Business liquidation
Business liquidation is the process of officially terminating a company’s operations. During liquidation, the organization is removed from government registers, its assets and debts are settled, and obligations to creditors are fulfilled. Business owners may voluntarily decide to liquidate the company, or a court may order its closure due to insolvency or legal violations. Properly completing the liquidation process helps avoid future issues with tax authorities, creditors, and business partners.
Business liquidation procedure
The liquidation process for a Limited Liability Company (LLC) or Individual Entrepreneur (IE) is regulated by law and involves several mandatory steps:
- Decision to close the business. The company’s founders hold a meeting and decide to liquidate the business. The meeting minutes are documented.
- Notification of tax authorities and creditors. Within two days of making the liquidation decision, the company must notify Georgia’s National Agency of Public Registry and publish an announcement about the liquidation on the official registry website and in official media to inform creditors;
- Appointment of a liquidation commission. A liquidator or a special commission is appointed to oversee the closure. The liquidator manages the process, interacts with tax authorities, evaluates the company’s assets, and oversees settlements with creditors;
- Inventory and debt settlement. A review of the company’s assets is conducted, a liquidation balance sheet is prepared, and the process of settling debts begins. If the company’s assets are insufficient to cover all debts, bankruptcy proceedings are initiated;
- Submission of the final liquidation balance. Once debts are settled and obligations fulfilled, the company prepares a final liquidation balance sheet, which is approved by the founders;
- Removal from the business and non-profit legal entity register. After completing all procedures, the necessary documents are submitted to the register, and the company is officially removed, marking the legal closure of the IE or LLC.
The legal process can be complex, especially if the company has outstanding debts or assets requiring distribution. Professional assistance may be necessary to ensure proper documentation and avoid penalties.
Liquidation timeline
Voluntary liquidation is a relatively fast process, as the founders initiate and manage it independently. On average, it takes about three months.
Compulsory business closure can take significantly longer, especially if the company faces lawsuits or bankruptcy proceedings. The liquidation process may require anywhere from three months to a year. If the company has outstanding debts or issues with tax audits, the timeline may extend further. In such cases, the court becomes involved, typically prolonging the process by an additional six months.
Financial Outsource – Assistance with Company Liquidation
The business liquidation process requires in-depth knowledge of legal regulations, proper documentation, and the resolution of financial obligations. Mistakes at any stage can lead to administrative fines, lawsuits, and other negative consequences. To avoid these challenges, entrust the process to experienced professionals.
In Tbilisi, you can order professional business liquidation services from Financial Outsource. We offer comprehensive assistance, including:
- Legal consultation;
- Preparation of all required documentation;
- Coordination with tax authorities and financial institutions;
- Full support throughout the closure process.
Our specialists have extensive experience in handling complex business-related issues. We provide a personalized approach to each client and ensure legal support at every stage. Contact us, and we will make sure your liquidation process is completed smoothly and without unnecessary delays.
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