The UAE is a thriving business region with loads of business hubs and free zones that promote business activities. Liquidation In a place that is so favorable for business, new companies are always being formed. But this doesn’t mean that every company in the UAE becomes successful. A failing business can quickly turn into a liability for its owner.
Liquidation of the company in Dubai takes a long time. Company liquidation in Dubai may be a time-consuming and challenging process. Still, our knowledgeable liquidators in Dubai, UAE can simplify all legal procedures and assist you with the Liquidation of your business. The proceeds are used to repay debts, cover expenses, and distribute any residual excess to the company’s owners.
What is Company Liquidation ?
Company liquidation means when a free zone company or LLC company stops all activities and winds up the company, and all assets are divided among creditors and shareholders. The process of dissolving a business is known as ‘liquidation’ or ‘dissolution.’
Types of Liquidations :
There are two main kinds of liquidation,
- Compulsory Liquidations
If a business’s obligations are not paid on time, , creditors can ask the courts to dissolve it so that they can get their money. In order to pay off existing debts, the courts may compel a firm to liquidate and dispose its assets.
- Voluntary Liquidations
A business’s shareholders may decide to liquidate a solvent corporation, or the directors of an insolvent company may choose to halt further trade and liquidate its assets to pay its creditors. When a firm’s owner determines that the company has no point in keep functioning, such a choice will be made.
Liquidation Notice Period :
The government grants businesses a notice period in which they can cater to any debts. The notice period has a limited duration of 45 days. Before you begin the process, it is best to have all essential tasks (related to your business and your employees) taken care.
Liquidators in Dubai :
A liquidator is a UAE-registered agency or firm, usually an accounting or audit company, that is tasked with selling the company’s assets in order to earn cash and pay off any remaining debts. Immediately after being chosen, the liquidators in Dubai will provide a formal letter of acceptance. They will write a statement of affairs and a liquidator’s reports until all of their responsibilities have been fulfilled, which are necessary to finish the liquidation proceedings.
The following are the list of responsibilities that the liquidator should fulfill.
- Evaluate the company’s assets and liabilities. A Liquidator will be responsible for dividing the company’s residual earnings from the asset sale.
- Provide information to the company’s creditors on a regular basis.
- Ensure that business assets are collected and distributed properly.
- Prepare the statement of affairs and the final liquidators’ report.
Company Liquidation Process :
In order to preserve compliance, it is critical for a company to execute all of the stages associated with company liquidation in Dubai. The liquidation procedure will differ depending on the three conditions listed below:
- Ownership Structure
- The Liquidation Method
- Registration in Jurisdictions
The following are the process for company liquidation :
- Obtain necessary document justifies the Liquidation
- Hire a liquidation services firm (Liquidators)
- Notify Company Trade license issuing authorities of the Liquidation
- Cancel all the corporate documents
- Publication of Liquidation Report by Liquidator
- Issuance of Certification of De-Registration
Documents Required :
As the Dubai government specifies, there are different sorts of documentation must be presented for the liquidation procedure. These documents are required for the liquidation of companies in both Mainland and Free Zones. The following papers are necessary for company liquidation in Dubai:
- Copy of the license
- Copy of the Memorandum of Association (MOA), with any modification
- Power of Attorney (if any)
- Copies of all shareholder’s passports
- Copy of your Emirates ID
- Shareholders Resolution
- De-registration Application
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