As practice shows, wiping a company off the face of the earth is not an easy task. Of course, as is the case with each difficult and unpleasant job to be done, the liquidation procedure of a company in the standard has an alternative: liquidation through offshores.
Despite the outwardly attractive characteristics of this method, it is worth noting that it is a new practice, and some countries' tax authorities treat this practice with skepticism.
What is the liquidation of a company through offshores?
In fact, this represents a re-registration of a share of a company or a company in full to a person who is not a resident of the country.
It should be noted that this type of liquidation of the company has several advantages:
- It is possible to liquidate a company even if it has debts to the budget or counterparties;
- It is possible to legally avoid an audit, which usually affects the closing procedure;
- It is possible to avoid the obligation to remove a company from state registers;
- The duration of the procedure is significantly reduced.
Of course, the perks of such an option will be available only if the procedure is clearly planned, and thought out. Otherwise, despite the conditional legitimacy of it, the attention of the fiscal authorities to the fact of such liquidation cannot be avoided.
In what cases is liquidation through an offshore an actual solution?
To begin with, it is important to remember that the liquidation procedure of a company is divided into two types:
1. Forced
2. Voluntary
The forced liquidation procedure implies the participation of the initiating body and the court, and also prohibits the implementation of company closure through offshore.
There is a list of characteristics that lead to a forced liquidation procedure:
- The company is declared bankrupt;
- The amount of the company's current assets does not meet obligations;
- When registering the legal entity, serious violations of legislative norms were committed;
- The company operates without special permission;
- There is a statement of interested parties.
If the company meets at least one of these criteria, liquidation through offshore will not be possible. In this case, such a procedure is regarded as an illegal operation and entails a corresponding penalty.
For the voluntary liquidation procedure, the company is allowed to use the services of non-residents. But in this situation, it will be useful to consult with a lawyer. A foreigner who should subsequently become the new owner can be entered into the company in two ways:
- Through the purchase of shares;
- By increasing the share capital.
Company liquidation procedure through offshores
Liquidation of the company through an offshore can be carried out independently, or with the help of companies specializing in this kind of operations.
The procedure for transferring a company to an alien should consist of the following steps:
1. The meeting of the founders held in the manner prescribed by law;
2. Recording the result of the meeting in an independently selected form;
3. The formation of a new charter and its notarization.
In addition to the notarized new charter of the company, for the implementation of the procedure, the Tax Service will request the following documents:
- passport of the new founder;
- notarized translation of a passport of the foreign citizen;
- temporary registration of a foreigner in the country;
- permission to conduct a certain type of activity;
- completed forms.
After that:
1. The foreigner pays the share agreed in advance, thus becoming a co-owner of the company;
2. The remaining partners are rapidly leaving the company;
3. The leader dismisses the CEO, and becomes the full owner of the company.
The risks
Of course, liquidation through an offshore, being an innovation in the business space, cannot be called a 100% safe procedure. It is worth resorting to this method of closing an organization only if there are serious reasons. The slightest mistake can lead to the recognition of it as invalid and the rollback of all operations performed, of course, without returning the funds spent.
The tax service is well aware that this method of liquidation is used as a salvation for companies engaged in unclean activities with large debts.
The liquidation of the company through offshores is an alternative option for closing a company. Such “loopholes” in the regulated process, even being legal, can always unexpectedly present former owners of the company with unpleasant consequences.
