Liabilities free companies
Liabilities free companies are ready-made companies that have been checked for any kind of legal, financial or tax liabilities. They are free from any liabilities for third-party entities or tax bureaus. Acquisition of such entity is one of the quickest ways of starting a business. Verification of tax liabilities is quite easy and leaves no doubt for the buyer.
Buying a company that was previously run by someone else you have to perform due diligence. This recognizes it’s financial state and what liabilities it might have. The best solution is to buy a company that was in the market for a long time. Another criterion is to make sure that the company was held by the seller for at least 3 years. This means that all the liabilities are after their period of prescription.
One of the main criteria is the responsibility for the company’s liabilities by the board of the directors and equity partners. If in certain legal system board of the directors is responsible for the company’s liabilities. making sure that the company is liability free becomes a priority in such cases. The situation is quite easy when a company was incorporated with the sole reason to be sold. But in case that it was previously operated making sure that it has no liabilities to third parties is a must.
Board of Directors responsibility – liability free companies
In the case of Polish Limited Liability Company (spółka z o.o.) the board of directors holds a subsidiary responsible for the company’s debts. This responsibility is unlimited. For liabilities that the board of the directors is being held responsible, are not only the ones that have been created while performing their function but also before that period. In this case, the member of the board takes responsibility for decisions of previous directors. By liabilities, we understand here any commitment to contractors but also unpaid taxes.
In some cases, a company had a number of board members for a time period. Their responsibility becomes joint and several. Their responsibility ends by the day they resign their position. These rules are mandatory and cannot be switched off by any agreement between the board members and the partners. Board of directors responsibility can be canceled in some cases.
One of the methods for canceling the board’s personal responsibility is filing for bankruptcy. Motion for bankruptcy has to lodged within 2 weeks from the moment the director of the board has received any information about the company’s insolvency. The basis for the bankruptcy motion is the information about the possibility of the company’s insolvency. In case that the board does not file for bankruptcy, a member of the board can demonstrate that the lack of this motion was without his own fault. Another way of canceling ones responsibility is proving that the creditors would not receive their paybacks. In such a case, there is no damage.