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Accounting during liquidation of limited companies

Managing accounting and tax returns in liquidation. When the company has gone into liquidation, the liquidator represents the company. This means that the liquidator is responsible for signing and submitting documents such as tax returns and income statements.

Company accounts

Until a liquidator has been appointed, the company's board is responsible for the company's accounts. When the liquidator takes up his duties, the company's board shall draw up a statement of accounts which may serve as a basis for the liquidator's further accounting.

As long as the company is registered with the Companies Registration Office, the liquidator must submit income tax returns for the company. This is the case even if the liquidator has filed for deregistration for VAT, employer's contributions and F-tax to the Tax Agency.

Reversal of funds

The company shall reverse previous provisions to tax allocation reserve when a decision has been made that the company will enter into liquidation. If the company has a compensation fund, it should normally be reversed at the same time. This means that the reversals affect the balance sheet drawn up when the liquidator takes office.

Final statement of accounts

When the distribution is complete, the liquidator makes a statement of this, known as the deed of distribution. The document shows the company's liabilities and assets. Once the distribution is complete, a final statement of accounts must be considered at an annual meeting of shareholders and submitted to the Swedish Companies Registration Office. With the submission of the final statement of accounts, the company is considered dissolved.

Partner accounts

When your company enters liquidation, you are deemed to have sold your shares in the company and you, as a partner, must calculate a capital gain or capital loss for your shares.

Any profit shall be taxed if the amount of the gain can be calculated with sufficient certainty. If, instead, a loss has been incurred, deductions are only allowed when the loss is definitive, i.e., normally when the liquidation is concluded.

The value of the property that you as a partner receive on liquidation is your compensation for the shares. Funds are not normally paid out until the liquidator has drawn up a deed of distribution at the end of the liquidation. Calculation of capital gains shall be made as your compensation becomes known in its amount, regardless of whether actual payment of compensation has been made to you or not. There will be no taxation of capital gains if known compensation is less than your expenses for the shares.

Most often, you do not know at the time of the liquidation decision what your compensation for the shares will be, but your compensation will be known gradually during the liquidation. In this case, you should use the rules on additional purchase price to calculate the capital gain/loss for the shares. The calculation shall be made in accordance with the rules in force when the liquidation was decided.

Tax account

The company tax account remains in place even after the company has been liquidated. In order for the company not to receive a tax statement, the balance on the account be zero.

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