Closing a company is harder than opening it. Registering an LLP takes one day and requires no one's permission. Liquidation is the reverse procedure, and it is precisely at this stage that a business first becomes the subject of close government scrutiny: as long as the company's BIN remains in the National Register, the LLP retains its legal capacity — and with it, tax obligations and the director's personal liability.
For this reason, simply stopping tax reporting and liquidation are far from the same thing. A company left unattended does not cease to exist on its own: penalties keep accruing, there is a risk of forced removal from the register, and the owner retains a whole range of obligations they will learn about at the least convenient moment.
Below we break down how the procedure works in 2026: the two possible ways to close a company, the role of the tax audit, real timelines, and the stages where owners most often incur losses.
Two ways to close a company: simplified and standard
An LLP can be closed in two ways, and the difference between them is fundamental: it determines both the depth of tax control and the overall timeline of the procedure.
The simplified procedure is available to a limited circle of companies — as a rule, non-VAT payers with no outstanding debt and not subject to a number of additional conditions. For such taxpayers, desk control is carried out instead of an on-site tax audit, which noticeably shortens the closing timeline.
The standard procedure applies to all other companies, including VAT payers. It involves a full-scale tax audit, work with creditors, and passing through a set sequence of stages, and therefore takes considerably longer.
A key point that often comes as a surprise to owners: the simplified procedure is closed to most operating companies. Simply being a VAT payer is enough to leave only the standard path, with an audit.
The simplified procedure: who can use it
The simplified procedure is designed as a fast-track exit for companies with no outstanding obligations or complicating circumstances. It is available to a resident legal entity that simultaneously meets all of the following conditions:
- is not a VAT payer;
- has no debt on taxes, social contributions or pension payments;
- is not registered for certain types of activity (within the statute of limitations);
- is not on a tax-audit plan or list and is not undergoing reorganization.
If even one of these conditions is not met, the state revenue authority refuses to apply the simplified procedure. In that case, only the standard path remains.
Even when the simplified procedure is formally available, it does not mean an absence of control. Instead of an on-site audit, desk control is carried out: the system cross-checks the company's history against bank data, electronic invoice (ESF) registers and information from government agencies. Discrepancies found are formalized as a notice, which allows a limited period for correction and payment. In other words, even the simplified path is not just filing a single application — it is a reconciliation process in which any discrepancy from past periods becomes apparent.
Before filing an application for liquidation, it is worth at minimum running an express audit of the company's accounting records so that qualified specialists can assess whether it can go through liquidation in its current state. In our practice, almost no company was ready for liquidation right away: in 9 cases out of 10, the books need to be put in order, tax debts need to be paid off, and tax returns need to be filed or corrected.
The standard procedure: the sequence of stages
For most companies, liquidation follows the standard procedure. It is a sequence of about fifteen stages, and missing a deadline at any one of them halts the entire procedure. Let's go through them in order.
1. Decision on liquidation and appointment of a liquidator. The sole participant (or participants) executes a decision; with several participants, the general meeting adopts minutes. A liquidator (or liquidation commission) is appointed; from this moment the director loses their authority — management of the company passes to the liquidator.
2. Notifying the registering authority and the state revenue authority. The justice authority and the state revenue authority must be notified in writing of the decision within 3 business days. A delay entails an administrative fine and a mark in the risk-management system.
3. HR procedures. If there are employees, they must be given written notice of the upcoming dismissal at least one month in advance; within the same period — at least one month before the layoff begins — the employment (career) center must be notified. On the day of dismissal, employees are paid all amounts due, including compensation for job loss. The grounds and procedure are set out in Articles 52 and 53 of the Labour Code and Article 103 of the Social Code.
4. Publishing notice of liquidation. Notice of the liquidation, along with the procedure and deadline for creditors to submit claims, is published in an official print publication. The period for creditors may not be less than two months from the date of publication, and moving on to the next stages before it expires is not permitted.
5. Working with creditors and the interim liquidation balance sheet. The liquidator collects creditors' claims, recovers accounts receivable, and, once the creditor period expires, draws up an interim liquidation balance sheet.
6. Liquidation tax reporting and application for an audit. Reports marked "liquidation" are prepared, after which a tax application is filed. The audit here is not assigned at the inspector's discretion — under the standard procedure it is a routine part of the process.
7. Tax audit. The state revenue authority checks the correctness of tax calculation and payment for the period under review. This stage largely determines how fast and predictable the closure will be (more on this in the next section).
8. Settling with creditors in order of priority. After the audit and completion of settlements, property and funds are distributed in the strict order established by law (Article 51 of the Civil Code):
- claims for compensation for harm to life and health;
- wages, severance pay, and remuneration under copyright agreements;
- claims secured by a pledge of property;
- debts on taxes and other mandatory payments to the budget;
- settlements with remaining creditors.
9. Final liquidation balance sheet and distribution of remaining property among the participants.
10. Closing bank accounts, deregistering cash registers and VAT. Accounts are closed after obtaining certificates of no outstanding debt; online cash registers are deregistered and the contract with the fiscal data operator is terminated.
11. Destroying the company seal and submitting documents to the archive.
12. Removal from the National Register. The final step is registering the termination of activity. A company is considered liquidated only from the moment the corresponding record is entered in the National Register of Business Identification Numbers. Until that record exists, the LLP continues to exist with all resulting obligations.
The liquidation procedure is governed by Articles 49–51 of the Civil Code and the Law "On Limited and Additional Liability Partnerships".
The tax audit during liquidation: what is actually checked
This stage is exactly what makes a professional approach to closing worthwhile. Liquidation is one of the few situations in which the tax authority checks a company not selectively but as a matter of course: filing an application to close under the standard procedure is itself grounds for an audit.
The subject of control is not the completeness of the paperwork but the reality of the transactions. The inspector traces counterparties several levels deep and analyzes the company's history over periods within the statute of limitations. Deals with counterparties later found to be unreliable, writing off goods shortly before closing, pass-through payments, discrepancies in document flow — all of these are formal red flags that the risk-management system uses to select a company for an in-depth audit. There's no counting on the "human factor" here: selection is done algorithmically.
There is one practical conclusion: preparation for the liquidation audit should start well in advance. A preliminary audit of your own records before filing the application is not an unnecessary expense — it is a chance to find the problems yourself, rather than from an audit report with additional tax assessments.
Timelines: how long the procedure actually takes
Standard guides often cite a "three months" timeline. In practice, this is achievable only for a perfectly "clean" company — with no VAT, no employees, and no foreign trade operations.
| Stage | Timeline |
|---|---|
| Notifying the justice authority and the state revenue authority | 3 business days from the date of the decision |
| Notifying employees | at least 1 month |
| Notifying the employment center | at least 1 month |
| Period for creditors to submit claims | at least 2 months from publication |
| Tax audit | from one to several months |
| Paying taxes per the liquidation reporting | no later than 10 calendar days |
| Removal from the National Register | final step after all certificates |
Overall, the picture looks like this: the simplified procedure is measured in months — typically two months or more, since even it involves gathering information from government agencies and desk control; the standard procedure with an audit realistically takes six months to a year. A company whose books have not been kept for a long time closes even more slowly: the records first need to be restored, and only then can liquidation begin.
Key risks in 2026
The new Tax Code, in effect since January 2026, has made the closing procedure noticeably more demanding of accuracy. Below are three circumstances to take into account in advance.
Ten days to pay. Taxes calculated and additionally assessed under the liquidation reporting must be paid to the budget no later than 10 calendar days — in actual funds, with no offset and no installment plan. Missing this deadline triggers an account freeze, and the procedure grinds to a halt at a stage that seemed almost complete.
Lower VAT threshold and reform of special regimes. The mandatory VAT registration threshold has been lowered to 10,000 MCI, and some service and trading businesses have been moved from the simplified tax regime to the standard one. As applied to liquidation, this means the pool of companies eligible for the simplified liquidation procedure has narrowed, while the requirements for the state of the accounting records have grown.
Automated selection for audit. The decision on an in-depth audit during closure is increasingly made not by an inspector but by the risk-management system, based on formal indicators. Such indicators cannot be removed after the fact; you can either avoid creating them in the first place, or prepare supporting documents and explanations in advance.
Personal liability of the owner and director
There is a common belief that "limited liability" reliably protects the owner personally. During liquidation, this protection does not always hold.
The obligations of an LLP being liquidated do not end along with the destruction of its seal. If the company's assets are insufficient to settle with the budget and creditors, the obligations can be imposed directly on the founder and the director through the mechanism of subsidiary liability. A court may find grounds for this in dealings with fictitious counterparties, withdrawing funds to the company's detriment, or driving it into insolvency.
The consequences are personal: enforcement can be directed at personal property, and until the debt is paid off, a travel ban out of the country is not out of the question. A separate scenario arises when liabilities exceed assets: voluntary liquidation is not permitted in that case, an obligation arises to initiate bankruptcy proceedings, and attempting to bypass it carries the risk of a finding of deliberate bankruptcy.
This is not a reason for alarm, but it is solid grounds not to treat liquidation as a mere formality. The price of a mistake here is not a fine on the company, but the personal funds and property of its director.
Common mistakes in do-it-yourself liquidation
- The company is abandoned, not closed. Reporting stops, the bank account is left untouched — and a year later the owner faces penalties, a frozen account, and the risk of forced removal from the register with consequences for the founder.
- Approaching the audit unprepared. No preliminary audit is carried out, and discrepancies are discovered only from the audit report, when it's too late to fix anything.
- Missing deadlines. The most "costly" delays turn out to be missing the notification deadline (3 business days) and the tax payment deadline (10 calendar days).
- Writing off goods or moving out remaining stock before closing. This is a classic red flag that triggers an in-depth audit, not a way to avoid one.
- Underestimating the HR side. Violating the dismissal procedure under Articles 52 and 53 of the Labour Code adds labor-law risks on top of the tax risks.
Frequently asked questions (FAQ)
Can an LLP be closed with debts?
Yes, but the procedure depends on the ratio of debts to assets. If the assets are sufficient, the debts are paid off during liquidation in the established order of priority. If liabilities exceed assets, instead of ordinary liquidation an obligation arises to initiate bankruptcy proceedings.
Is a tax audit mandatory when closing a company?
Under the simplified procedure, desk control is carried out; under the standard procedure, a full-scale tax audit. For most operating companies, especially VAT payers, the audit is a routine part of the procedure.
How long does liquidating an LLP take?
Under the simplified procedure, it is measured in months — at least around two to three months, since even it involves gathering information from government agencies and desk control. Under the standard procedure with an audit, it realistically takes six months to a year, since the creditor claim period alone is at least two months.
What happens if you simply stop filing reports?
The company will not close. Penalties for unfiled reports will keep accruing, an account freeze and forced removal are possible — with the risks to the founder remaining in place. This route ends up more expensive and longer than proper liquidation.
Can a "zero" or dormant LLP be closed faster?
If the company is truly "clean" — without VAT, debt, employees or specific types of activity — it may qualify for the simplified procedure. However, a company that is "zero" in fact and "clean" according to the system's data are not always the same thing, so it's best to start by checking the state of the accounting records.
Is the director personally liable with their own property for the LLP's debts?
As a general rule, a participant is liable only within the amount of their contribution. However, during liquidation subsidiary liability is possible, where the company's obligations are imposed personally on the founder or the director — for example, in cases of dealing with fictitious counterparties or driving the company into insolvency.
If you're still at the decision stage and considering a change of tax regime as an alternative to closing, take a look at our breakdown Standard vs simplified regime: how to choose — sometimes it's more advantageous to restructure the company rather than liquidate it.
How we can help
You can get turnkey services from us:
- Liquidation of LLPs and sole proprietors — turnkey closing: from a preliminary audit of your records to the entry on removal from the National Register.
- Bookkeeping recovery — if the company needs to be put in order first, before closing it.
- Bookkeeping — full accounting and tax support so that no loose ends pile up before closing.
This material is for information only and is not individual legal or tax advice. Timelines, thresholds and procedures may be refined by secondary legislation. Before making decisions, check the current version of the law or consult a specialist. Current as of September 16, 2026.