Companies may close for a variety of reasons, most often financial ones, and cease all business operations temporarily or permanently. This is a case of company liquidation, a process carried out by Croatian law, regardless of whether the firm was founded with foreign capital or not. to better understand how business liquidation is handled in Croatia.
How may a business be dissolved in Croatia
A firm can be liquidated in one of two ways:
- Through a non-judicial process.
- Through a bankruptcy process with the tribunal’s approval.
The process of liquidation in Croatia is governed by the Bankruptcy Law, Obligatory Relations Law, and Company Law.
What procedures are followed in Croatia for corporate liquidation
Only when there are no outstanding debts to suppliers or unresolved creditor claims may a corporation be liquidated outside of court. All of the company’s assets are divided among the members as part of this procedure. Following that, the company is removed from the Commercial Register. A bankruptcy proceeding can be begun with the Bankruptcy Tribunal’s assistance and is typically started by the creditors that have not had their request for coverage of the claims answered favorably. The procedures for liquidating a firm in Croatia also include the following:
- The creditors’ committee, the insolvency trustee, the bankruptcy judge, and the tribunal are all involved in the bankruptcy process.
- A balance sheet listing all of the assets of the companies must be submitted to the authorities.
- A public auction of the assets will be held. Contracts will be settled on behalf of the debtor. Periodic updates on the progress of the liquidation process will be provided. All claims will then be resolved.
- The trustee will elaborate a final balance statement after the procedure.
Croatian LLC’s dissolution
The steps of liquidating a firm listed above also apply to Croatian limited liability businesses. In Croatia, a limited liability company’s liquidation complies with the Companies Act. In this regard, creditors of a business like this would only get a statement outlining the rationale for the liquidation and the date on which it would begin. The Commercial Register, the balance sheet, the firm’s assets, and each shareholder’s capital contribution are all checked before the company is liquidated.
Overseeing the bankruptcy trustee
The creditors’ committee, a body chosen by the bankruptcy courts, is in charge of monitoring the bankruptcy trustee. Its duties include monitoring the liquidation process and auditing the business’s financial records. The authority must also review the balance sheet. Three judges make up the bankruptcy tribunal, including the president. The tribunal has the authority to select the trustee and the creditors’ committee and to determine whether the liquidation decision is still in effect. The justices of the tribunal also confirm the operation of the committee of creditors.
The duration to liquidate a company in Croatia
In the case of a non-judicial procedure, closing a business could take a few months to many years(when bankruptcy is declared). To effectively manage the entire company liquidation procedure, it is highly advised to enlist the help of legal counsel.
Liquidators
Liquidators must conclude current operations, collect the company’s receivables, liquidate the remaining assets, and settle creditors. They may also engage in new commercial transactions to finish any open tasks. Liquidators operate as the company’s representatives within the parameters of their business activity. Unless a decision is made and entered in the register of businesses, all actions about the liquidation must be taken by the liquidators collectively(at the competent court) establishing that these may be taken separately. Despite the aforementioned, liquidators may let one of them conduct particular operations or certain classes of operations. A creditor who has canceled the articles of association due to its claims against one of the company members, or the bankruptcy manager of one of the company members, is required to act by the decision relating to the conduct of the company’s operations that was unanimously made by the company members, regardless of who appointed them.
