A new amendment to the Commercial Code, effective from October 1, 2020, makes the process of liquidation of business entities more regulated and formalized. As a result, the whole liquidation process should become more effective.

Some of the novelties under the new legal regime are:

(i) the company enters into liquidation upon registration of the liquidator in the Commercial Register;

(ii) it is mandatory to pay a deposit into a notary’s trust account (which can only be used to pay the liquidator’s remuneration and expenses);

(iii) additional documents need to be prepared and several additional filings need to be made.

In the case a company registered its liquidator in the Commercial Register before September 30, 2020 and its liquidation had not been finalized by that date, the company is allowed to complete its liquidation in accordance with the previous legislation. However, there will be an additional requirement for the liquidator to deposit in the Collection of Deeds, by December 31, 2020, a list of the company’s assets prepared according to the state of the assets as at September 30, 2020. If this requirement is not fulfilled, the company will be considered bankrupt.

The new legal regime also elaborates and sets out detailed rules of the so-called “supplementary liquidation”, i.e., a liquidation process that is used in the case additional assets of the company are identified following the erasure of the company from the Commercial Register.