Voluntary liquidation of a company - this may be the best thing that will happen to you
The phrase "voluntary dissolution of a company" may sound threatening, but in practice it is a legal action that helps inactive company owners to dissolve it in a convenient, reliable and fast way.
And believe it or not, in most cases it even carries a profit
Moore and Gold, co-legal zap
02/12/2021
Thursday, 02 December 2021, 12:59 Updated: Monday, 06 December 2021, 16:42
Share on Facebook
Share on WhatsApp
Share on Twitter
Share on Email
Share on general
Documents (Photo: ShutterStock)
A case that came to our door begins like this (and the result at the end of the article): A client of our firm, who owned an inactive company, was faced with a difficult dilemma.
On the one hand, she wanted to keep the company inactive for various reasons (among them, also the lack of time and the sentimental value it has for the company), so she chose to pay the required fees every year.
On the other hand, as the years have passed she has reached a point where she no longer has the funds required for the current payments and the requirements for maintaining an inactive company and therefore considered dismantling it, and debating what is the preferred route for her, if at all.
This is not an unusual case.
In fact, quite a significant number of the companies registered with the Registrar of Companies in Israel are companies that are no longer active for various reasons.
Sometimes these are companies that have not had any business activity since their establishment.
More on Walla!
Why Purchase Tax Annoys Me: It's time to rethink purchase tax
In conjunction with Legal Zap
Why does an inactive company create a problem for company owners?
Inactive companies, even those that have only been registered with the Registrar of Companies and have never operated, are required to pay an "annual fee" to the Registrar of Companies, and to submit an annual report on their activities to the Registrar of Companies.
Even if a company does not conduct business, it is still required to pay an annual fee of NIS 1505 (as in the case of our client). And are due to the credit rating of the shareholder or director who was harmed as a result of holding a company that violates the law.
Moreover, an inactive company that does not meet these basic obligations each year is subject to various economic and legal sanctions. , Not only accumulating, but also aggravating from year to year.
What are the sanctions imposed on an inactive company that has not met its obligations?
The annual payment to the Registrar of Companies currently stands at a total of NIS 1,505 per year. This fee amount accumulates over the years, as long as the company is not about to be liquidated. When the balance of the debt exceeds NIS 10,000, the Registrar of Companies may also impose many fines on the companies, in addition to the cumulative annual payment. The law does not allow
fines to be imposed on
shareholders.
In addition, when the company's directors do not submit annual reports to the Registrar of Companies, and do not check the correctness of the company, the government authorities, this can lead to cumulative fines of up to NIS 250,000.
Finally, there may also be legal sanctions on the company's owners and shareholders. A common example is of a shareholder of an inactive company that has not met its obligations and is therefore not authorized to establish new companies.
In other words, if the same customer whose story was brought up at the beginning of the article had sought to continue to keep the company inactive without paying the annual fee, she might have found herself in trouble.
Why is a "voluntary liquidation procedure" an effective, agile and recommended solution for inactive companies?
Closing a company in an orderly process of voluntary liquidation entails many benefits.
First, in a voluntary liquidation proceeding, the company owners will be exempt from submitting annual reports and paying the annual fee, and will even receive a retroactive write-off of the accumulated fee debts, provided it is proven that the company has not been active in these years.
In some cases, it will also be possible to cancel fines imposed on the company, including personal fines on members of the board of directors, to stop collection proceedings, and to cancel sanctions imposed on the company upon its definition as a violator of the law.
What are the profits that may be discovered as a result of voluntary liquidation of a company?
The same client of ours eventually decided to go into voluntary liquidation proceedings. To her surprise, an in-depth examination we performed for her after the liquidation revealed that she was in a credit balance of NIS 7,582 against the income tax. This is a balance that has accrued because it has not performed over the years checks for a tax refund. The impressive tax refund only swelled and accrued respectable interest with each year in which it was not required by it.
Needless to say, this amount came at the right time, covered the costs of the liquidation procedure in full, and made her realize how wise and profitable the liquidation was.
In conclusion, voluntary liquidation of a company is a quick procedure (which can sometimes be speeded up even more), reliable and profitable for the company owner - whether due to the savings in fee payment and reporting costs, whether due to removal of business restrictions imposed on inactive companies, or Sometimes, due to unexpected tax refunds.
Moore & Gold Ltd.
specializes in legal advice and assistance in voluntary liquidation proceedings.
More details on the company's website >> To
contact us, call now: 077-2314480
Article
courtesy of Zap Legal The
information presented in the article does not constitute legal advice or a substitute for it and does not constitute a recommendation for taking proceedings or avoiding proceedings.
Anyone who relies on the information in the article does so at his own risk
Sentence
additional subjects
Tags
membership
