Before entering into liquidation, under new rules, companies are required to substantiate to a notary that they face no criminal prosecution

Voluntary liquidation is one of the options for closing down a company. The liquidation process entails numerous obligations, including providing evidence that no criminal prosecution has been brought against the company under Section 32(2) of the Corporate Criminal Liability Act. Compliance with this new obligation must be substantiated to the notary before the company’s entry into liquidation, as an affidavit is no longer sufficient. Liquidation of legal entities is provided for in Sections 187 to 209 of the Civil Code and Sections 37 et seq. of the Companies Act. Other regulations governing liquidation include in particular the Tax Code and the Archiving and Filing Services Act. The purpose and objective of liquidation is to wind up a company, settle all relationships with creditors, debtors, public administration authorities and employees and to strike the company off the Commercial Register, i.e. to cease the company’s existence.

For a company to enter into liquidation, notaries now require substantiating the fact that the legal entity is not a party to criminal proceedings.

This obligation arises from the provisions of the Corporate Criminal Liability Act referred to above and the Notarial Code. Sections 70 et seq. of the Notarial Code impose an obligation on the notaries to include in the notarial deed, which will serve as a basis for an entry in a public register, a statement on compliance with requirements for the preparation of a notarial deed. As a result, the notary is obliged to examine whether or not the statutory requirements for company dissolution are complied with and whether or not the notarial deed may be prepared. In this respect, notaries until recently relied upon affidavits delivered by the company’s executive body. However, this is no longer possible according to the current interpretation of the law by the Chamber of Notaries and recently published professional articles. Before entering into liquidation, the company will file an application for a certificate of no prosecution with a court of competent jurisdiction. The court will notify the company usually within 14 days. The certificate serves as a basis for a notarial deed in which the company will resolve to dissolve and enter into liquidation and will also appoint a liquidator. Do you need someone to guide you through the liquidation process? Let us know and we will take care of it all for you.