There are different ways to terminate a partnership or a company. Which way will be chosen depends among others on the reasons of termination. However, regardless of the termination reasons and before a final deletion from the Entrepreneurs’ Register, it is necessary to undertake certain activities that will lead to the termination of a partnership or a company, settlement of obligations and realization of assets. Termination takes place upon a deletion from the Entrepreneurs’ Register maintained by the National Court Register. Such a deletion is a constitutive entry made ex officio or upon a request of an entitled body, for example a liquidator. Only this activity results in a total dissolution of a partnership or a company.
Some reasons justifying a termination of companies and commercial law partnerships is common for both partnerships and companies. They include, for example:
- reasons provided for in the articles of association or a statute:
- a period of time, for which a company or a partnership was established
- reaching a goal indicated in the articles of association or a statute
- a resolution of partners or shareholders:
- in partnerships it should be a unanimous resolution of all partners
- in companies and limited joint-stock partnerships it should be a resolution of a Meeting of Shareholders or a resolution of an Annual General Meeting on a termination adopted by a qualified majority of votes, and in limited joint-stock partnership additionally a consent of all general partners is needed
- a termination by court upon a winding-up petition:
- partnerships – due to important reasons a petition can be filed by any partner
- companies – a petition can be filed by a shareholder or a member of the company body in case when reaching a company’s goal has become impossible or for any important reasons caused by a company’s relations
- a completion of bankruptcy proceedings.
Additionally, in case of partnerships, the following can constitute a reason of termination:
- a partner’s death
- a declaration of partner’s bankruptcy
- an occurrence of a situation in a partnership, where only one of the partners has a right to practice a self-employed profession.
If in a partnership occurred one of the prerequisites justifying its termination, it does not mean that a partnership ceases to exist automatically. It enters a liquidation stage.
In a general partnership, a professional partnership and a limited partnership there is no obligation to conduct liquidation proceedings. Liquidation is however obligatory when a reason of partnership’s termination is a termination of the articles of association made by a partner’s creditor. In such a case it is also necessary to conduct a liquidation. If there are reasons justifying a termination of a partnership, partners may, instead of time-consuming liquidation proceedings, terminate a partnership activity in another way, providing that it is a unanimous decision. This procedure allows to save time and limit costs, i.a. due to the lack of obligation to draw up a balance sheet on a day of starting and completing a liquidation. Another way of terminating a partnership may be in a form:
- an acquisition of a partnership’s assets by one or more partners
- a sale of all assets and payment of obligations.
Completion of all affairs of a partnership within the framework of its termination without liquidation, particularly the payment of obligations, entitles a partnership to file a request to the National Court Register to delete a partnership from the Entrepreneurs’ Register.
Deletion from the National Court Register may take place as result of:
- a completion of bankruptcy proceedings – a request to delete from the register is filed by a trustee in bankruptcy
- a completion of a liquidation – a request to delete from the register is filed by liquidators
- termination of a partnership without a liquidation – a request to delete from the register is filed by partners
- transformation (merger, division or transformation) – a register court ex officio deletes a partnership which was a subject to merger, division or transformation based on an entry request of an acquiring partnership or a partnership established due to transformation
- termination ex officio by a register court, for example, due to a failure to submit financial statements despite court’s notices.
