Company liquidation is the official process of ending a business entity's activities and completely terminating its legal capacity. It involves a series of legal, financial, and administrative steps that must be completed in sequence, rather than a single closure decision.
Step 1: Shareholder Decision
The process begins with a shareholders' meeting, at which a liquidation commission is formed, a timeline is set, the company's assets are listed, and comprehensive power of attorney is granted to the members of the commission.
Step 2: Public Notice and Registration Authority Notification
Within 21 days of the decision, notice of the liquidation must be published in a daily newspaper, including the company's registration details. Separately, the State Registration Office must be notified of the liquidation decision within 15 business days.
Step 3: Debt Certificate and Tax Cancellation
The liquidation commission must obtain a certificate from the Court Decision Enforcement Agency confirming the company's debt status, and submit documentation to the tax authorities for tax cancellation. This stage typically requires the most time, as it involves a thorough tax inspection.
Step 4: Final Report and Deregistration
The commission prepares audited financial statements and submits its final report to the Finance and State Treasury Department, delivers an official letter together with the company's seal to the state registrar, and files the complete documentation with the State Registration Office. Deregistration is completed within three working days of filing.
Given the number of sequential steps and government bodies involved, companies are advised to seek legal assistance throughout the liquidation process. Alison & Kate Partners regularly advises clients on company liquidation in Mongolia — contact us at contact@akp.mn for guidance.