Profitable growth: Strategies for sustainable business success 3

Company liquidation is a hectic task. The liquidation of a company is not just about closing it down; there are many factors to be considered while doing so. The government authorities have to be notified, the business licenses will have to be canceled, assets need to be distributed and the list goes on. The legal formalities included in company liquidation are the most tedious task among them all.

The expiry of license/ duration stated in the articles of incorporation/ association or the accomplishment of the objective for which the entity was set up
The loss of all or a major portion of the entity’s assets
Mergers
Shareholders’ approval that the entity’s term of existence can be brought to an end as per the stipulated majority, etc.
Liquidation on a voluntary basis
Liquidation on a compulsory or legal basis

The person who is in charge of conducting the liquidation process is termed the liquidator. The court or shareholders of an entity appoint a liquidator and it is dependent on the type of liquidation as well. Immediately after being appointed, the liquidator will provide a formal letter of acceptance. They will write a statement of affairs and a liquidator’s report once all of their responsibilities have been performed, which are required to perform the liquidation procedure.

License cancellation is one of the primary steps in the liquidation process, and the formalities differ based on the form of company. In the case of establishments and sole proprietorships, you will have to apply for cancellation through DED. Also, clearances need to be acquired from the below-mentioned departments-

Ministry of Human Resources and Emiratisation
Directorate of Residency and Foreigners Affairs
The relevant water and electricity authority
The leasing entity

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June 29, 2023