WELCOME TO YOUR "ONE STOP SHOP" for COMPANY LIQUIDATION - THE PROCEDURE:

SHAREHOLDERS: RESOLUTION FOR VOLUNTARY LIQUIDATION

Liquidation shall be opened on the date of adoption by the shareholders a resolution on dissolving the company or incidence of another reason for liquidation. When putting company into liquidation occurs as a result of Shareholders resolution, then the date of opening liquidation would be the date indicated in this board resolution. Shareholders should indicate in their resolution a person who will act as liquidator.

ACCOUNTANTS: PREPARATION OF THE STATUTORY REPORT FOR THE DAY BEFORE DATE OF BEGINNING OF LIQUIDATION

As at the preceding the dates of putting company into liquidation accountants close accounting books and prepare financial statement. The inventory procedure of company assets is necessary as at the preceding the date of putting company into liquidation. Assets and liabilities shall be valuated at net realizable selling prices, not higher than acquisition prices or costs of manufacture, minus accumulated depreciation write-offs, as well as impairment write-offs. The company should also establish a reserve for anticipated additional costs and losses resulting from discontinuance or for incapability to continue its operations. The opening of liquidation during accounting year does not result in ending of the accounting year. The liquidation proceedings will end the fiscal year, resulting in obligation of submitting the Corporation income tax annual declaration and settlement of tax liabilities.

LAWYERS: NOTIFICATION TO POLISH NATIONAL COURT REGISTER ABOUT LIQUIDATION AND ANNOUNCEMENT ABOUT OPENING OF LIQUIDATION

The liquidator’s first obligation is notification to National Court Register about opening of liquidation. The notification should be completed by all liquidators during 7 days from the day of exist the reason of company dissolution. Liquidators are obliged to announce opening of the company liquidation in Monitor Sadowy i Gospodarczy and to call creditors to present their claims during three months from the notice, in newspaper intended for announcements.

ACCOUNTANTS: PREPARATION OF THE BALANCE SHEET FOR THE DAY OF OPENING OF THE LIQUIDATION

Immediately after opening of liquidation, not later then 15 days from the day of opening of liquidation, accountants prepare opening liquidation balance sheet as for the day of opening the liquidation, in which all component assets shall be shown at their transfer value. As for the day of opening the liquidation, while preparing opening liquidation balance sheet accountants should combine all individual components of equity into single core capital, from which intended for sale own shares should be deducted. The liquidators shall submit this balance sheet to the meeting of shareholders for approval.

LIQUIDATORS: ADMINISTRATION OF LIQUIDATION

Liquidators have the powers and duties of the Board. The liquidators shall wind up current affairs of the company, collect receivable debts, fulfill obligations and turn the company's assets into liquid assets.

ACCOUNTANTS: KEEPING ACCOUNTING BOOKS DURING THE LIQUIDATION PERIOD

During the liquidation period the Company is obliged to keep accounting books and prepare financial statements, including statements for the day ending the accounting year. Apart of obligations resulting from current accountancy process, accountants take part in process of held for sale assets valuation, follow booking events concerning sales of assets including sales of inventory, fixed assets, fixed assets in construction, intangible assets.

TAX ADVISORS: TAX ISSUES DURING LIQUIDATION PROCESS

As assets of liquidated company usually do not cover all debts, it is very important to keep accounts payable properly. In practice it happen very often, that the company has large liabilities to shareholders (loans, trade liabilities), which cannot be satisfied from assets possessed by the company. The company can negotiate with shareholders redemption of part or all these obligations, what results in creating taxable revenue. If during the years preceding day of liquidation opening, the company did not achieve losses which can be deducted from possible income resulting from liability redemption, obligation to pay income tax will occur. Company tax advisors should adopt proper tax planning and optimalisation solutions.

LIQUIDATORS: THE DISTRIBUTION OF THE ASSETS

The distribution of the assets remaining after the creditors have been satisfied or secured, among shareholders is possible. Either it should not take place before the elapse of six months from the day of the announcement on the opening of liquidation. If the company act does not contain any provisions concerning principles of assets distribution, the assets shall be distributed among shareholders in proportion to their shares.

ACCOUNTANTS: LIQUIDATION REPORT

The company is obliged, according to The Act of Accounting regulations, to close accounting books as for the day of liquidation process completion – not later then within 3 months from the date of the occurrence of this event. The duty of closing accounts involved duty to prepare complete financial report. The day of liquidation process completion means day preceding the distribution among the shareholders of assets remaining after creditors have been satisfied or secured. Shareholders’ Assembly approves the report by resolution, which requires an absolute majority of votes. In resolution approving liquidation report shareholders should include decision about unit archiving accounting books and employee files and payroll documentation (Archive keeper).

LAWYERS: REMOVAL OF THE COMPANY FROM THE REGISTER

One of the last actions during the liquidation process is applying to the National Registration Court by liquidators to remove of the company from the entrepreneurs register. The removal occurs upon posting the information about deletion from registry.

TAX ADVISORS: TAX OBLIGATIONS RESULTING FROM COMPANY LIQUIDATION

Company shareholders are liable to pay lump sum 19% Personal or Corporation Income Tax calculated from value of assets received in connection with company liquidation. Income is decreased by expenses incurred in connection with taking up shares in the company. With the closure of accounts as for the day of liquidation process completion the fiscal year ends up. During 3 months liquidators should submit annual tax declaration and settle any Corporation Income Tax liabilities. Both of these obligations should be fulfilled in cooperation with accountants and tax advisors.

TAX ADVISORS: NOTIFICATION DUTIES TO TAX OFFICE AND OTHER ADMINISTRATION BODIES

Not later then on the last day of company existence liquidators are obliged to notify tax office in paper form about location where accounting books and documentation relating to these books will be stored. Liquidators are obliged to notify tax office about dissolution of the company after removal the company from court register. Copy of liquidation report should be attached to this notification letter. This notification letter should include information about the court and judgments’ which became the basis for removal of the company from entrepreneurs register. The same notification is submitted to Social Insurance Office, Statistical Office and banks in which the company possessed bank accounts. In order to avoid mistakes these notification letters should be prepared by tax advisors.

ARCHIVE KEEPER: STORAGE OF ACCOUNTING BOOKS, EMPLOYEE FILES AND PAYROLL DOCUMENTATION

Companies are obliged to store accounting books at least 5 years after the end of the calendar year, in which tax was due. Employee files and payroll documentation must be kept at least 50 years.

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Head Office - Warszawa

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