Liquidation of a GmbH or UG: This is how liquidation works
Lack of orders, a court order or private reasons: If you want to end your self-employment, you are bound by strict regulations. Especially if a GmbH or UG is to be deleted. The so-called liquidation is a process, the end of which results in the deletion of the company from the commercial register. But how exactly does this work? What do you have to consider and what costs do you have to expect?
What is a liquidation of a GmbH or UG?
Liquidation” refers to the dissolution or winding up of a GmbH/UG. In the course of this process, the assets of the company are sold, all debts are settled and the remaining funds are distributed to the partners or shareholders. Liquidation is completed as soon as the GmbH or UG no longer has any realizable assets.
When is a GmbH/UG liquidated?
In principle, a GmbH/UG is liquidated as soon as there is no longer any commercial activity and this is no longer intended in the future. In addition, a GmbH/UG may be liquidated pursuant to § 60 et seq. GmbHG may be liquidated, if:
the period of business activity specified in the articles of association has expired
the shareholders decide on liquidation
a court orders the liquidation
insolvency proceedings have been opened
liquidation is required due to lack of assets
individual reasons and reasons agreed in the articles of association occur
What is the difference between dissolution and liquidation?
Colloquially, a liquidation is often referred to as “dissolution”. However, this is not precise, because formally it is the beginning of the liquidation. This in turn consists of three phases:
- the dissolution
- the resolution phase
- the liquidation
The dissolution merely refers to the existence of the reasons named in § 60 GmbHG or a shareholders’ resolution to dissolve. The actual liquidation follows the dissolution as a phase of winding up and ends with the deletion of the GmbH/UG.
How does a liquidation proceed?
Phase 1: The dissolution
As a rule, you decide to dissolve your GmbH or UG together with the shareholders. To this end, a resolution to dissolve the company is voted on at a shareholders’ meeting. This regulates important points of the liquidation phase. For example, the appointment of liquidators, the safekeeping of the books and the revocation of procuration.
If the articles of association specify a specific duration of the GmbH or UG, the resolution on dissolution must be notarized. In addition, an amendment to the articles of association is required, which is notarized by the notary public and submitted to the commercial register. If the resolution is effective, your company must use the name suffix “i.L.” (in liquidation) or “i.Abw.” (in liquidation).
Tip: If you would like to know what other legal consequences the dissolution resolution entails, you can receive detailed, further information at a fair fixed price as part of our legal consultation and can submit your case to us right away.
Phase 2: The resolution phase
By law, every liquidation must be supervised by so-called liquidators. They take over the role of the managing director and are the legal representatives of your company for the period of the liquidation. Liquidators have the task of
- terminate the ongoing business of the company
- collect existing debts
- pay off debts
- liquidate existing assets
In addition, liquidators are obliged to inform creditors of the company about the liquidation. For this purpose, the liquidation is published in the electronic Federal Gazette. Subsequently, creditors are requested to contact the company and inform it of any outstanding claims.
To protect the creditors, a so-called blocking year is imposed on your company (§ 73 GmbHG). During this period, any distribution of assets to the shareholders is prohibited. This means that you must first settle the creditors’ claims before distributing the remaining capital of your GmbH or UG to the shareholders. Important: Even after the end of the blocking year, creditors can still assert their claims against your company.
After the end of the blocking year, you may distribute the remaining company assets. If at this time there are still liabilities to creditors who have not come forward, you must deposit a so-called security deposit. This can consist of:
- money or securities
- the pledging of tangible assets
- mortgages on domestic real estate
- guarantees
Phase 3: Liquidation
The liquidation phase ends as soon as the blocking year has expired and no further measures need to be taken. Subsequently, the liquidators notify the Commercial Register of the end of the liquidation. The register court checks whether the liquidation has been properly completed and the liquidation phase has actually ended. If this is the case,
What is a deletion due to lack of assets?
In addition to the reasons stated in § 60 GmbHG, your GmbH or UG can also be deleted for another reason: the lack of assets. This deletion is possible if your company no longer has any assets that are suitable for satisfying the creditors or for distribution to the shareholders. Cancellation on the grounds of insolvency serves to protect legal transactions. It is intended to prevent creditors from entering into a business relationship with a company without assets.
For you as a director or shareholder, this type of deletion has some advantages. There are no costs for the annual financial statement and the tax consultant. In addition, you do not have to fulfill the publicity obligations. Another advantage is that your company is not subject to a blocking year and that the deletion is therefore completed much faster than with a classic liquidation.
Whether your company can be deleted due to lack of assets is decided by the registry court. It takes action at the request of the tax authorities or professional bodies (such as the Chamber of Industry and Commerce). As a managing director or shareholder, on the other hand, you have no possibility of applying for rapid deletion.
What does the liquidation of a GmbH or UG cost?
If you want to liquidate your GmbH or UG, you have to expect some costs. How high these are depends on the individual case. The costs for the preparation of the liquidation opening and closing balance sheet usually amount to several thousand euros. In addition, there are the notary’s certification costs of approx. 250 euros. For the notarial costs for the actual deletion of your company, approximately 100 to 150 euros are due. If your company is to be deleted due to lack of assets, the costs for this amount to around 1,200 euros.
Liquidation and deletion of a GmbH/UG: The most important facts in brief
- The liquidation of a GmbH or UG is possible for many reasons – e.g. by resolution of the shareholders (§ 60 GmbHG).
- The liquidation process is divided into 3 phases: the dissolution, the liquidation and the deletion.
- For the liquidation one or more liquidators must be appointed
- The duties of the liquidators include collecting existing debts, making outstanding payments to creditors and liquidating all assets
- Upon completion of the liquidation phase and the deletion of the GmbH/UG from the commercial register, the existence of the company is terminated
