ALISON&KATE Partners - COMPANY LIQUIDATION IN MONGOLIA

Author: Paralegal A.Nomin-Erdene

Hello, I am pleased to meet you again through the latest blog issued by AKP law firm, aimed at delivering legal knowledge in a simple and understandable way.

Today, we will talk about liquidating a legal entity in Mongolia — that is, stopping the company’s activities and removing it from the Legal Entity’ State Registration.

This article consists of the following content.

About liquidating a company

Make a decision of shareholders about liquidation
Publish an announcement in a daily newspaper
Deliver a notification to the State Registration Office
Obtain a certificate of no debt from the Court Decision Enforcement Agency
Issue a taxpayer cancellation card
Prepare a final report
Obtain a document of seal and stamp submission
Make a removal from the State Registration

About liquidating a company

Liquidating a company is the official process of stopping the activities of that business entity and completely invalidating its legal capacity. This is a process with many stages of law, finance, and registration, and it is carried out according to a specific procedure starting from primary documents to removal from the state register.

Make a decision of shareholders about liquidation

Organize a meeting of the company’s shareholders and make a decision to liquidate the company’s activities. This decision must include:

Appointing members of the liquidation commission,
Setting the period of liquidation,
Making a list of assets and distribution of assets,
Including the power of attorney to the members of the liquidation commission.

According to the decision made at the meeting, the shareholder shall give the necessary power of attorney to the members of the liquidation commission.

When giving power of attorney to the members of the commission, it is appropriate to include all types of authority permitted by law. In this way, the members of the commission will be able to directly participate in the tax authority’s inspections and the next stages, issue necessary documents, give explanations, and sign decisions without delay.

Giving such a fully authorized power of attorney creates an important basic condition to avoid interrupting the process, save time, and provides the basis for conducting the liquidation process more quickly and effectively.

Publish an announcement in a daily newspaper

Within 21 days after making the decision about liquidation, publish an announcement in any daily newspaper.

The content of the announcement must include the company’s registration number, name, and information about the liquidation. Keep the original copy of the published announcement.

This step serves the purpose of delivering information to the public and providing the opportunity to file a claim in court.

Deliver a notification to the State Registration Office

Within 15 business days after making the decision about liquidation, give a notification to the State Registration Office of legal entities that the company has decided to be liquidated.

Obtain a certificate of no debt from the Court Decision Enforcement Agency

During the liquidation process, the company’s debt status is important, so obtain a certificate from the Court Decision Enforcement Agency on whether there is debt or not.

Issue a taxpayer cancellation card

Submit the following documents to the tax authority. These include:

Official request about liquidation,
Copy of the State registration certificate,
Copy of the director’s national ID card,
Certificate from the Court Decision Enforcement Agency,
Original copy of the liquidation announcement published in the daily newspaper.

This stage requires the most time, and the tax authority thoroughly inspects all reports, payment status, and the cancellation inspection. In practice, there is a high risk of additional taxes and debts arising, so the skill and experience of a lawyer play an important role in minimizing or completely avoiding these.

Therefore, receiving assistance from a lawyer is of special importance for correctly preparing the documents, shortening the inspection stages, and preventing mistakes in advance.

Prepare a final report
After the tax inspection is completed, have the financial statements checked by an auditor and undergo an audit.
After that, submit the following materials to the Finance and State Treasury Department of the relevant district. These include:

All financial statements of the company from the time of its establishment, by each quarter,

Final report or closing balance,
Corporate income tax and withholding tax reports,
Statements of the company’s MNT and USD accounts,
Cash transaction journal,
Other materials

Obtain a document of seal and stamp submission

Submit an official letter requesting the collection of the seal and stamp, along with the seal and stamp, to the state registrar, obtain the document confirming the collection of the seal and stamp, and attach it to the liquidation documents.

Make a removal from the State Registration

After all this, the liquidation commission issues a resolution that the operation is completed, prepares the request and all necessary documents, and submits them to the State Registration Office of legal entities. These documents include:

Shareholder decision
Power of attorney
Certificate from the Court Decision Enforcement Agency
Card confirming cancellation by the tax authority
Original copy of the daily newspaper in which the liquidation announcement was published
Final report
State registration certificate
Receipt of stamp fee payment
UB 03, 12 forms
Copy of the director’s passport
Other documents

Based on all these steps and documents, the State Registration Office records in the state registration database within 3 working days that the legal entity has been liquidated.

Thus, it is important to note that company liquidation is not only about issuing the closing decision, but rather a process with detailed stages.

If you want to receive detailed advice and information related to this article,

please contact us at the address below.

Phone: +976 77041414

Email: Contact@akp.mn

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COMPANY LIQUIDATION IN MONGOLIA