Updated last 18.06.2025
In this section you can find the following information:
- What is termination by liquidation?
- How are the liquidators appointed?
- How is the liquidation accomplished?
- What is fast-track liquidation proceedings?
Most often companies are terminated under the following circumstances:
- By decision of the shareholders;
- In case of accomplishment of the objectives, specified in the articles of incorporation/articles of association, if any;
- Upon the expiration of the period, for which the company was established, if such a period is specified in the articles of incorporation/articles of association;
- In case of bankruptcy;
- In case of termination of the company by Decision of the regional court, due to the performance of unlawful activity or in other cases provided for in the Commercial Act (CA), such as: the company’s activities contravene public order or good morals; the company has been left without a registered manager/managing body for more than 3 months; in the absence of the required minimum capital being contributed within the period provided by law;
- In case of a change in the legal form of the company;
- In case of consolidation, merger, division and spin-off (Transformation of the company).
| Important to know | |
 | No liquidation is carried out in case of a change in the legal form of the company, Transformation of the company and in case of a bankruptcy procedure. In all other cases, a liquidation procedure is necessary. |
What is termination by liquidation?
Termination of a company by liquidation is a situation, where the terminated company still has property, which is not transferred to another company and which should be allocated between the shareholders after the company fulfils all its obligations/liabilities.
It should be noted that the termination by liquidation is not always voluntary– e.g., when the company is terminated by decision of the regional court in cases provided for in the Commercial Law, if there is remaining property, a compulsory liquidation procedure is carried out.
Isolvency procedure is different from liquidation procedure. A insolvency procedure is a judicial procedure, carried out, when a company is overindebted or insolvent. In this case the court appoints a receiver, who manages and represents the company during this procedure. Among the key obligations of the receiver are the preservation and management of Company’s property, so that company’s creditors[1] are satisfied. In this respect, the receiver is provided with extensive powers (art. 658 of the CA).
A liquidation, on the other hand, is an out-of-court procedure, conducted by a liquidator(s). Their main task is to terminate the company’s activities in a regular manner; this includes – settling its current relations, ‘cashing in’ its assets (i.e., converting them into cash), using the money to satisfy all the company’s obligations, and finally, if any assets remain, distributing them among the partners or shareholders. The powers of liquidators are more limited than those of the trustee in bankruptcy.
How are the liquidators appointed?
Liquidators are appointed:
- By the general assembly of the shareholders; In the decision, the following are determined: the name of the liquidator; the start date of the liquidation; his remuneration;
- By the court – at the request of partners/shareholders who hold at least 1/20 of the share capital of the joint-stock company or 1/10 in the case of a limited liability company (OOD); this most often occurs in the absence of consent by the General Meeting;
- By an official of the Registry Agency – when the company has been dissolved by a court decision.
The fees of the liquidator are established by the party who appoints him. Initiation of the liquidation procedure, liquidators are registered with the Commercial Register, as the application for registration has to be accompanied by notarized consents with signature specimens. The filing is carried out by submitting a form to the Registry Agency. The form for the application is available at the following address in Section B of the drop-down menu. The application may also be submitted online with qualified electronic signature, and in this case the payable fees are lower.
In the liquidation procedure, liquidators represent the company as they have the rights and obligations of the management body – collection of claims, settlement of liabilities, and distribution of the assets. The liquidators complete ongoing transactions and may enter into new ones only if required by the liquidation.
| Term | The term for completion of the liquidation procedure is determined:
If necessary, the specified term can be extended. |
Announcement of the termination of the company
Liquidators are obliged to announce the termination of the company’s activity in the Commercial Register and to initiate the liquidation procedure. As a result, the name of the company is complemented with “in liquidation” – so that the persons, who are in certain relations with the company, may find out that the company’s business is terminated and it is in a liquidation procedure (art. 9 of the CA). Liquidators are obliged to notify the National Revenue Agency (NRA) of the initiated liquidation.
Sending invitations to the creditors
Liquidators must invite company’s creditors to claim their receivables. The invitation is sent in writing to the creditors (e.g., by means of a registered letter with receipt of delivery or notarial invitation). The invitation is announced in the Commercial Register through the submission of an application, based on a Template, to the Registry Agency. The application template is available at the following address in section G from the drop down menu. The application may also be submitted online using a qualified electronic signature, as it is due to a lower government fee. The purpose of the invitation is to provide an opportunity for all creditors to submit their claims within the liquidation proceedings.
Cash collection
Liquidators must complete the currently existing contracts of the company, to collect company’s receivables, and sell the assets (movable and real property, rights, etc.). The funds are used to fulfil all the obligations and repay all debts of the company, if any.
Preparation of a balance sheet and a report to the balance sheet
Liquidators prepare the opening balance sheet as of the moment of termination of the company and a report, clarifying the balance sheet. In the end of each year, they carry out the annual year-end closing and submit an annual financial statement and annual report on his activities, to the management body, who took the decision for the termination. The management bodies issue a statement on the acceptance of the initial, the annual year-end closing balance sheet and for the release of the liquidators from responsibility (art. 270 of the CA).
Distribution of the remaining property
The property, remaining after the fulfilment of all the obligations of the company, is distributed among the shareholders (art. 271 of the CA) in the form of liquidation shares[2]. Company’s property can be distributed only following the expiry of 6 months after the date, when the invitation to the creditors is announced in the Commercial Register (item 2 above). As a rule, the liquidation share of each shareholder is determined in proportion to the participation in the capital of the company, unless otherwise provided for in the articles of association/articles of incorporation of the company through.
Erasure of the company
When all the obligations and debts have been settled, and the remaining property has been distributed, the liquidators file an application for deletion of the company by submitting a form to the Registry Agency. From the moment of its deletion from the Trade Register, the company terminates its legal existence (art. 273 of the CA). The application can be found in the drop-down menu in section A, the field “Deletion of the trader” is checked.
| Important to know | |
| If during the liquidation a doubt of insolvency arises, an insolvency proceeding may be opened. The liquidation proceedings are suspended if a court decision to initiate insolvency proceedings has been issued. If the court declares the company insolvent or overindebted, the liquidation is terminated (art. 272а of the CA). |
What is fast liquidation procedure?
The fast liquidation procedure is an accelerated and simplified procedure, regulated in Art. 274a of the Commercial Act, which applies to companies without activity and without liabilities. Its purpose is to shorten the liquidation period and reduce the costs when terminating companies that are not active, have no employees, and do not possess significant assets.
Conditions for starting fast liquidation
Fast liquidation can be applied only when the company meets the following conditions:
- It has not conducted any activity or has terminated its activity more than 12 months ago.
- It has not employed workers or has terminated its employment relationships more than 12 months ago.
- It has had no registration under the Value Added Tax (VAT) or has terminated its registration more than 12 months ago.
- It has no outstanding obligations to the state and to municipalities.
- There is no ongoing control/tendency of tax liabilities and mandatory social security contributions, with the National Revenue Agency (NRA) as the supervising authority.
- It is not a defendant in court proceedings, is not a debtor in enforcement or enforcement-by-order proceedings, and no enforcement proceedings under the Law on Special Pledges or the Law on Financing Agreements for Financial Security have been initiated against it.
The liquidator is obliged to submit a declaration confirming the existence of these conditions together with the application for opening the liquidation.
Procedure for fast liquidation
The procedure starts with a decision by the general meeting to terminate the company and appoint a liquidator. The Trade Register is entered with the status that the company is “in liquidation,” which informs all interested parties.
The key feature of this procedure is the shortened deadline for creditors to file claims. While in ordinary liquidation the distribution of the assets is possible only after six months from the publication of the invitation to creditors, in fast liquidation this period is reduced to three months. After it expires, the liquidator may proceed to satisfy creditors if such claims have been made, and in the case of no asserted claims or after their settlement, to distribute the remaining assets among the partners. The final stage of the process is the filing of an application for deletion of the company from the Trade Register.
| For more information | |
 | For more information on the liquidation procedure and the related regulatory framework, please refer to the websites of the: |
[1] Persons, to whom the company is indebted or liable;
[2] Within the meaning of the CA the liquidation share is the part of Company’s property, which the owner of the share receives in case of liquidation of the company. The term liquidation share is also used for the purposes of taxation, as in these cases the law also determines the scope of the term – For example §1, item 6 of the additional provisions of the Income Taxation of Natural Persons Act, §1, item 6 of the additional provisions of the Corporate Income Taxation Act).