Reasons for liquidating a limited liability company
The Code of Commercial Companies specifies the reasons for liquidating a limited liability company. They include:
- reasons provided for in the articles of association;
- a resolution of the shareholders to liquidate the company or transfer the company's registered office abroad, confirmed by a notarial deed;
- in the case of a company whose articles are concluded using a template contract – a resolution of the shareholders to liquidate the company, signed by all participants with a qualified electronic signature, a trusted signature, or a handwritten signature;
- a declaration of the company's bankruptcy;
- other grounds provided for by law (e.g. a situation where, at the time the articles were signed, the signatories did not have legal capacity).
Shareholders' resolution to dissolve the company
In the case of a voluntary liquidation of a limited liability company, the key element for effectively starting the liquidation is passing a shareholders' resolution to dissolve the company. For such a resolution to take effect, it must be formalised in the form of a notarial deed. An exception to this rule is the situation described in point 3 above, i.e. when the articles were concluded using the template contract. In that case, liquidation of the sp. z o.o. also occurs as a result of a resolution signed by all shareholders with a qualified electronic signature, a trusted signature, or a personal signature.
As a general rule, a resolution to liquidate a sp. z o.o. must be passed by a two-thirds majority.
Liquidation is opened on the day the shareholders pass the resolution to liquidate the company. From that moment on, the designation "w likwidacji" (in liquidation) is added to the company's name.
Company liquidators
In addition to the resolution to liquidate the sp. z o.o., the shareholders must also pass a resolution appointing the company's liquidators. Liquidators may be natural persons, including former management board members no longer in office, provided they meet the requirements set out in the Act.
Indeed, members of the management board – absent other provisions in the articles or shareholders' decisions – become liquidators of a limited liability company by operation of law. However, even if the company's shareholders do not plan any changes in this regard – i.e. have decided that the current board members should serve as liquidators – we recommend passing a resolution appointing them to that role. In practice, some registration courts require the relevant resolution regardless of whether the liquidators appointed are the current board members or a third party.
In addition, the resolution must also specify how the company is to be represented during the liquidation period.
Note that, unless the articles provide otherwise, a liquidator may be dismissed during the liquidation by shareholders' resolution. The court may also dismiss liquidators for valid reasons at the request of persons with a legitimate interest.
On the day liquidation begins, the sp. z o.o.'s management board ceases operations.
Notification of the opening of liquidation
The fact that liquidation has been opened, and information about the liquidators, must be reported by the liquidator to the registration court within 7 days of the opening of liquidation. The notification can also be made by a legal representative (legal counsel or attorney) holding the appropriate power of attorney from the company.
Other necessary documents should be attached to the application, such as: the liquidators' statements consenting to serve in that role.
The application with attachments is submitted electronically, through the Court Register Portal or in the S24 system (if the company was set up in that system). Such submissions are subject to a fee.
In addition, sp. z o.o. liquidators must also announce the opening of liquidation within 2 weeks in the Monitor Sądowy i Gospodarczy on the MSiG-M1 form, calling on creditors to submit their claims within three months of the date of the announcement. The application to publish the announcement is submitted separately, independently of the application to make an entry in the register of entrepreneurs of the National Court Register.
Liquidation balance sheet
Opening liquidation entails the need to close and reopen the books of the company being liquidated and to prepare an appropriate report. In addition, the liquidators must prepare an opening liquidation balance sheet as of the date liquidation opens, which is then submitted to the shareholders' meeting for approval.
Opening liquidation, as noted above, is a complex, multi-stage procedure. Its most important element can be considered the shareholders' adoption of the relevant resolution, since this in a sense marks the beginning of the entire process. However, the company should also draw up a detailed schedule of the entire liquidation before the first stage, to carry it out efficiently and effectively.