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The decision to terminate a company’s operations requires a series of actions to be taken, leading to the closure of current affairs, settlement of accounts with contractors and partners, and the final termination of the company’s legal existence. The process of liquidating a commercial company is highly formalized, so it is advisable to entrust it to a law firm with experience in corporate law.

RPMS law firm supports entrepreneurs at every stage of their business, including during liquidation proceedings. We prepare the necessary documents, assist in closing down the business, repaying liabilities, collecting receivables, and distributing assets after the liquidation and removal of the company from the register. This gives partners the certainty that all company matters have been properly concluded, allowing them to focus on their future business plans without having to deal with formalities.

What does the liquidation of a company involve?

The purpose of liquidation is to terminate business activities and remove the company from the National Court Register. Although the general liquidation process is similar for different types of companies, the Commercial Companies Code provides for certain differences depending on their legal form.

Typically, liquidation involves four main stages:

  • Completion of the company’s current affairs,
  • Collection of receivables,
  • Repayment of liabilities,
  • Liquidation of assets, satisfaction of creditors, and distribution of remaining funds among the partners.

Although it sounds simple, each of these stages requires a lot of administrative and formal activities, including filing for liquidation, convening a shareholders’ meeting, preparing an opening balance sheet, and indicating the place of storage of documentation after the dissolution of the company.

When is a company liquidated?

The reasons for liquidation may result from:

  • a decision by the partners (e.g., a resolution to terminate operations),
  • provisions of the agreement or articles of association (e.g., achievement of a specific economic goal),
  • legal provisions (e.g., declaration of bankruptcy of the company).

It is worth planning the process in advance – the liquidation of some companies, e.g., joint-stock companies, can take many months, while the dissolution of a general partnership can be much faster.

How does the liquidation process work?

Although the basic principles are common to all companies, the detailed liquidation process varies depending on the size, financial structure, and type of business. It is important to distinguish between the dissolution of a company and its liquidation – dissolution only takes place after all liquidation activities have been completed and the company has been removed from the National Court Register.

Commencement of liquidation

Liquidation commences on the basis of reasons specified in the articles of association or by way of a resolution of the shareholders. Typical reasons may include:

  • achievement of the company’s objective,
  • expiry of the term for which the company was established,
  • inability to continue business operations due to personal reasons of a shareholder (e.g., illness, departure).

Liquidation may also result from a court decision, e.g. when the company’s continued operation has become impossible or threatens the public interest. From the moment of its ommencement, the company is required to use the name with the addition “in liquidation.”

Appointment of liquidators

The next step is to appoint liquidators – persons responsible for the proper termination of the company’s operations. Most often, they are partners, although they may also be third parties or persons appointed by the court.

The opening of liquidation, the appointment of liquidators, and the manner of representation of the company must be reported to the National Court Register within 7 days. Liquidators prepare financial statements, announce a call to creditors in Monitor Sądowy i Gospodarczy (Court and Economic Monitor), and carry out all necessary settlements.

Liquidation activities

The duties of liquidators include:

  • closing current affairs,
  • collecting receivables,
  • repaying liabilities,
  • distributing assets among shareholders.

New investments may only be undertaken if they facilitate the completion of the liquidation.

In practice, when a company is no longer operating, this process may boil down to waiting for the statutory 6 months to elapse – however, even in such cases, liquidation can be more complex than registering a new company

Completion of liquidation

Once all activities have been completed, the liquidators submit an application to the registry court to remove the company from the National Court Register. In addition, the tax office and the Social Insurance Institution (ZUS) must be notified if the company employed staff or was a contributor.

Simplified liquidation of a company

Due to the time-consuming nature of the standard procedure, the regulations provide for a simplified liquidation procedure, available, among others, to general partnerships, limited partnerships, and professional partnerships.

In this case, the partners may adopt a resolution to terminate the business without formally opening liquidation proceedings. The simplified procedure allows, among other things, to:

  • retain the existing name of the company,
  • avoid the obligation to report the liquidation to the court,
  • maintain the existing rules of representation and proxy.

The simplified procedure is flexible – the partners may decide on the manner of satisfying creditors, collecting receivables, and distributing assets. In practice, this allows, for example, the entire enterprise to be transferred to one partner with the obligation to settle with the others, or the assets to be sold to a third party.

A similar solution is also provided for a simple joint-stock company, provided that the conditions specified in Article 300¹²² of the Commercial Companies Code are met.

The process of liquidating a company is a complex undertaking that requires not only knowledge of Polish commercial law, but also experience in the practical aspects of running a business. Each stage—from the decision to dissolve the company, through the appointment of liquidators, to the final deletion from the register—involves numerous obligations and formalities. Improper preparation of documentation or omission of a required step may result in prolongation of the process, additional costs, and even liability of the partners or liquidators. That is why it is worth seeking professional assistance.

The RPMS law firm provides comprehensive support in the liquidation of all types of companies – from limited liability companies to joint-stock companies and partnerships. Our team of lawyers and business advisors oversees every aspect of the proceedings, ensuring the safety of the partners, correct settlements, and timely completion of the process. Thanks to our practical approach and individual planning of activities, we help to carry out the liquidation efficiently, minimizing risk and formalities. If you are considering terminating your company’s operations, please contact us. Together, we will develop an optimal strategy that will allow you to close the current stage of your business and safely start new business ventures.