Liquidated LLC with 2 foreign participants - legal entities without applying to the Government Commission and departmental structures
CPO Group lawyers liquidated a company with 2 participants in record time (3 months) without appealing to the Government Commission and departmental structures
A Russian company (LLC) with two participants from an unfriendly state was under the subscription support of CPO Group. After sanctions were imposed, the LLC suspended its advertising activities as the company was no longer profitable. CPO Group lawyers were tasked to liquidate the company in a short period of time with cost optimization.
What was the complexity of the case?
Starting from 2022, the Decree of the President of the Russian Federation dated 08.09.2022 No. "On the Special Procedure for Execution (Execution) of Certain Types of Transactions (Operations) between Certain Persons" has been enacted. The Decree establishes a special procedure for the execution of transactions that directly and/or indirectly establish, change or terminate the rights of ownership, use and/or disposal of shares in authorized capitals if one of the participants is an organization from a hostile foreign state.
The list of such transactions, for which authorization of the Government Commission is required, is given in paragraph 10 of the letter of the Ministry of Finance of the Russian Federation No. 05-06-14RM/99138 dated 13.10.2022.
Thus, all transactions related to changes in the size of shares or termination of ownership of shares are subject to approval by the Government Commission or departmental structures of the Government Commission.
It should be noted that applying to the Government Commission or its departmental structures to obtain authorization for liquidation significantly complicates and delays the process. The procedure in this case may take at least six months, which is not in the interests of the client, who needs to liquidate the company in a short period of time.
In addition, the company had a number of problems related to the existence of accounting debts to the tax authority, which also significantly delayed the situation.
Our actions and results
CPO Group lawyers had the task to liquidate the company in the shortest possible time, provided that two foreign legal entities from a hostile state participated in the company, while eliminating accounting debts.
Having analyzed the situation, legislative acts, constituent and financial documents of the client, the lawyers came to the conclusion that directly in the regulatory acts the liquidation of the company is not specified among the transactions for which it is necessary to obtain permission.
Consequently, if the rules of law are correctly interpreted and the provisions relating to the further withdrawal and distribution of the company's assets among the participants are correlated, it is possible to liquidate the company without obtaining authorization from the Government Commission.
The lawyers took the following actions:
As a result of this work, the lawyers of CPO Group were able to liquidate a company with 2 foreign participants in record time, namely in 3 months and 8 days, without appealing to the Government Commission and departmental structures.
Let's finish this article with a recommendation for business. Apply only to trusted specialists who will be able to competently analyze the documents and offer a solution to the issue, which is maximally aimed at ensuring your interests.
Having analyzed the situation, legislative acts, constituent and financial documents of the client, the lawyers came to the conclusion that directly in the regulatory acts the liquidation of the company is not specified among the transactions for which it is necessary to obtain permission.
Consequently, if the rules of law are correctly interpreted and the provisions relating to the further withdrawal and distribution of the company's assets among the participants are correlated, it is possible to liquidate the company without obtaining authorization from the Government Commission.
The lawyers took the following actions:
- promptly engaged an accountant to resolve the issue of eliminating accounting debts;
- approved the interim liquidation balance sheet of the company;
- paid a fine on behalf of the client for violation of tax legislation;
- organized the collection and filing of documents for liquidation.
As a result of this work, the lawyers of CPO Group were able to liquidate a company with 2 foreign participants in record time, namely in 3 months and 8 days, without appealing to the Government Commission and departmental structures.
Let's finish this article with a recommendation for business. Apply only to trusted specialists who will be able to competently analyze the documents and offer a solution to the issue, which is maximally aimed at ensuring your interests.
