THINGS YOU MUST KNOW ABOUT COMPANY LIQUIDATION IN UAE

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The process by which a company's existence is ended is referred to as company liquidation, de-registration, or dissolution. It is sometimes referred to as a formal insolvency procedure that aids in the winding up, cancellation, or closure of a business. All of a company's assets will be liquidated or sold throughout this process for the gain of the shareholders and the business. In addition, any major profits are divided between creditors and shareholders according to their percentage ownership of the company. A company's business activity will end once it is deregistered or liquidated.

TYPES OF COMPANY LIQUIDATION IN UAE

In the UAE, there are primarily 2 forms of liquidation. They are:

Voluntary Liquidation
Compulsory Liquidation

VOLUNTARY LIQUIDATION

Companies may choose to liquidate themselves voluntarily. By adopting a legitimate shareholder's resolution, this will proceed at the direction of the company's shareholders or creditors. The appointment of the official liquidator shall be made at the shareholders' meeting. Consequently, the Dubai Trade Register/Dubai Economic Dept. must receive a copy of the shareholders' decision, a statement designating a liquidator and requesting liquidation, certified copies of the business's directors and the liquidator attesting liquidation, the registration certificate for the firm, its trade licence, and the liquidator's licence with the letter of acceptance.

COMPULSORY LIQUIDATION

In this kind of liquidation, the company must liquidate because it is unable to pay its debts and expenses. In situations where the company's obligations are not paid on schedule, creditors may ask a court to liquidate the business so they can get reimbursed. The corporation could then be ordered by the court to liquidate in order to pay off its creditors.

BUSINESS LIQUIDATION SERVICE IN UAE

In the UAE, the process by which a business must cease all of its commercial operations is referred to as a business liquidation service. When a company's activities are deemed to be unsustainable, they must be shut down. There are several situations that could lead to this, some of which are listed below.

The company lacks the capital or liquidity necessary to survive.
The company is having trouble paying its creditors.
No revenue or business is being produced by the company.
The company's resources have been used up.

LIQUIDATION AUDITING

Any company that is closing down a business has a crucial responsibility to carry out liquidation auditing. All of the company's assets will be examined by auditors, who will also create a list of them. Additionally, it will help in locating the company's outstanding obligations and creating a report on them.

The business centre of the United Arab Emirates moves quickly, is thriving, and is always changing. Changes occur frequently in today's competitive corporate environment. Every struggling business that is close to dissolving must go through company liquidation in Dubai.

The process of liquidating a firm is lengthy and requires a great deal of formality. It is impossible to finish the liquidation procedure alone and requires support because one must work closely with governmental and regulatory authorities and agencies. Due to unforeseeable circumstances and the advent of new economic problems, the company must be liquidated. It is best to engage the assistance of qualified professionals because Dubai's business liquidation process is difficult.

COMPANY LIQUIDATION PROCESS

The stages of company liquidation in Dubai or the rest of the UAE are as follows:

Creating and approving a resolution for the shareholders' dissolution. A Notary Public must certify the decision in the case of Limited Liability Companies (LLCs) established in the UAE. If the shareholders are not in the UAE, the resolution must first be attested by the UAE Ministry of Foreign Affairs and Ministry of Justice, then attested and certified at the appropriate UAE embassy.
The appointment of a liquidator and receipt of a formal acceptance letter from the liquidator.
A notice of liquidation in both English and Arabic may be published in a public newspaper by the company after getting a provisional liquidation certificate.
Submission of the shareholders' resolution along with all required papers and payments to the relevant licensing body.
A liquidation report should be created and delivered to the appropriate licensing authority by the appointed liquidator.

A liquidation certificate declaring the completion of the liquidation and closure of the firm will be issued by the appropriate licensing authority following the completion of the liquidation procedure and submission of the liquidation report by the liquidator.

Businesses are given a notice period by the government during which they can pay off any liabilities. The notice period is only allowed to last 45 days. It is essential to finish all necessary procedures before starting the process. Along with gathering all necessary paperwork, the following tasks also need to be finished: