Not always previously established business brings a desired income. Sometimes one has to make a decision to liquidate an organization.
In order for the founders not to face problems with government agencies in the future, it is necessary to execute an LLP de-registration procedure in compliance with all the rules provided for by the legislation.
In the material we will describe what is the procedure and terms for LLP liquidation.
What are the cases when de-registration (liquidation) of LLP may be required?
De-registration (liquidation) of LLP is a process that requires compliance with the legislation as well as with terms stipulated for each stage, and also gathering of documents.
Thus, liquidation carried out pursuant to all the rules will enable founders protecting themselves in the future from problems with government agencies, as well as from various fines.
De-registration may be required in the following cases:
- on an initiative of participants (voluntary);
- under a court decision (compulsorily).
An organization can be liquidated compulsorily if LLP did not timely obtain BIN and did not register with a local State Revenue Department under the Ministry of Finance of the Republic of Kazakhstan as a taxpayer. Also, organizations declared bankrupts by court decisions are subject to compulsory liquidation.
In both cases, all the issues are regulated by the law No. 2198 as of April 17, 1995. In particular, article 16 of the law.
Also, de-registration procedure of LLP is stipulated by the Civil Code (Article 50, CC RK), while fulfillment of tax obligations is stipulated by Article 58 of the Tax Code of the Republic of Kazakhstan.
What are the states of LLP liquidation?
One needs to undergo several stages to liquidate LLP in Kazakhstan:
- making of a decision by an owner (meeting of founders) on a company`s liquidation;
- establishment of liquidation commission;
- notification of employees on forthcoming dismissal at least one month in advance (Article 52, LC of RK);
- notification of Ministry of Justice of RK in written form or via an electronic service using digital signature (Clause 1, Article 50 CC RK);
- notification of State Revenue Department under MF of RK (within 3 working days from the date of making a decision) pursuant to Clause 1 of Article 50 TC RK;
- notification of Employment Center on the forthcoming increase in the number of unemployed at least 2 months in advance;
- public notification on liquidation of a company through announcement in nationwide newspapers with indication of terms (at least 2 months) for complaints acceptance from creditors (Clause 3, Article 50 CC RK);
- upon expiration of 2 months from the moment of an announcement publication: drawing up of interim liquidation balance sheet and liquidation tax return;
- submission of application to State Revenue Department to conduct a tax inspection as well as inspection of tax reports with “liquidation” mark (within 3 days from the date of balance sheet approval);
- undergoing of inspection (initiated by State Revenue Department no later than 20 working days from the date of application obtainment);
- settlement with creditors, payment of tax liabilities, including through selling of property via open tender;
- if there are operations related to foreign economic activity: request to customs authorities for a certificate on the absence of arrears in fees;
- after tax inspection completion: drawing up of final liquidation balance sheet;
- closing LLP accounts in banks;
- de-registration of cash register;
- provision of liquidation balance sheet and statement of closure of accounts to a local branch of State Revenue Department;
- destruction of seal (it is necessary to seal all the documents where it may be required prior to destruction);
- submission of application and documents to NJSC State Corporation "Government for Citizens" at the place of LLP registration (or via e-Gov Portal).
Who is subject to facilitated liquidation procedure?
Besides a standard procedure that involves tax inspection there is also a facilitated one provided for by Article 59 of TX RK.
The facilitated procedure is available for a company which simultaneously:
- does not registered for VAT;
- does not carry out certain types of activities;
- does not apply special regime for agricultural producers;
- was not reorganized previously;
- is not included into tax inspection plan.
Such LLP can avoid liquidation inspection by undergoing only an in-house audit performed by State Revenue Department under MF RK.
Within 10 calendar days from the date of liquidation reports submission to State Revenue Office under MF RK, an organization is obliged to pay all taxes, fees and other payments.
Within 3 working days from the date of an application receipt, the Tax Service requests information from banks, customs authorities, funds. Information is provided within 20 working days. Then the Tax Service has 10 working days to conduct an in-house audit.
Following its completion, the following is provided to LLP:
- statement;
- notification on elimination of identified violations (within 5 working days).
If LLP does not eliminate violations or does not agree with them, in this case a standard tax inspection is initiated. It is appointed no later than 10 working days from the date of note receipt from LLP on disagreement with the results or after expiration of the notice.
The facilitated procedure (in the absence of violations) makes it possible to decrease the period of LLP liquidation for several months.
Which documents should be submitted to NJSC State Corporation "Government for Citizens"?
The following should be submitted for registration of LLP liquidation:
- application on state registration of legal entity liquidation;
- sealed decision of an owner or meeting of founders;
- copy of newspaper with published announcement on LLP liquidation;
- abstract from an organization that destructed an LLP`s seal;
- receipt on the payment of registration fee (small and medium businesses do not need to provide a receipt).
Application is submitted to NJSC State Corporation "Government for Citizens" no earlier than 2 months after publication of announcement on LLP liquidation in newspapers.
Upon receipt of a package of documents on LLP liquidation, Government for Citizens checks whether the procedure was fully observed and then enters the information into the National Register of BIN.
The State Revenue Department under MF RK, in its turn, provides Government for Citizens with information on whether a liquidated LLP has or has not tax debts to the budget.
If there are no violations of the procedure and arrears are absent, then within 5 working days after receiving an application, Government for Citizens registers the fact of a company termination in the register. An LLP is deemed to be liquidated only if information about it is contained in the National Register of BIN.
A former owner receives a copy of order on state registration of legal entity activities termination. A paper copy of document is issued at NJSC State Corporation "Government for Citizens". Also, it can be obtained in electronic form in Personal Account of e-Gov Portal.
If violations are found in the liquidation procedure or there is a tax or customs debt or if there are branches or representative offices of LLP that were not de-registered, a decision will be made to deny state registration of LLP's activities termination.
How to submit documents for liquidation via the Portal?
Package of documents can be submitted to Government for Citizens upon personal visit to NJSC State Corporation "Government for Citizens" or online via e-Gov Portal.
To do this, sign in on the Portal and click the following tabs: “Home”, “For Businesses”, “Registration and Development of Businesses”, “Registration and Liquidation of Businesses”.
Then, select the service “State registration of the termination of the activity of a legal entity, de-registration from the record registration of a branch and representative office”.
Fill in a request, enclose scan copies of documents and make a payment of state duty. Small and medium businesses can obtain the service free-of-charge.
Request processing term on e-Gov Portal: 5 working days.
Service delivery result:
- order on registration of LLP activities termination;