Get ready for an exciting journey through the process of company liquidation in Mongolia! Whether it’s initiated by a decision of the shareholders or an order of the court, the process is filled with twists and turns.
If the shareholders decide to liquidate the company, the Board of Directors (or the executive body in its absence) will prepare a draft Shareholders Resolution of Liquidation. This resolution must include the appointment of a liquidation commission, authorization of its powers, a timeline for liquidation, and a procedure for distributing the company’s remaining property among shareholders after creditors’ claims are satisfied. The resolution must be approved by an overwhelming majority of shareholder votes.
Once the resolution is approved, the company must notify the relevant state registration authority in writing within three working days and attach the original decision on liquidation. The executive authority of the company will then be terminated, and the liquidation commission will take over.
The liquidation commission is responsible for publicizing the pending liquidation of the company via the media. If the company has any licenses, the commission will request that they are canceled and returned to the relevant authority. The commission must also complete several actions during the liquidation process, including officially handing in the State Registration Certificate of the company, closing the company’s bank accounts, handing over the company’s official seal to the police, and obtaining a form from the Customs Office to confirm no related taxation issues remain on behalf of the company.
The Tax authority will then examine and investigate the company’s tax records, and an auditor will be required to handle the closing financial statements. An accountant will issue the closing balance of the company. Once the Liquidation commission has submitted the required documents to the State Registration Office (SRO), the SRO will remove the legal entity from the state register. The registration body will announce publicly the deletion of the company from the State Register. It will likely take 6 months to 1 year to complete the company liquidation process.