In accordance with the Law of Turkmenistan on Enterprises, an enterprise is an independent economic entity created to produce products, sell goods, perform work and provide services in order to meet the needs of society and make a profit.
The procedure of distributing assets upon liquidation of an enterprise
During the liquidation of the enterprise claims of its creditors are satisfied in the following order of priority:
- in the first turn – the claims of citizens, before whom the liquidated enterprise is responsible for causing harm to life or health, are satisfied;
- in the second turn – settlements on payments of severance pay and labor remuneration to persons working at the enterprise under an employment agreement (contract), as well as on remuneration under copyright contracts;
- in the third turn – satisfaction of creditors' claims on obligations secured by a pledge of the enterprise's assets in liquidation;
- in the fourth turn – the indebtedness on mandatory tax and other payments to the state and local authorities, as well as the indebtedness on bank loans are satisfied;
- in the fifth turn – settlements with other creditors.
Claims of each queue are satisfied after the full satisfaction of the claims of the previous queue.
The assets of the liquidated enterprise remaining after the satisfaction of creditors' claims is transferred to its participants, who have proprietary rights to the assets or rights of obligation with regard to the enterprise.
Liquidation due to insolvency (bankruptcy) of an enterprise
The grounds for declaring an enterprise bankrupt by a court or declaring its bankruptcy, as well as the procedure for liquidating such an enterprise are established by the Law of Turkmenistan on Bankruptcy.
Source: Law of Turkmenistan on Enterprises