Liquidation of a company is a complex but strictly regulated process for voluntarily closing a business entity and removing it from the Central Registry of the Republic of North Macedonia. This process involves the termination of the company’s existence as a legal entity, but only after settling all obligations to creditors, employees, and the state.
What does liquidation mean, and when is it necessary?
Company liquidation is necessary when the owners or partners decide to close the business. This can happen for various reasons:
- Expiration of the company’s duration as specified in the founding agreement.
- A decision by the partners to cease business operations.
- Structural changes, such as mergers, acquisitions, or division of the company.
- Financial infeasibility when the business is no longer profitable, despite having no outstanding debts.
- A court decision in the case of legal disputes.
- The founding agreement may include additional reasons for liquidation, such as achieving a specific goal or the occurrence of certain circumstances.
Difference between liquidation and bankruptcy
There is often confusion between the terms “liquidation” and “bankruptcy.” It is crucial to distinguish between these two processes:
- Liquidation: A voluntary process for closing a company. The company has no debts, and all obligations are fully settled before closure.
- Bankruptcy: An involuntary closure of a company that is insolvent or over-indebted. This process is carried out through court intervention.
- Liquidation is a voluntary and controlled process, while bankruptcy is forced and occurs due to the company’s inability to meet its obligations.
The liquidation process
The liquidation process involves several phases:
-
First phase of the liquidation process
Decision to liquidate
The decision to liquidate is made at a shareholders’ meeting with at least a three-fourths majority vote. This decision must be documented and submitted to the Central Registry. -
Appointment of a liquidator
The liquidator is responsible for conducting the process. Their role includes:
-
Completing ongoing transactions.
Collecting receivables.
Settling obligations to creditors.
Monetizing the company’s assets.
Registry entry
After the decision to cease operations, the company is registered as “in liquidation.” The company’s name is updated to include this designation. -
Public notice to creditors
The liquidator must issue a notice to all creditors to file their claims. This notice is published in the official gazette or other official channels, and known creditors are notified in writing.
-
Settling obligations
All financial and legal obligations of the company must be settled. Any remaining assets are distributed among the partners as per the founding agreement.
Second phase of the liquidation process
After the creditor notice period expires, and following the completion of all obligations in the first phase, the liquidator submits a request to delete the company from the Central Registry. This marks the end of the company’s existence.
Required documentation for liquidation
The following documents are required for successful liquidation:
- A liquidation decision signed by all partners.
- A certificate from the Public Revenue Office confirming the tax status.
- A certificate from the Customs Administration for settled duties.
- Bank statements confirming account status.
- Final financial statements for the last three years.
Liquidator’s responsibilities
The liquidator is personally liable with their entire property for damages caused during the liquidation process. Their responsibility is to ensure that all obligations are fully met before submitting the deletion request.
Closing arguments
Liquidation is a serious process requiring detailed planning and professional management. Consulting a legal expert or a law firm experienced in this field is essential to ensure the process is successfully carried out. If you are considering liquidating your company, it is important to understand all obligations and legal implications.
