As business projects may don’t always go as planned, foreign executives might want to liquidate a company in Guatemala. In some cases, this decision can be due to reasons related to the market conditions, product demand or political environment.
However, regardless of the reason why you decide to exit the market, you must follow a formal liquidation process.
Steps to liquidate a company in Guatemala
1. Inscription of dissolution agreement
The first step to liquidate a company in Guatemala is to sign a dissolution agreement. In this step, the General Assembly of Shareholders meets to hold an Extraordinary General Meeting of Shareholders, where they make the decision to dissolve and liquidate the company.
At this point, a liquidator and a special executor will be appointed. The latter will be in charge of carrying out the dissolution process and undertaking other essential tasks, such as:
- Formalize the agreements made by the General Assembly of Shareholders.
- Grant the deed of dissolution of the company and register it before the Mercantile Registry of Guatemala.
- Carry out any other activity agreed by the Shareholders Assembly.
Both the dissolution agreement and the appointment of the special executor must be registered at the Mercantile Registry of Guatemala.
2. Company dissolution deed
The next step to liquidate a company in Guatemala is to grant the dissolution deed. To do this, you must go to a notary public in Guatemala, who will be responsible for preparing the company’s public deed of dissolution. Then, you must go to the Mercantile Registry again to proceed with the registration of the said public deed.
3. Liquidator registration
The next step is to register the liquidator appointment through a notary public. Note that you must submit this registration at the Superintendency of Tax Administration of Guatemala (SAT).
4. Final balance sheet
Once the previous steps have been completed, you have to prepare the dissolution’s financial statements, also known as the final balance sheet to liquidate a company in Guatemala. During this process, you must seek the assistance of a local and trusted public accountant.
When the final balance sheet is ready, you must proceed to request the edicts before the Mercantile Registry for publication. Note that these financial statements must be approved by the general shareholders.
After this process, you must submit the final balance sheet and a memorandum of cancellation before the Guatemalan Mercantile Registry. Likewise, you will have to pay the corresponding fees to register the minutes of the General Shareholders’ Meeting, where everything done so far is recorded. In the end, you will obtain the definitive registration certificate of the company’s dissolution.
5. Cancellation of company patent
The cancellation of the company patent is the next step for the liquidation of a company in Guatemala. The company patent is the equivalent of what in other countries is known as the company registration or trade license, which allows the company to carry out economic or commercial activities in the country. This license has to be renewed every year.
To request its cancellation, you will need the help of a notary public to whom you must present the cancellation memorandum. At this point, you should also pay for the publication of the edicts related to the liquidation of the company. Once the company patent cancellation is published and registered, you will obtain the patent cancellation certificate, which formalizes the process of dissolution and liquidation of the company.
6. Final registration of settlement at the SAT
Once the process to liquidate a company in Guatemala is completed, you must submit all the documents that you presented to the Guatemalan Mercantile Registry -including the accounting and legal books of the company- before the SAT. Once the SAT review and approve all these documents, it will issue a certificate of cessation of activities.
Biz Latin Hub provide you with expert advice to liquidate a company in Guatemala
The process of dissolution and liquidation of a company in Guatemala is complex and requires the support of expert legal and accounting professionals. Not having the correct advice can lead to fines or delays in the completion of this process.
With our full suite of bilingual market entry and back-office services, we can ensure you meet all the necessary requirements to liquidate your company in Guatemala. We will guide you through the liquidation of your company while complying with all the local regulations. Contact us today for more information on how to liquidate your company in Guatemala.
Learn more about our team and expert authors.