Liquidation of a non-functioning company - what does it look like?

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The necessity to file the financial statements of a limited liability company via the ICT system made it possible to verify dead entities in business transactions. Let's check what are the reasons for liquidation and the liquidation process of a registered limited liability company, which in fact does not function in the economic course.

From March 15, 2018, in accordance with Art. 9a and art. 19e of the Act on the National Court Register, financial statements and other documents referred to in Art. 69 of the Accounting Act, should be submitted only via the ICT system. As a result, documents are available online almost immediately for every citizen.

No financial statements

Even if the economic departments of the National Court Register are overloaded, the information regarding the lack of reports submitted by the obliged entity will be noticed.

Failure to submit annual financial statements for 2 consecutive financial years triggers court procedures. First, the court calls for the submission of financial statements. If the entity has still not complied with its obligations, the registry court shall initiate ex officio proceedings to dissolve the entity entered in the register without conducting liquidation proceedings. It is worth pointing out that in the course of proceedings for the dissolution of an entity entered in the register without conducting liquidation proceedings, the registry court examines whether this entity has transferable property and whether it actually conducts business.

Initiation of proceedings without conducting liquidation proceedings

Proceedings for dissolution of an entity without liquidation, in accordance with the assumption, are to end with the entity being removed from the National Court Register, which may significantly affect the sense of security in business transactions. Therefore, the entire dissolution procedure must be carried out flawlessly and accurately. Notification of the company by the court about the initiation of proceedings is necessary to conduct proper proceedings to dissolve the company without the liquidation procedure Along with the notification, the registration court is obligated to request the company to provide information that it actually conducts business activity and that it owns property, indicating the company's assets at the same time.

The company should respond within 14 days from the date of delivery of the court summons. At the same time, the court, together with the summons and notification, is obliged to instruct the entity about the consequences of not responding to the court summons.

It is important that the proceedings are initiated ex officio, i.e. that the initiator of the proceedings is not a party - a limited liability company, but a court. Moreover, it is difficult to expect that in a situation where the company does not fulfill its basic obligations, it will “admit” to a mistake and declare itself that it has not submitted financial statements, which may result in a fine. It is necessary to be aware that failure to fulfill the obligation in the form of submitting financial statements may involve the imposition of a fine provided for in the provisions of the Code of Civil Procedure on the enforcement of non-pecuniary benefits.

An exception to the need to notify the company of the initiation of the procedure

It is pointless to inform the company about the initiation of the proceedings if the information contained in the register shows that the company does not have a body authorized to represent or has a current address to which the summons could be delivered.

In such a case, this notice replaces the notice of initiation of the procedure. The said announcement shall be published in Monitor Sądowy i Gospodarczy. In addition, the announcement may also be placed in a journal or in a journal and made public in any other way that the court deems necessary. Regardless of this, the notice of initiation of proceedings should always contain:

  1. name of the registration court conducting the proceedings, name (company) of the entity, entity number in the National Court Register, the last registered office address disclosed in the National Court Register and information on the purpose of the proceedings;

  2. a summons to all persons whose legitimate interest could oppose the dissolution of the entity without conducting liquidation proceedings and its deletion from the National Court Register, to report circumstances against dissolution within 3 months from the date of announcement;

  3. an instruction that if it is found that an entity entered in the National Court Register does not have transferable assets and does not actually conduct business, the registry court may decide to dissolve this entity without conducting liquidation proceedings and order its removal from the National Court Register1.

Liquidation of a non-functioning company - removal from the register

In a situation where the court obliges the company to prove whether the company operates and whether it has assets, the findings in this regard affect the future of the company.

If the registration court determines in the proceedings for the dissolution of an entity entered in the register without conducting liquidation proceedings that the entity does not have transferable property and does not actually conduct business, the registration court decides on the dissolution of the entity without liquidation proceedings and orders its removal from the register. Information on deletion shall be published in Monitor Sądowy i Gospodarczy.

Initiating proceedings ex officio at the request of another entity

There are cases where, despite the fact that the court initiates proceedings for removing the company from the register without conducting the proceedings, third parties inform the court that the company or authorized bodies do not submit financial statements.

Regardless of what such information from third parties is aimed at, if the statutory conditions are met, i.e. the entity does not submit financial statements for two consecutive financial years, the procedure is initiated ex officio anyway. The informing entity is not a party to the proceedings and is not entitled to any means of appeal or evidence.

Discontinuation of the initiated proceedings

If the court is convinced and the submitted material shows that the company has a transferable property or actually conducts business, or if it becomes aware that there are other significant circumstances against the dissolution of this entity without conducting liquidation proceedings, including in particular justified by the interest of the creditor then the initiated proceedings will be discontinued.

Legal basis

  1. Act of August 20, 1997 on the National Court Register, Journal of Laws 2019.1500.

  2. Act of September 29, 1994 on accounting, Journal of Laws 2019.351.

1 Art. 25 b, the Act of August 20, 1997 on the National Court Register, Journal of Laws 2019.1500.

 

Material prepared by the team of "Tak Prawnik".

The owner of the brand "Tak Prawnik" is BZ Group Sp. z o.o