Closing a business in Poland
Economic reasons are the most common cause for company dissolution and liquidation in Poland. The two processes are closely linked and can occur at a certain moment during the existence of the company. It is important to understand the steps that need to be taken during each of these procedures and act accordingly.
The company liquidation procedure in Poland
During the liquidation process a company still exists and has legal personality but its purpose remains only to pay its debts before the dissolution phase begins. During the liquidation, profits cannot be paid to the company’s shareholders. The company will use its assets to pay any outstanding debts to its creditors. If necessary, it will convert assets into cash to pay the debts.
The liquidators manage and represent the company during the liquidation phase. Usually, these are members of the management board, unless otherwise specified in the Articles of Association. The liquidators must draw up a balance sheet, close any current businesses, collect receivables, pay the debts and liquidate the assets. After all the creditors have received their part of the assets, the remaining ones can be distributed among the shareholders.
The company dissolution procedure in Poland
Although the dissolution is usually preceded by the liquidation of assets, there are cases in which the dissolution is made without a previous liquidation, like in the case of company mergers. The dissolution of a company in Poland means that the company is removed completely from the Polish Company Register. The dissolution procedure can either by established through a resolution of the shareholders or through a declaration of bankruptcy issued by a court.
The dissolution and liquidation processes
do not differ much from one company type
to another. The liquidation process
is necessary in order to make sure that the company is properly closed and that is has paid all its debts to its creditors.