Company dissolution in Ukraine is one of our main specializations. The lawyers of “Capital Law Consulting” have significant experience and qualifications in the Ukraine company liquidation process. We are ready to offer full legal support if you need to close a business in Ukraine. Over the past 10 years we have successfully carried out liquidation (dissolution) and bankruptcy procedures for more than 100 companies, branch offices, and representative offices of foreign companies in Ukraine.
We provide comprehensive legal and audit services in Ukraine:
- closure of a company or business by the owners/shareholders decision;
- liquidation of a branch office;
- liquidation of a representative office or branch of a foreign company;
- dissolution of a sole proprietorship (FOP);
- litigation and mediation during the liquidation process;
- bankruptcy services;
- trustee in bankruptcy proceedings;
- liquidator services;
Stages and procedure of company dissolution in Ukraine
Frankly speaking, dissolution is a much more difficult process than company formation in Ukraine. This is the way of limited liability company (LLC) closure in Ukraine when the business has little to no debts and obligations. Business liquidation in Ukraine is also possible if a company has enough assets to pay all its debts. If the company owes significant debt (more than 1 260 000 UAH in 2019) liquidation is virtually impossible. In such case bankruptcy proceedings are to be initiated.
- Convocation of general meeting of shareholders/owners and liquidation minutes approval. More than 75 % of shareholder votes are needed to initiate a company liquidation process in Ukraine. Once initiated, a deadline of at least two months must be set for all the Ukrainian company’s creditors to make claims as to how much the company owes them. A liquidator (or dissolution manager) or liquidation committee must be appointed. By Ukrainian law, the company director (CEO) can be appointed as company liquidator. A liquidation agreement is not needed, but it is recommended that one be drafted and signed as usually the liquidator’s powers are not defined by statute. If the company has branches and/or representative offices, the general meeting of shareholders should consider the issue of their liquidation. The dissolution manager also has the right to make payments and take control of the company’s assets. Although the power of the liquidator can be limited by shareholders. Ukrainian dissolution law is not so strict in regard to liquidators’ roles and responsibilities.
- Filing of documents to the state registrar and commencement of the liquidation procedure. At this stage Ukrainian authorities shall be informed that a company is to be dissolved. After the start of the liquidation process, the enterprise is not automatically deprived of its VAT payer status and/or the single (fixed) tax, license rights, etc. At this stage of liquidation company can still carry out financial and economic activity.
- Company audit by tax authorities. To close a business in Ukraine, one must pass an audit by the tax and fiscal authorities. This is the longest and most difficult phase. The company’s asset allocation and dividend payout must be conducted during this phase or earlier. Company dissolution in Ukraine is possible only if such business can prove they have no debts to state authorities, employees and other businesses. So liquidation of company in Ukraine is possible only if there are no obligations and debts. Tax officials will check that all types of taxes that have been properly paid, including corporate tax, value added tax, individual profit tax, social security tax, and others. This tax audit may only check the company’s activity for the past 3 fiscal years. Consider also that soon after the audit is complete the company must not engage in any further activity and close all its bank accounts.
- Submit all employee documents to the employee archive. Documents must be submitted to the archival institution for all employees for the entire period of the company’s activity (copies of passports and identification codes, copies of orders for appointment and/or employment contracts, copies of employment record book). This stage takes only a few days to complete. But it is a must to submit all the needed documents about each and every employee.
- Approval and signing of statement of liquidation and final balance sheet. A statement shall be prepared by the liquidator declaring that the company has no debts nor claims against it. This document shall then be signed and notarized by an official notary.
- Filing of documents on liquidation of the enterprise to the state registrar. This is the final stage. As of the liquidation date, the legal entity should not have any assets and/or debts, as shown by the statement of liquidation described above. Consider that if some debts arise due to the tax audit, this stage can’t be completed.
Dissolution of a Ukrainian company does not remove the business entity from the unified state register of legal entities and sole proprietors of Ukraine, as this register maintains records about all company formations and dissolutions for the past 75 years.
Unfortunately, as of 2019, Ukraine is very lowly ranked in the resolving insolvency category by the World Bank Doing business index. But our lawyers have a proven track record of protecting the rights of creditors.
Immediate Ukraine company closure
In case you want to get rid of Ukrainian company immediately, we do offer a solution that will allow you to dissolve your company right away. However, this strategy work only if a company doesn’t have proven debts. The solution is to sell the shares to third parties and to change company manager and official address of registration. It is not official company closure procedure, but if you will no longer be a shareholder or/and director, you will not have to worry about further company existence and statements. We do have people in Ukraine, that are ready and willing to purchase such companies.
Probably, this is the best legal solution in case the company was registered in order to participate in some certain project that has failed.