Proces
Progress Holding prepares a limited liability company (sp. z o.o.) for liquidation and carries out the liquidation process. During the liquidation process, resolutions are drafted, a liquidator is appointed, and the place of storage of accounting records is designated. Typically, three financial statements are prepared. Below are the main stages of liquidation:
Main stages of liquidation:
-
Adopting a resolution to dissolve/liquidate the company (shareholders’ resolution) or obtaining a final court judgment — the date of commencement of liquidation is the day the resolution/judgment is adopted. During liquidation, the company operates under its existing name with the suffix “in liquidation.”
Appointment of liquidators (by default: members of the management board, unless otherwise provided in the articles of association). Liquidators represent the company and carry out liquidation activities.
Filing the opening of liquidation with the KRS (entry of liquidators, method of representation) — the filing should be made without delay (in practice: within the statutory registration deadlines, usually within 7 days of commencement).
Preparation of the opening balance sheet for liquidation and opening of accounting books “as at the date of commencement of liquidation” (see point 3 for details). The opening balance sheet must be presented to shareholders for approval.
Publication of a notice on the opening of liquidation and a call to creditors to submit their claims (statutory period: 3 months from publication); liquidators must collect submitted claims and safeguard the interests of creditors.
Liquidation activities: collecting receivables, selling assets, settling liabilities, securing creditors (e.g., placing funds in deposit if creditors are unknown or claims are disputed).
Preparation of annual reports by liquidators and financial statements (if liquidation lasts longer than one year).
After the statutory creditor protection period has elapsed (assets may not be distributed to shareholders before 6 months from the announcement of the call to creditors) — distribution of assets among shareholders (if all liabilities have been settled).
Preparation of the liquidation report, filing it with the registry court along with a simultaneous application for deletion of the company from the KRS. The liquidator is also obliged to notify the tax office (provide a copy of the liquidation report). -
Key deadlines and accounting-legal obligations
Opening balance sheet for liquidation: prepared as at the date of commencement of liquidation; liquidators have 15 days to prepare the opening balance sheet and open accounting books for the entity in liquidation (obligations arising from the Accounting Act).
KRS filing (opening of liquidation, liquidators, method of representation) — without delay (in practice: within 7 days).
Publication and call to creditors: notice + call to submit claims usually for 3 months; distribution of assets only after at least 6 months from publication. -
Documents necessary to assess the complexity of the liquidation
If you wish to estimate the cost or complexity of liquidation, the following are required:
Balance sheet as at the date of commencement of liquidation (opening balance sheet).
Profit and loss account (for the year up to the day before liquidation).
Trial balance (copy of general ledger trial balance as at the date of commencement of liquidation).
Full accounting books and VAT e-records (last months/quarters).
List of creditors and debtors (contracts, deadlines, securities, pledges, mortgages).
Copies of credit agreements, guarantees, sureties, leasing contracts, tenancy agreements, employment contracts.
Bank statements (last 6–12 months), any court and administrative proceedings, tax and social security (ZUS) liabilities.
Fixed asset register, depreciation schedules, inventories, property valuations (if applicable).
Collecting the above documents allows for a reliable assessment of the collectability of receivables, immediate enforceability of liabilities, securities, and tax risks — and thus the actual scope of work for the liquidator and potential costs of engaging experts/lawyers. -
How to assess receivables and liabilities — practical criteria (determining complexity)
Receivables — what to check:
Gross amount and age of receivables,
Legal status (whether disputed, time-barred, secured),
Whether securities exist (assignments, mortgages, promissory notes),
Relationships with debtors (capital links), previous enforcement actions, settlement possibilities,
Recovery value (assessment of collectability: high/medium/low).
Liabilities — what to check:
Nature (trade payables, bank loans, taxes, social security (ZUS), contingent liabilities),
Securities and cross-default clauses, maturity dates, penalty interest, contractual penalties, -
Whether the creditor agrees to deferment/write-off, whether guarantees exist for the company,
Liabilities to employees (wages, severance pay, fixed-term contracts),
Risk of legal disputes and litigation costs.
In practice: the greater the proportion of disputed/time-barred/uncollectible receivables and the more secured and personally linked liabilities (guarantees, cross-guarantees), the higher the complexity of liquidation — requiring more Court proceedings, creditor negotiations, and expert opinions.
Do unpaid liabilities “automatically” become income and taxable?
Taxable income arises in the case of remission/release from debt — that is, when the creditor definitively waives the claim and the debtor accepts this waiver. There are also exceptions in tax law (e.g., remissions in restructuring/bankruptcy proceedings may be treated differently). -
Practical implications:
If the creditor formally writes off a liability owed by a company in liquidation — taxable income (CIT) arises for the debtor company at the moment of write-off.
If the liability simply remains unpaid (creditor does not pursue it, the claim is time-barred) — taxation depends on specifics (e.g., limitation alone may constitute income under tax law, but details require analysis). Usually, the tax office will demand recognition of such income and determination of the tax due.
Example scale of complexity (simple / medium / high) — factors affecting the price
Simple — few creditors, collectible receivables, no interest-bearing loans/mortgages, few employees, no court proceedings (standard liquidator activities, short duration).
Medium — larger number of creditors, some disputed or time-barred receivables, 1–2 bank loans, need to negotiate with creditors, several leasing contracts.
High (complex) — significant uncollectible/disputed receivables, many securities/mortgages, court/enforcement proceedings, cross-border liabilities, significant real estate assets requiring valuation and auction/tender, tax risk, and need to cooperate with lawyers and auditors.
Factors affecting price: number of creditors, value and status of receivables, number and type of securities, need for legal proceedings, need for expert involvement, duration of the procedure, liquidator’s liability (e.g., risk of claims after liquidation). -
Checklist — what to collect immediately (list for the liquidator/advisor)
Opening balance sheet for liquidation and last financial statement.
Profit and loss account (up to the day before liquidation).
Trial balance (all accounts).
Current list of creditors and debtors, with contracts and security documentation.
Bank statements (last 12 months).
Loan, leasing, guarantee, tenancy, sale, and supply contracts.
Employee documentation (contracts, settlements, social security).
Files of court and administrative cases.
Fixed asset register and inventories.
Template of the announcement for MSiG.
Contact details of co-owners, attorneys, experts/appraisers (if already available).
Some practical notes and pitfalls
Do not distribute assets before securing creditors (Commercial Companies Code prohibits premature distribution — 6-month protection period).
The opening balance sheet should reflect the marketable value of assets (market value — not always book value).
If debt remission occurs during liquidation (agreement with the creditor), remember the tax consequences (income). A CIT analysis (or individual tax ruling) may be necessary.