Liquidation of non-profit organizations

One of the priority areas of activity of the law firm Konsalta is the liquidation of non-profit organizations (NPOs). These are charitable, civil law, and social institutions that do not generate profits and distribute them among their participants. An NGO can receive income, but all funds should be spent only for the purposes specified in the charter. However, a non–profit organization is a legal entity, so its registration and, if necessary, liquidation must be carried out in accordance with the procedure established by law.

 

What is the difference between the liquidation of non-profit and commercial firms

The liquidation of a non-profit organization differs from the liquidation of commercial firms, and in relation to a number of NPOs it can be initiated only by a court decision to fulfill the requirements of interested parties. We suggest that you entrust the difficult task of liquidating any type of NGO to qualified specialists. Our company’s employees have more than 10 years of experience in the field of financial and business support. We guarantee not only the prompt execution of the work necessary to terminate the activities of your organization, but also the compliance of all services provided with current Russian legislation.

Reasons for the liquidation of NGOs

 

The charter of an NGO may imply its liquidation in the following cases::

 

• achieving the goals for which it was created;
• the end of the period stipulated in the charter, planned for the existence of the organization;
• the adoption of an appropriate decision by the governing body.

 

An arbitration court or a court of general jurisdiction issues a verdict on the termination of the activities of a non-profit organization in the following cases:

 

• repeated or gross violation of the current legislation by the institution;
• unavoidable violations of the law;
• inconsistency of the actual activities of the organization with the tasks and goals specified in the charter;

 

The governing body of an NGO, defined by the charter, or the founders decide on liquidation, usually for the following reasons:

 

• insufficient financing of the institution for further activities;
• inability to achieve the set goals;
• changes in internal policy, field of activity, and functioning strategies.

 

In addition, the reason for the liquidation of a non-profit organization may be its bankruptcy. In this case, the initiator of this procedure is both the NGO itself and other structures (the tax authority, the PF of the Russian Federation, etc.) when they apply to the court.

 

How to start the liquidation procedure for NGOs

 

To initiate the liquidation of a non-profit organization, its founders, participants, or the body that decides to close the company, appoint a liquidation commission, and determine the terms and procedure for terminating the NGO’s activities in accordance with the Federal Law “On Non-Profit Organizations” and the Civil Code of the Russian Federation.

 

The property and assets of a non-profit organization that remain after creditors’ claims are satisfied are used for the purposes for which the company was established, or for charity (in accordance with the founding documentation). If this is not possible for any reason, the unspent material assets at the time of the liquidation of the non-profit organization are transferred to the state.

 

Upon liquidation of non-profit institutions and partnerships, the property remaining after settlements with creditors is transferred to the founders or participants. In relation to such organizations, liquidation is carried out according to the standard scheme of termination of commercial companies.

 

How is the liquidation of NGOs carried out

 

The procedure for the liquidation of non-profit organizations is carried out in accordance with the Federal Law “On Non-Profit Organizations” dated 12.01.1996 No. 7-FZ. After the decision to terminate the activities of an NGO is made, the registration authorities are notified about it, and an announcement of liquidation is posted in the State Registration Bulletin indicating the time and procedure for satisfying creditors’ claims (at least 2 months from the date of publication of the message).

 

The liquidation Commission identifies creditors (including by written notification) and receives accounts receivable from the organization. When the deadline for submitting claims expires, an interim liquidation balance sheet is drawn up and approved, which lists the composition of the NGO’s assets, the identified debts to creditors and the results of their review.

 

The liquidation of an NGO is considered completed at the moment when an entry on the termination of the company’s activities is entered into the state register.

 

What documents are needed to liquidate NGOs

 

In order to liquidate an NGO, the following documents must be submitted to the authorities where it was registered:

 

• certificates of registration of a non-profit organization and its registration with the tax authorities;
• the charter of the non-profit organization and the founding agreement (if any);
• the protocol or the Decision of the founders, which contains information on the appointment of the management of the non-profit organization;
• an order appointing the chief accountant of a non-profit organization in respect of which the liquidation procedure is being conducted;
• certificates of state registration of amendments to the constituent documents (if any);
• an up-to-date extract from the Unified State Register of Legal Entities with information about the NGO to be liquidated;
• passports of all participants or founders, the head and the chief accountant of a non-profit organization that is subject to liquidation.