The existence of an economic entity can reach a moment when its functioning is no longer justified, for reasons such as lack of economic activity, very low turnover, a reduced interest for the products/services provided by the company, or conflicts between associates or shareholders.

What is the solution?

The company’s associates or shareholders can choose to dissolve, liquidate, and delete the entity. It is a decision often hard to take, and of course, the people involved wish for a simple and fast solution that reduces money and time loss.

Formalities related to company liquidation can be simple or complicated, depending on how well associates/shareholders cooperate when it comes to the distribution of company assets. In many cases, the entity’s representatives opt for voluntary liquidation (without needing to assign a liquidator for the job), an action which can only be performed with the assistance of an accounting expert.

What you need to know about voluntary liquidation

Voluntary liquidation consists of a series of actions whose purpose is to terminate commercial operations taking place at the date when the company is dissolved, to collect company receivables, to transform company goods into money, to pay company debt, and to divide net assets between associates.

The liquidation of trading companies is subject to the general principles stated by Law no.31/1990:

• The legal personality of the company subsists for liquidation needs.
• The liquidation of the company is performed in the interest of the associates.
• The liquidation of the company is compulsory and not optional.

After submitting the application together with the Shareholders General Meeting decision to dissolve and liquidate the company voluntarily, company representatives need to wait for 30 days after publication in the Romanian „Monitorul Oficial” (Official Gazette), a stage which also lasts between two and four weeks. Therefore the voluntary liquidation lasts an average of two months.

What are the steps of voluntary liquidation?

  1. Paying debts to third parties
  2. Recording in the company’s accounting all operations related to the decision to distribute remaining assets
  3. Preparing the balance sheet prior to liquidation
  4. Calculating liquidation-related taxes
  5. Completing the liquidation balance

The dissolution decision represents the process of ceasing activities and opening the procedure of social patrimony liquidation. From the moment when the entity is dissolved, it is no longer possible to undertake new operations; the prohibition is applied from the expiry date of the company or from the date when dissolution was decided by the Shareholders General Meeting or declared by court order. The company maintains its legal personality until all liquidation operations are completed.

Deletion – the last stage

Deletion is the last stage and its consequences are the elimination/deletion of the economic entity from the Trade Register and the definitive loss of legal personality. The following documents need to be submitted to the Trade Register:

  • deletion application
  • the registration certificate and the authentication certificates in original (“certificat de inregistrare” and “certificat constatator” in Romania)
  • the balance sheet prior to the liquidation balance – here are established the distribution of the company assets and the taxes resulting from liquidation
  • the liquidation balance, certified by the Financial Administration, and showing that the company has no debts to the state budget and to social contributions

Voluntary liquidation without the need of a company liquidator (more precisely, called simultaneously dissolution and liquidation according to article 235 of Law 31/1990) is the simplest solution. By choosing this liquidation type you don’t need a liquidator, but you need an accounting expert.

Consulting an accounting expert before starting voluntary liquidation operations is vital. You can benefit from this service by calling to Integrum, and our accounting experts will undertake all the actions needed to complete this stage of your economic entity’s life while also choosing the best solution in terms of tax and accounting.