The goal of the liquidation of a GmbH is the termination of the company as it has existed so far. All assets are sold, all debts are paid off and the remaining cash is paid out to the shareholders. A liquidation often comes into question in the event of disagreement among the shareholders about the further economic action of the company. Consequently, a resolution by the shareholders would have to liquidate or even sell the company.

However, a liquidation can also take place on the basis of a court order, by the departure of a shareholder by death, due to a lack of successor or due to insolvency. The process differs from insolvency proceedings, as the company’s obligations can no longer be met. Often, a planned liquidation also results in insolvency proceedings, since, for example, not all creditors or shareholders can be served anymore. Often, however, the latter can no longer be served and thus experience a loss of their deposit with the GmbH. The tax treatment of this fact is also exciting to consider.

In a liquidation, all existing assets are sold. This ultimately achieves the goal of the complete termination of society. However, the processing and dissolution according to § 11 Abs. 1 S. 2 KStG within a period of three calendar years.

Important terms in the liquidation of a GmbH

2.1. Resolution

Civil dissolution is the legal consequence of an effective resolution. However, this does not directly lead to the termination of the corporation. In principle, the dissolution is followed by the liquidation of the company, whereby the shareholders are subsequently paid out their legitimate shares.

2.2.

Since the dissolution alone does not trigger the legal consequences of § 11 KStG, the GmbH is subsequently wound up. The term “resolution” means a company law procedure, the so-called liquidation procedure. The procedure aims at the complete termination of society. Consequently, the procedure also concludes with the repayment of the remaining assets to the shareholders after payment of all debts.

In the event of a liquidation, a resolution to dissolve the shareholders of the GmbH is necessary. This resolution must be in accordance with § 60 Abs. 1 no. 2 GmbHG with a majority of at least three quarters of the votes cast, unless otherwise stated in the statutes. By way of derogation, a higher or a lower majority can also be agreed in the articles of association, but at least a simple majority must be present. In order to protect minority shareholders, the GmbHG regulates under § 61 with the action for dissolution a way out of a company of shareholders, if other ways were prohibited by the majority shareholders.

Furthermore, liquidators, usually the previous legal representatives, are obliged to apply directly for the entry of the dissolution in the commercial register according to § 65 GmbHG. After this, the company must use the abbreviation i. Liquidation (i. L. or i. Abw.) to signal the dissolution company to the outside world. In addition, the resolution must be published in particular in the Federal Gazette. Otherwise, insolvency proceedings would also be conceivable as a possible way of liquidation. Here, the regulations of the insolvency regulations apply.

3.2. Implementation of the liquidation of a GmbH

If the assets of the GmbH are sufficient to service the existing liabilities vis-à-vis third parties, the GmbH can be deleted from the commercial register at the earliest after the expiry of one year, ending their existence. In this context, the call for creditors constitutes an invitation to claim outstanding claims. In addition, any remaining assets will be distributed to the shareholders as liquidation proceeds. However, this is often not sufficient for the liabilities of the company, so that insolvency proceedings must be applied for subsequently.

3.3. Liability after liquidation of a GmbH

In a judgment of 2018, the BGH clarified to what extent outstanding liabilities of the company towards creditors are treated after the liquidation of a company. The liquidator of the GmbH is directly liable to the creditor whose claim was not taken into account in the course of the liquidation. Because in the distribution of the company assets to the shareholders, all liabilities of the company must first be settled.

4th calculation of the liquidation profit

In the following, the special profit determination provision of § 11 KStG will be discussed. The calculation of the liquidation profit in accordance with § 11 Abs. 2 KStG by reconciling settlement final assets and initial settlement assets.

4.1. Initial settlement assets

Consequently, initial settlement assets must be determined. According to § 11 Abs. 1 KStG, the operating assets which existed at the end of the marketing year preceding the dissolution. In this respect, the basis, the book values of the tax balance sheet, is decisive for determining the corporate tax.

4.2. Settlement final assets

Settlement final assets are divided into different stages. The winding-up final assets I according to § 11 para. 3 KStG represents the assets to be distributed. However, tax-free emoluments received by DBAs or pursuant to § 8b KStG during the settlement period must be deducted from this. A calculation is usually made by adding the proceeds of the sale to the share capital and deducting the repayment of the liabilities.

If open or hidden advances are already paid out during the settlement, these are to be added to the previous settlement final assets. This results in the winding-up terminal II.

4.3. Profit from liquidation

The liquidation profit is generated by deducting the initial liquidation assets from the final liquidation assets. However, this is usually only the provisional liquidation profit I. Because the general regulations must still be observed and thus corporate tax advance payments apply according to § 10 no. 2 KStG and business tax advance payments according to § 8 para. 1 KStG i. V. m. § 4 Abs. 5b EStG as not deductible from profit. This usually results in an increased liquidation profit II. Based on this, the corporate tax and the business tax are calculated and then the assets to be distributed are determined.

However, in the distribution of assets according to § 72 GmbHG, which takes place on the basis of the shares in the company, the blocking year must be observed. § 73 Abs. 1 GmbHG stipulates that one year must elapse before a payout occurs.

Although a company has a certain value on the basis of accounted assets, the goodwill usually goes beyond the approaches in the balance sheet. Because many intangible values such as customer relationships, the brand image or even the employees are hardly or not at all depicted. Since these values are usually not redeemed during the liquidation and thus important company assets are irretrievably extinguished, this is very unfavorable. Thus, a company sale would result in a certain mark-up for unrecognised assets.

5.2 Lower costs

On the one hand, an entrepreneur thus has a lower return on liquidation and on the other hand, due to the numerous legal requirements and the blocking year on liquidation, additional costs for balance sheet preparation, commercial register and notary. As a result, the entrepreneur saves himself these further costs in a company sale. However, the costs for the respective operations must be examined on a case-by-case basis.

5.3 Time savings

In addition, another positive aspect that speaks for the company sale is the time required. Since the liquidation lasts at least 12 months from the time of the creditor’s call, however, it can still be significantly prolonged due to complex situations or insolvency. On the other hand, a company sale can be finalized for the seller in the event of restructuring in a few months.

5.4. recovery option

In order to avoid a sale of the GmbH and a liquidation, a company can only be sold in part. This would make room for an investor, which could lead to a restructuring of the company.

Conclusion on the liquidation of a GmbH

A liquidation is a complex process in which various regulations should be observed. Thus, this is only worth considering for an entrepreneur in crisis. In addition, it usually makes the most sense for small companies with few assets. Due to the otherwise very complex process of liquidation, the high costs and the enormous time required for the entrepreneur, the company sale is in most cases to be considered more attractive. However, it can already be seen from the reasons for a liquidation that this usually has to be done rather forced. Thus, at best, it is important to plan the sale early in order not to come under the pressure of a liquidation.