In the case of a insufficiency of the company’s property in order to meet all creditors’ claims, the liquidator must file for bankruptcy.
If the company shares are registered in the Central Register of Securities of Estonia (Eesti väärtpaberite keskregister), then this register should be informed about the liquidation procedure.
With the decision on the liquidation of the PLC, the economic year of the PLC is considered to be finished. Within three months after the decision is made, it is necessary to compile the initial liquidation balance sheet and submit it to the Commercial Register.
2. Presentation and satisfaction of requirements.
At this stage, the creditors must notify the liquidator about all their claims to PLC. Claims must be submitted within four months from the date of publication of the notice.
3. Final balance and division of property.
After satisfying creditors’ claims, the liquidator composes the final balance sheet and the distribution plan for the remaining property. If needed, the final report must be reviewed by an auditor. The property remaining after the satisfaction of all claims of creditors, shall be distributed among shareholders in accordance with the property distribution plan drawn up by the liquidator.
After the distribution of the property, it is necessary to close all bank accounts opened in the name of the company.
4. Deleting the company from the Commercial Register.
At the end of the liquidation procedure, an application is submitted to the Commercial Register to delete the PLC from the register. Along with the statement, liqudator must submit a final balance sheet and distribution plan.
According to the time frame defined by law, the liquidation can take up to 9 months. However, in practice it often lasts much longer. All depends on the conditions of each individual situation.