Liquidation of an Association

The liquidation of an association consists in completely ending its existing activity, satisfying (or securing) the claims of creditors, disposing of the association's property and deleting it from the National Court Register (KRS).

The activity of an association may end in three ways: i) on the basis of its own resolution adopted by the General Meeting of Members (walne zebranie członków) of the association, ii) on the basis of a court decision dissolving the association, or iii) on the basis of Article 25a of the National Court Register Act.

The registry court opens proceedings of its own motion to dissolve an entity without conducting liquidation proceedings where one of the grounds set out in the Act is met (for example, where the financial statements for the last 2 years have not been filed despite a request from the registry court). The same applies where a court dissolves an association at the request of the supervisory authority. The Law on Associations specifies two grounds: i) an insufficient number of members of the association or ii) the absence of the authorities required by the Act. An association may, by contrast, dissolve itself at any point in its activity, regardless of whether any grounds are met. An association is a voluntary organisation, so the meeting of its members may always decide on self-dissolution for any reason.

The Law Firm assists in the liquidation of an association by:

1. analysing the legal situation and the statute of the association;
2. discussing the individual stages of liquidation;
3. preparing the documents needed for the meeting of the association's members (that is, notices of the meeting, minutes of the meeting, a resolution opening the liquidation of the association, a resolution on the allocation of property and a resolution appointing the liquidators);
4. filing notification of the opening of the association's liquidation with the KRS;
5. preparing the documents needed for the meeting of the association's members after the liquidator has completed the liquidation activities;
6. filing an application to delete the association from the KRS.

How Do Liquidation Proceedings Work and What Are Their Individual Steps?

1. the Management Board of the Association convenes the Meeting,
2. adoption of resolutions on: dissolution of the Association by the Meeting (the resolution should state the reasons for dissolving the association and the date of dissolution), appointment of the liquidator (liquidators) and allocation of the association's assets (for the purposes indicated in the statute);
3. the liquidator notifies the registry court of the opening of the liquidation;
4. the liquidator publishes an announcement of the association's liquidation;
5. the liquidator carries out the liquidation activities and liquidates the association's assets;
6. convening a meeting of the association's members, which approves the liquidator's report (the liquidator convenes the meeting after completing the liquidation activities);
7. filing an application to delete the association from the KRS.

See also: Assistance with setting up a foundation (in Polish)

What Does a Resolution on the Liquidation of an Association Contain?

The resolution on the dissolution of an association is adopted at a meeting of the association's members. The statute of the association may contain quorum and qualified majority requirements for adopting the resolution. The resolution should state the reasons for dissolving the association and the date of dissolution, and should also identify the liquidator (liquidators) and the allocation of the association's assets. Under Article 38 of the Law on Associations, the assets of a liquidated association are transferred for the purpose specified in the statute.

Who Becomes the Liquidator?

Under Article 36(1) of the Law on Associations, where an association dissolves itself on the basis of its own resolution, the liquidators of the association are the members of its management board, unless the statute or, in the absence of relevant statute provisions, a resolution of the last General Meeting of Members (meeting of delegates) of that association provides otherwise. This means that, under the Act, the liquidators of an association may be the members of the management board or persons appointed in a resolution of the last General Meeting of Members (meeting of delegates), unless the statute provides otherwise. The statute of an association may introduce special provisions on this matter.

See also: Company transformations (in Polish)

What Are the Liquidator's Duties?

The liquidator's duties follow from Article 37 of the Law on Associations. Among other things, the liquidator:

• should notify the court of the opening of the liquidation and the appointment of the liquidator, giving their surname, first name and place of residence;
• performs the legal acts necessary to carry out the liquidation, making the opening of the liquidation proceedings publicly known;
• after the liquidation is completed, files an application with the court to delete the association from the National Court Register.