The expedited liquidation procedure is a streamlined process for dissolving companies that meet specific legal criteria, allowing for a swift and cost-effective cessation of business activities. This mechanism was introduced to facilitate the efficient closure of companies under certain conditions.
1. What is the Expedited Liquidation Procedure?
The expedited liquidation procedure is a simplified method for closing companies, enabling the termination of activities within shortened timeframes and with minimal expenses. This mechanism was regulated in the Commercial Act to ensure the effective dissolution of companies that meet specific requirements.
The primary goal of this procedure is to ease the process for companies that:
- Have not conducted business and do not possess significant assets.
- Have no outstanding obligations to the state, creditors, or third parties.
- Meet the legal criteria for liquidation without long-term financial or tax complications.
The expedited liquidation reduces administrative burdens and allows owners to conclude their company’s activities within reasonable timeframes.
2. Conditions for Applying the Expedited Liquidation Procedure
According to amendments in the Commercial Act, for a company to utilize this accelerated procedure, the following six key conditions must be met:
- The company has not conducted business in the last three years: This is evidenced by records from the National Revenue Agency (NRA) and the National Social Security Institute (NSSI).
- No debts or obligations to creditors, the state, or private individuals: This includes the absence of public obligations to the NRA, municipalities, and social security funds.
- Not a party to legal disputes: The company should not be a defendant or plaintiff in ongoing legal proceedings.
- Does not own assets: The company should not have long-term material assets, real estate, or significant financial resources.
- All partners or shareholders agree to the liquidation: The decision to terminate must be unanimously adopted.
- No registered encumbrances or liens on the company’s property: The company should not be burdened with mortgages, pledges, or other encumbrances.
If any of these conditions are not met, the company must undergo the standard liquidation procedure, which is significantly longer and more complex.
3. Main Stages of the Expedited Liquidation
The expedited liquidation procedure includes the following key steps:
3.1. Decision to Dissolve the Company
The owners (partners or shareholders) must unanimously decide to cease operations. This decision is formalized in a protocol that should be notarized.
3.2. Appointment of a Liquidator
According to the law, the company must have a liquidator to manage the liquidation process. Typically, this is the company’s manager, but it can also be another person appointed by the partners’ decision.
3.3. Registration of the Liquidation in the Commercial Register
After the decision to dissolve is made and the liquidator is appointed, the liquidation must be registered in the Commercial Register. This is done by submitting an application to the Registry Agency.
3.4. Announcement of Invitation to Creditors
Even if the company has no known obligations, the law requires the publication of an invitation to creditors in the Commercial Register. This allows potential creditors to file claims.
3.5. Closure of the Company
After the expiration of the period for filing claims and in the absence of objections, the liquidator submits an application for the company’s deletion in the Commercial Register. Upon approval of the application, the company is permanently deleted.
Engaging a commercial law attorney can ensure that all legal requirements are met, and the process is conducted smoothly and efficiently.
