In the life of a company, it may happen that the owners decide to terminate the company, either for internal reasons or for external reasons. If the decision is to terminate the company without a legal successor and the company is not insolvent, there is room for simplified voluntary liquidation. The purpose of the liquidation is for the company’s assets to be distributed among the owners after the company has fulfilled all its obligations and settled its debts.
Companies in Hungary are created by registration in the company register and terminated by deletion from the company register. After stopping business activity, the company can be dissolved by successfully completing the appropriate asset distribution procedure.
The detailed procedure for conducting the liquidation and registering changes related to the liquidation is laid down in Act V of 2006 on company publicity, court company proceedings and liquidation. The mentioned Act in addition to the general provisions on liquidation, regulates simplified voluntary liquidation. With the simplified liquidation, those companies that do not have an audit obligation according to the Accounting Act, have settled all claims and liabilities, i.e. they do not owe anyone (they have no claims or liabilities even towards the owner) are entitled to run simplified voluntary liquidation.
Who is entitled to decide on the voluntary liquidation?
Liquidation may take place based on the decision of the company’s highest body. The supreme body of the company makes a decision on the dissolution of the company without a legal successor, and on ordering the liquidation. The decision states the starting date of the liquidation and designates the liquidator, and also provides for the fate of the legal entities operating with the company’s property share, as well as the foundation or association operating with its participation.
What is the significance of the starting time?
The simplified voluntary liquidation must be completed within 150 days from the start date.
At the start of the liquidation, the mandate of the managing director is terminated, and his powers are exercised by the liquidator.
Employees, as well as the trade unions defined in the labor code, the works council (works representative) must be informed immediately about the initiation of the liquidation, for which the former managing director is responsible for fulfilling this obligation.
When cannot a simplified voluntary liquidation be decided?
The liquidation cannot be decided:
– the company is already subject to any proceedings (regular liquidation, bankruptcy proceedings),
– has an ongoing court case.
Who can be a liquidator?
The supreme body must choose a liquidator. The supreme body of the company can elect anyone as liquidator, but the appointed person must meet the requirements of a managing director and must accept the assignment. Even the former managing director can be trusted with the performance of settlement tasks, this is a proven practice in the case of a simplified voluntary liquidation.
How can company assets be divided?
The main rule is that the assets of the company belong to the members in proportion to their share contribution. In accordance with the main rules, the supreme body makes a decision on the distribution of assets, in which it can decide on the assignment of rights and the transfer of obligations, as well as on the assumption of the company’s debts by someone else.
What is the role of your accountant?
The accounting tasks of the simplified voluntary liquidation are also carried out by the company’s accountant, if he/she has experience in this field. Liquidation is a special area in accounting, very few accountants have this kind of experience, most of them do not undertake liquidation.
That is why it is important to entrust the closing of the company’s life cycle to an expert. ProacTeam has more than 10 years of experience in simplified voluntary liquidation, if you are a fan of orderly and scheduled closing, contact us, we are at your full disposal. For check our prices, please click here: Our prices