Reorganization and Liquidation of Companies in Azerbaijan

April 7, 20240

Over the last few years, we have witnessed a significant increase in the number of foreign business people registering their companies in Azerbaijan compared to the recent past. We can confidently emphasize that, at the same time, there has been a parallel increase in applications related to the reorganization, liquidation, or bankruptcy of companies in Azerbaijan. With this blog post, we will focus on the practical legal aspects of reorganization, liquidation, or bankruptcy of business entities in Azerbaijan.

We hope this blog post will be informative for those planning to reorganize, liquidate, or declare bankruptcy for their business entities operating in Azerbaijan. Furthermore, if you require consulting and legal services regarding the process of reorganization or liquidation of a company in Azerbaijan, remember that you can apply for DLB Consulting’s services.

Reorganization of the Legal Entities in Azerbaijan

According to the Legislation of the Republic of Azerbaijan, reorganization of a legal entity refers restructuring of its operations in various forms.The reorganization of a business can be initiated either by the decision of its founders or by an authority as stipulated in the entity’s charter. Furthermore, it is important to understand that, in cases specified by law, the separation or reorganization of a business entity in the form of separation of several legal entities is carried out by a court decision. According to the Law there are the following forms of the reorganization of companies in Azerbaijan:

Accession;
Merger;
Transformation;
Division;
Separation.

Liquidation of a Companies in Azerbaijan

The liquidation of a company in Azerbaijan means the termination of its existence and activity, without transferring its rights and obligations to other business entities or individuals. It’s important to note that the legal process for liquidation of business entities are regulated by the Civil Code of the Republic of Azerbaijan.

According to the legislation, companies operating in Azerbaijan can be liquidated in the following cases:

Based on a court decision, the company’s registration is invalidated due to violations of the law committed during the registration of the company;
In connection with the expiration of the term intended for the existence of a legal entity or the achievement of the goal set at the time of its creation;
On the basis of the court’s decision regarding illegal business activities;
Due to the bankruptcy of a business entity operating in Azerbaijan etc.

The Bankruptcy of Companies Operating in Azerbaijan

According to the legislation, if a company operating in Azerbaijan fails to meet the demands of its creditors, it can be declared bankrupt by the court’s decision. As mentioned, business entities in Azerbaijan can only be declared bankrupt based on a court decision. The laws of the Republic of Azerbaijan ‘On Insolvency and Bankruptcy’ and ‘On Banks’ respectively determine the grounds and procedure for declaring a company bankrupt.

Legal services related to reorganization, liquidation and bankruptcy of the company in Azerbaijan

In conclusion, if you need legal assistance with reorganization, liquidation or a bankruptcy of a business entity operating in Azerbaijan, feel free to contact DLB Consulting. We would be happy to provide you with our legal services and to welcome you among our valued clients.

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