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Procedures to be Followed for the Dissolution of Legal and Natural Persons

Procedures for the Dissolution of Legal Entities

Regulatory Documents:

The procedure for dissolving commercial and public legal entities (hereinafter – legal entities) is regulated by the provisions of the Civil Code and the Tax Code of the Republic of Azerbaijan, the Law of the Republic of Azerbaijan “On State Registration and State Register of Legal Entities,” and the “Rules on Deregistration of Commercial Entities and Taxpayer Registration with State Tax Authorities.”

Application Form:

Paper-based (submitted in person or by mail).

Tax Authority Where the Application is Submitted:

According to territorial jurisdiction, the Department for State Registration of Commercial Legal Entities of the State Tax Service of the Nakhchivan Autonomous Republic, the Department for State Registration of Legal Entities of the Main Department of National Revenues of the State Tax Service, and taxpayer service centers located in administrative buildings of the Territorial Tax Departments (excluding financial-industrial groups, banks, investment funds, insurance, and audit organizations).

Grounds for Dissolution of a Legal Entity:

According to Article 59 of the Civil Code, a legal entity may be dissolved in the following cases:

  • By decision of its founders or the authorized body stipulated in its charter;

  • If the registration of the legal entity is declared invalid by the court due to violations of the legislation at the time of its establishment;

  • If declared bankrupt.

Documents Submitted to the Registration Authority for Entering the Legal Entity in the “Dissolution Process” Status in the State Register:

Within 15 days from the date the liquidation commission (liquidator) is appointed, the following documents must be submitted to the registration authority:

  • Application (“Application for Deregistration from State Registration (Tax Accounting)”);

  • Decision on liquidation;

  • Official statement confirming solvency;

  • Document confirming publication of the initial notice on liquidation and creditors’ claims procedures and deadlines (not less than 60 days) in a mass media publication;

  • Seal.

If the legal entity is declared bankrupt, a court decision on bankruptcy or the creditors’ initial meeting decision declaring bankruptcy must be submitted.

If the submitted documents comply with the law, the registration authority shall enter the note “in the dissolution process” into the State Register within 5 days, register the liquidation commission members or liquidator as the legal representatives, and provide an extract from the register. From that moment on, the legal entity uses a seal marked “in the dissolution process” and adds the phrase “in the dissolution process” after its name on all documents.

Checks and Notifications at the Time of Application Acceptance:

The following should be checked and reported regarding the legal entity being deregistered in the taxpayer database:

  • Existence of legal entities created by the deregistered legal entity as a founder;

  • Whether the legal entity is registered for VAT purposes;

  • Presence of branches, representative offices, or other business units of the legal entity in the tax accounting;

  • Registration of cash registers at the business units of the legal entity;

  • Registration of POS terminals at the business units of the legal entity;

  • Existence of active bank accounts;

  • Tax debts to the state budget;

  • Submission of all required declarations/reports.

If any issues are found, the legal entity must take necessary actions to resolve them (submit closure applications for active accounting units, submit outstanding tax declarations, pay tax debts, etc.).

Documents Submitted to Deregister the Legal Entity from the State Register:

Within 10 days after the distribution or use of remaining property, the liquidation commission (liquidator) submits the following to the relevant executive authority:

  • Liquidation balance sheet;

  • Report on distribution/use of remaining property and documents confirming settlement with participants (acts, bank payment statements, etc.);

  • Original registration certificate and charter bearing the “in the dissolution process” seal;

  • For joint-stock companies, a certificate from the Financial Market Supervisory Authority regarding withdrawal of shares from circulation.

If the documents meet legal requirements, the registration authority shall remove the legal entity from the State Register within 7 days from receipt of the documents.

Duration of the Legal Entity’s Dissolution Process:

The total duration of the dissolution process shall not exceed one year from the moment the legal entity’s status “in the dissolution process” is entered into the State Register. If the period expires, the process must restart, with the note removed from the register and documents returned to the liquidation commission with a notification.

Note: The dissolution procedures for branches or representative offices of foreign legal entities follow the same rules as commercial and public legal entities, according to the Civil Code and Law on State Registration.

Procedures for the Deregistration of Natural Persons

Regulatory Documents:

Tax Code of the Republic of Azerbaijan, “Rules on Registration, Re-registration and Deregistration of Natural Persons for Tax Purposes,” and “Rules on Deregistration of Commercial Entities and Taxpayers with State Tax Authorities.”

Application Form:

Paper-based (submitted in person or by mail) or electronic.

The application form is determined by the Ministry of Taxes of Azerbaijan.

Applications must be signed and submitted only by the natural person, their authorized representative (with notarized power of attorney), or heir (guardian or custodian).

Paper applications are submitted in person to the tax authority where the person is registered or by mail. Electronic applications are submitted via the Internet Tax Service portal (www.taxes.gov.az).

Grounds for Deregistration of a Natural Person:

According to Article 34.7.3 of the Tax Code, deregistration is possible in the following cases:

  • The natural person ceases activities;

  • The person is declared deceased, missing, or incapacitated by a court;

  • The natural person passes away.

Required Documents:

  • If activities cease: Application for deregistration and original tax registration certificate (if issued);

  • If deceased, missing, or incapacitated: Court decision and original tax registration certificate;

  • If deceased: Death certificate and original tax registration certificate.

When submitting electronically, the original tax certificate must be handed over before deregistration.

If the certificate of entrepreneurial registration is lost, the natural person or their authorized representative must inform the tax authority. If no heir exists and the certificate is lost, it is not required to submit the certificate for deregistration.

Checks and Notifications at the Time of Application Acceptance:

The following must be checked and notified regarding the deregistered person in the tax database:

  • Submission of applications for deregistration from VAT;

  • Deregistration of business units/objects;

  • Deregistration of registered cash registers;

  • Deregistration of POS terminals;

  • Closure of active bank accounts;

  • Payment of tax debts to the state budget;

  • Submission of outstanding declarations/reports.

If any of these issues are detected, the natural person must take necessary measures (submit applications for closure of accounting units, submit outstanding declarations, pay tax debts).

Result:

Following the completion of all necessary procedures (closing bank accounts, deregistering cash registers and business units, paying tax debts, submitting outstanding declarations, completing any final tax audits), the natural person is deregistered from the tax records.