Issues in the acquisition of liquidator’s authority in non-bankruptcy liquidation of commercial entities

This article examines the legal framework governing the moment when a liquidator’s authority arises in the general liquidation process (liquidation procedure) that is not associated with bankruptcy. The study identifies challenges related to the exercise of these powers and proposes solutions to address them. Special attention is given to the issues arising from the obligation of the court to appoint a liquidation commission in cases of compulsory liquidation. The article argues that in such instances, the entity that initiated the legal action for the forced liquidation of a legal entity should be recognized as the liquidator. A revised approach to defining the moment when the liquidator’s authority comes into effect is proposed. The author highlights that the current wording of Part 4 of Article 105 of the Civil Code of Ukraine, which establishes that the liquidator’s authority begins at the moment a decision on the liquidation of a legal entity is made, no longer aligns with the modern legal framework. The introduction of a state registration system for changes in the status of legal entities necessitates a shift in this approach. It is suggested that the liquidator’s authority should commence only upon the entry of relevant information into the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Organizations. Until the liquidation procedure is formally recorded in the Register, there is no need to grant the liquidator representative authority, as the current legal system does not recognize them as an official representative in external relations. The article also critiques the inefficiency of retaining the three-business-day deadline for submitting a decision on the termination of a legal entity for state registration, as stipulated in Part 1 of Article 105 of the Civil Code of Ukraine. If the moment of acquiring liquidator authority is defined as the day the relevant information is entered into the official register, then the decision to terminate a legal entity will have no legal significance for third parties. The establishment of this deadline only creates unnecessary complications during the registration phase of liquidation decisions. Moreover, the study notes the disproportionate consequences established by law for missing this deadline—namely, the refusal to register the liquidation decision. The analysis emphasizes the substantial disparity between the formal requirement to comply with the three-day period and the severe consequence of prohibiting both private and public interests from proceeding with the liquidation of a legal entity.