LIQUIDATION OF LIMITED LIABILITY COMPANY (LLC) IN SERBIA – Law Office Knezevic Belgrade
As a part of corporate law, Law Office Knezevic in Belgrade represents its clients throughout the liquidation procedure before the Business Registers Agency, which includes preparation of all acts necessary for conducting the liquidation procedure, filing relevant registration applications to the Business Registers Agency, as well as all other actions aimed at lawful implementation of the liquidation process.
According to the Serbian regulations, a liquidation of the company may be voluntary and forced. A company can be put into liquidation voluntarily if case that it is solvent i.e. that it has sufficient means to fully settle its obligations to creditors. On the other hand, forced liquidation is ex officio initiated by the Business Registers Agency in the cases provided by the law.
The company in liquidation in Serbia has to carry out three steps before the Business Registers Agency in order to fully perform a liquidation process.
Step 1: Starting of procedure of liquidation of limited liability company in Serbia – Attorneys in Law in Belgrade
The first step in order to start the liquidation procedure is submission of application for registration of liquidation (winding-up) procedures along with decision to start a liquidation procedure that should be taken by the shareholder(s) of the limited liability company (LLC).
Liquidation manager of the limited liability company in liquidation in Serbia
In its decision to start the liquidation procedure the company appoints a liquidation manager. Representation rights of all representatives (directors) of the company are terminated with the appointment of a liquidation manager. It is very important to note that if the company fails to appoint a liquidator, all legal representatives of the company automatically become liquidators and are registered ex officio.
The company may appoint several liquidators to jointly represent the company, unless specified otherwise in the decision on their appointment.
Any natural or legal person may be appointed as a liquidator (including company shareholders and/or representatives).
Deadlines in liquidation procedure of limited liability company (LLC) in Serbia– Attorneys in Law in Belgrade
Company liquidation starts as of the date of registration of the decision to liquidate the company and date of publication of the notice of liquidation.
The notice is posted on the Serbian Business Registers Agency’s website for a period of 90 days, and the creditors may register their claims no later than 30 days after the date of expiry of the notice period. Consequently, the application for strike-off of the company after the completion of the liquidation procedure may not be submitted prior to the expiry of a 120 day period from the date of publication of the notice (i.e. the date of adoption of the Registrar’s decision to register the instigation of a liquidation procedure).
Notice to the creditors in liquidation procedure of limited liability company (LLC) in Serbia – Attorneys in Law in Belgrade
In addition to publishing a notice of liquidation to inform any unknown creditors about this procedure, the liquidation manager is also required to send a written notice of liquidation to all known creditors, within 15 days from the date of instigation of the liquidation procedure, at the latest.
Mailing address of the company in liquidation in Serbia
If, the company changes its seat or mailing address during the period of publication of the liquidation notice, that 90-day period begins to run anew starting from the date of registration of the change.
Step 2: Application for registration of an initial liquidation report and annual liquidation report – Attorneys in Law in Belgrade
As a second step of liquidation of LLC in Serbia the company has to register an initial liquidation report and annual liquidation report (if applicable) along with decision on adoption of initial (and annual if applicable) liquidation report.
Please note that if the liquidation procedure takes more than a year, i.e. if the end of the business year occurs in the course of the procedure, the liquidator is required to submit an annual liquidation report to the shareholder(s) of the company, within three months from the end of each business year at the latest. The annual liquidation reports must be registered.
A liquidation manager is required to file an initial liquidation report (a minimum of 90, and a maximum of 120 days from the date of commencement of liquidation), which he then submits to shareholder(s) (within the same term).
The general assembly has to adopt an initial liquidation report within 30 days from the date it was submitted for adoption. An application for registration of the initial or annual liquidation report must be accompanied by a decision of the general meeting on its adoption.
An adopted initial liquidation report must contain:
- a list of filed claims,
- a list of accepted claims,
- a list of contested claims with a statement of reasons for contesting the claims,
- information on whether the assets of the company are sufficient for settling all liabilities of the company, including the contested claims,
- necessary actions for conducting the liquidation procedure,
- time envisaged for the completion of the liquidation procedure,
- other facts of relevance for conducting the liquidation procedure.
The liquidation manager cannot submit an application for strike-off of the company earlier than 120 days counting from the date of publication of the notice and before registering the initial liquidation report.
Step 3: Application for strike-off from the Register upon completion of liquidation procedure – Law Office in Belgrade
As a third (and final) step the company should submit an application for strike-off from the Register upon completion of liquidation procedure (strike-off). Along with this application the company has to adopt the following:
- resolution of the general meeting on the completion of the liquidation procedure,
- liquidator’s report on completed liquidation,
- liquidator’s statement to the effect that the company has fully settled its debts to registered creditors, and that there are no outstanding proceedings against the company,
- resolution on the distribution of the liquidation remaining assets,
- company’s resolution entrusting a person with safekeeping the business books and documents or alternatively the liquidator’s declaration stating the name and address of that person.
In order to be deleted from the Register the company has to fulfill outstanding tax obligations the proof of which should also be obtained by the relevant tax authorities and submitted to the Register.
If the company in liquidation is VAT payer it also has to submit a certificate on the deletion of the business entity from the register of VAT payers, and if not, than just a statement by the liquidation manager that company is not a registered VAT payer.
Upon payment to creditors the liquidator prepares the closing liquidation balance sheet as extraordinary balance sheet (a financial statement that has to be registered with the Financial Statements and Solvency Register and is not to be submitted to the Companies Register as an attachment the application for strike-off).
The company may not pass a resolution on completed liquidation before the finalization of all proceedings relating to any outstanding claims against the company and before full settlement of those claims.
Following the completion of the liquidation procedure the company is struck off the Companies Register.
As already mentioned, the liquidation manager may not submit an application for strike-off of the company before the expiry of the term of 120 days counting from the date publication of the notice and before registering the initial liquidation report.
Keeping of the company’s business books and documents
The company’s business books and documents are to be kept in accordance with regulations governing archive materials, and the name and address of the person entrusted with their safekeeping are subject to registration. That person must have residence/seat at the territory of Republic of Serbia.
The assets of a company in liquidation that remain after the settlement of all liabilities (residual assets) shall be distributed to company shareholders in accordance a decision on distribution of residual assets. Unless otherwise provided by Memorandum of Association, the shareholders shall receive distribution according to the share to their equity in the company.
Shareholders who received distributions in good faith in the course of a liquidation procedure shall return any such moneys if necessary to settle the claims of the company’s creditors.