The company has been deregistered but money is left in its account — what can be done

The answer is unwelcome, but it is clear. Article 2.95(3) of the Civil Code (CK) provides that a legal entity ceases to exist from the moment it is deregistered from the Register of Legal Entities. The company is gone, and there is no way to put it back on the register so that it can deal with the remaining funds itself. The money does not disappear — it is left without an owner able to dispose of it. The law provides no separate administrative procedure for recovering such assets. In practice, you have to go to court.

Why you cannot simply turn everything back

Article 2.95(1) CK provides that legal entities cease to exist by way of liquidation or reorganisation. The liquidation has already taken place and was completed by an entry in the register. The law provides no mechanism by which a legal entity that has ceased to exist could be “revived” because something was left undone. So when you approach a bank, another legal entity or the State Tax Inspectorate (VMI) with the details of a company that has ceased to exist, they are right to answer that this client no longer exists.

This is not a formality that can be got round with a request. It is the very essence of the end of the process.

Who the assets belong to

Here the law gives a clear answer. Article 73(13) of the Law on Companies (ABĮ) provides that the remaining assets of a company in liquidation are distributed among the shareholders in proportion to the nominal value of the shares they own, and that company assets discovered later are distributed in the same way.

Note what this provision says and what it does not. It says to whom the assets belong and in what proportions they are distributed. It does not say how a shareholder gets access to them once the company in whose name the account was opened is no longer on the register. It is precisely this second answer that the law does not contain.

This is a gap in the legal framework, not a service we have invented. We say so openly, because clients often suspect that the process is being made artificially complicated.

What you have to do in practice

In practice, there has been more than one case in which assets came to light only after deregistration. The route was the same every time: apply to the court for recognition of the shareholders’ ownership of those specific assets. With the court judgment in hand, the shareholder can approach the bank or other holder of the assets, because the shareholder is now acting in their own name, not in the name of a company that has ceased to exist.

In one case, the “assets” were not money in an account but shares in another company, whose owner was recorded in the register as the already deregistered company. The situation seemed impossible to resolve, because the list of shareholders showed a legal entity that no longer existed, and nobody could either sell or transfer those shares. The route was the same — a court judgment recognising ownership. But the process took time and cost more than a check before liquidation would have cost.

It is worth keeping a sense of proportion. Court proceedings over a few hundred euros in an account cost more than those few hundred euros. So the first question we ask is not “how do we recover it” but “how much is there”. Sometimes the honest answer is that it is not worth recovering, and that is an answer too.

How to avoid it — a check before you start

This problem can almost always be avoided, and doing so costs a few hours, not court proceedings.

Before starting liquidation, it is worth checking separately whether there are any:

• forgotten bank accounts, including old accounts or accounts in another currency;
• security deposits — for rent, utilities, customs;
• overpayments to the VMI or to the State Social Insurance Fund (Sodra);
• shares or holdings in other companies;
• unclaimed deposits, guarantees or advance payments under terminated contracts.

Each of these is missed for its own reason, and the reasons keep recurring.

Old accounts do not appear in the accounting records if they have not been used for years and the balance is small. The accountant works with the account through which the turnover passes and simply does not know about the others.

Security deposits are paid at the start of a process and then no longer thought about, because they are neither income nor expense. A rent deposit paid five years ago is remembered only when someone asks for it to be returned.

Overpayments to the VMI or Sodra are visible in the electronic system, but not in the company’s account balance. If nobody looks for them deliberately, they simply stay there.

Shares or holdings in other companies are the hardest case, because they do not move and generate no documents. A company can be a member of another legal entity for ten years without a single letter mentioning it in all that time.

The right moment for the check is in the middle of the process, not at the end. Article 73(14) ABĮ provides that the company’s assets may be distributed to the shareholders no earlier than 2 months after the actions specified in the law have been completed. Those two months are free time in which the check can be done without holding anything up. In practice, it is usually skipped, because by then everyone already considers the process finished.

The law does not require such a check. It is a rule from our practice, which grew out of the cases described above.

How to start

If the company has already been deregistered, write to us saying what assets are left and roughly what they are worth. We will tell you whether court proceedings would pay off. If liquidation is still only being planned, we carry out the check before you start. The first assessment is free of charge.

Tel. +370 5 212 1506, email info@linden.lt

More about this service: liquidation of companies.