If the company terminates without legal successor and the company is still solvent, final settlement should place. If your company is insolvent, it can initiate liquidation process against itself. You can read more about it in our article: Liquidation
If your company has no debts or you can pay the debts, the company can end with final settlement. In case of hiring our office, it would be the most effective if we were appointed to act as the representative of the liquidator for all proceedings. So the process would be cut short quickly and efficiently by us instead of a very complicated and time consuming procedure.
The final settlement process in Hungary:
The Company's executive or members shall call a general meeting, which decides on the final settlement, the election of the liquidator and the starting date of the process. In our or the company’s office we usually hold the meeting, we also write the report about it with an attorney countersign.
With the starting date of liquidation, the former executive’s responsibility terminates, so the liquidator will be in charge of the company’s cases. The final settlement to the commercial court will be announced by us.
The main tasks of the liquidator in the final settlement:
• measuring the financial situation of the company,
• recovering debts,
• balancing debts,
• asserts its rights and obligations,
• The assets have to be sold, if necessary,
• After satisfaction of creditors, among the company's members (shareholders) the remaining cash distributed
• Company terminates the operation.
At the start of final settlement the company's former managing director shall:
- Within 30 days after the start of the final settlement, the closure report should be wrote and published by him/her
- Within 30 days of the start date of the final settlement. the final tax returns should be submitted to the tax authority
- Fulfilling the obligations of tax returns behindhand with the business closing tax return
- Documents of the company have to be given to the liquidator within 30 days of the final settlement
The tax returns requirement must be met even if the tax liability was not incurred.
The company's creditors of their claims can be reported on the final settlement within 40 days of publication. The liquidator prepares a list of the creditors' claims and submits to the registry court. Both will be put on the general meeting.
The liquidator prepares opening balance of final settlement from the data of the final report. Then from the creditors' claims a corrected opening balance sheet will be created. Both will be submitted on the general meeting. The adjusted opening balance is important in measuring the company's real financial situation.
If the final settlement is not completed in the business year it was initiated, the liquidator is required to set out the following yearly according to the accounting law:
- preparing reports under the accounting act;
- The completed report should be deposited and published within 150 days after the fiscal year of final settlement;
- preparing the company's prospect, as well as the case report of the main proceedings in final settlement for the court and authority
Completion of final settlement
The final statement (from the initial date of implementation) should be completed within three years. The liquidator prepares report about the last business year, final report and proposes of assets distribution, and also makes the final tax returns.
Preparing the final tax returns, financial statements and the proposed distribution of assets, it is necessary for the liquidator to take the below into account:
- the liquidation costs incurred in future
- stated, declared and payable personal income taxes after the income deducted from the business
Need to decide on the fees of the liquidator, the final settlement costs and other expenses in the proposal of assets distribution. Other expenses cover the preservation of documents and further termination fee of the company.
The conclusion of liquidation - as the opening too - must be reported to the register court. The company can be cancelled by the court if there are no pending proceedings against any registered public company and has no debt.
The above clearly shows that the final settlement of the company poses a serious challenge with company law and tax law, so we highly recommend you to take expert help and write us to info [wnW5DKrg] drszeiler.hu about the issue.