Operating during the current period of economic turmoil is not easy. Many entrepreneurs are struggling with the loss of contractors and a loss of liquidity, which may consequently lead to the need to end their business. Persons acting as a member of the Management Board of sp. z o.o.
who may become liquidators as a result of the opening of the liquidation of the company shall bear the burden of proper liquidation proceedings. The following part of the article answers the question whether the absence of all liabilities affects the possibility of the company being removed from KRS.
Legislator in Content Article 282(1) The Code of Commercial Companies obliged the liquidators of the limited liability company to terminate the current interests of the company, collect claims, meet liabilities and liquidate the company's assets. The possibility of starting new interests can only take place if it is needed to complete pending cases.
On occasion, despite the fulfilment of all its obligations by the liquidators of the economic operator, the registry court refuses to remove the company because all the obligations of the liquidator have not been fulfilled, since the entity still has cash liabilities that have not been regulated. The situation for liquidators and for the company itself seems to be stale, as the state of its finances makes it impossible to take new business steps, the remaining debt to be repaid is too large for an entity that is no longer able to run active business.
The general courts and the Supreme Court have repeatedly examined the situation described above and, of course, each situation must be examined individually, but the Supreme Court succeeded in the order of 5 December 2003 point out that: ‘Where a company in liquidation is not able to conduct business, and this entails new contracts to end old interests, it should be deleted from the register. [...]
Keeping dead operators in business is unjustified, and it may be misleading for other participants in that trade.”[2]
It is well pointed out in the literature that: "(...)With the exhaustion of all the assets, i.e.
the recovery of all claims, the liquidation of all the assets of the company (subject to the fact that it has already been established, the possibility not to remove certain claims and the free liquidation of certain assets) and the fulfilment of liabilities on the basis of the existing assets of the company, including the money from its cash-out, therefore, the liquidation of certain liabilities is terminated.
“Liquors will not be responsible for failing to fulfil their obligations if, in the course of the winding-up proceedings, all the liabilities of the company cannot be fulfilled.
The Supreme Court allows the possibility of ending the liquidation proceedings of a company which was unable to fulfil all its obligations, because it would be pointless to maintain a "dead" entity (post. 18 October 2006, II CSK 136/06, Legalis).’[3]
The liquidation of a limited liability company requires a number of organisational and legal activities, and the efficiency of these activities depends on how quickly the company will be removed from the National Court Register and whether it will be deleted at all. Lawyers from our law firm will assist in the process of winding up a limited liability company from the beginning until the entity is effectively removed from the KRS.
[1] each case needs an individual analysis and legal assessment of the facts
[2] order of the Supreme Court of 5 December 2003, Signature IV CK 256/02
[3] A. Nowacki, Limited Liability Company. Tom II. Comment. Article 227-300 KSH, Warsaw 2021
Written by Michał Pankiewicz, lawyer.