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 overview the process until the time assets are realized, liabilities are settled and business licenses are cancelled.

What is Company Liquidation?

Company liquidation is a legal insolvency process that concludes the operations of a business. When a Company goes through liquidation, its assets are sold to pay off its debts, liabilities, and commitments. Often known as ‘winding down’, the business license of a Company is cancelled upon liquidation, its name is deleted from the Trade Registry, and the firm is considered to have ended.

There can be diverse reasons for liquidation, the major ones are..

  • The expiry of license/ duration stated in the articles of association or the accomplishment of the objective for which the entity was setup
  • 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.

When a firm can no longer pay its debts, it might be dissolved either voluntarily or forcibly by the Authorities. There are two types of Company liquidation methods under the UAE law:

  • Liquidation on a voluntary basis

There are various reasons for a corporation to voluntarily wind up, including the expiration of a defined period, the achievement of the firm’s mission, abandonment of the goals, merging with another firm, ongoing commercial setbacks, and the Company’s failure to afford its obligations.

  • Liquidation on a compulsory or legal basis

The compulsory winding up of a Company relates to the necessary measure taken when a firm commits a major violation of the law or any other legal reasons. It also takes effect when customers submit complaints to government agencies to recover their assets. The Government Authorities then takes steps to dissolve the enterprise forcibly.

Who is a Liquidator?

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 which depends on the type of liquidation as well. Immediately after being appointed, the liquidator will provide a formal letter of acceptance. The liquidator will prepare the liquidators report once all the responsibilities have been performed during the liquidation process.
License Cancellation

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 the Department of Economic Development (DED). Also, clearances need to be acquired from the below-mentioned departments-

  • Ministry of Human Resources and Emiratization
  • Directorate of Residency and Foreigners Affairs
  • The Federal Tax Authority (FTA)
  • The relevant Water and Electricity Authority
  • The leasing entity
Speak to an expert

What are the seven steps involved in Limited Liability Company liquidation in Dubai, UAE?

STEP 1
The foremost process is to ensure that all employees' visa have been cancelled and related clearances are obtained from government authorities in this regard.
STEP 2
The board resolution for de-registration of the Company must be attested by the owners before the Notary of the Court and update in the DED
STEP 3
Place advertisement in newspapers about the liquidation of the Company in both Arabic and English language.
STEP 4
All cancellations with the relevant authorities.
STEP 5
Once the notice period is over, the liquidation report must be prepared by an auditor in Dubai.
STEP 6
The completed Report, along with all supporting evidence and the applicable cancellation payments, should be sent to the relevant Authority, who will evaluate it and, issue the final termination document.
Speak to an expert

What are the six steps involved in the liquidation of a Free Zone Company in the UAE?

STEP 1
Minutes of a board of directors meeting declaring the firm to be liquidated and appointing a regulated liquidator and sending a notification to the regulatory explaining why the Company is being liquidated.
STEP 2
A letter from the registered liquidator declaring the acceptance of responsibility for the Company’s liquidation to be sent to the relevant Free Zone authorities.
STEP 3
Free Zone authorities shall place advertisement in newspapers about the liquidation of the Company in both Arabic and English language.
STEP 4
The Free Zone Authority will grant a 45-day notice period to wait for creditors or clients who have financial claims against the enterprise.
STEP 5
Once the notice period is over, the liquidation report must be prepared by an auditor in UAE and also obtain all clearances from the Free Zone Authority (FZE/FZCo).
STEP 6
Cancel all employee and partner visas, receive NOC from the Ministry of Labour and Ministry of Immigration, and send all documentation to the Free Zone Authority, who will issue a final business liquidation certificate after verifying all of the documents. There are certain things to look into when you decide to liquidate a company. Leaving the task to a professional who provides Company liquidation services will be a wise choice.
Speak to an expert

How can Promptus Global help in Company liquidation in UAE?

Promptus Global through it’s associate (Evas International) has been offering Company liquidation services. As one of the top liquidators in Dubai, we ensure to assist you in the entire process of Company liquidation. The liquidation process of a Company is mostly legal formalities and without the support of a liquidation service provider, it could be tiring and more time-consuming. Our team of Company liquidation experts will guide you in the entire process. We can assist you as a liquidator.

Canceling of licenses and seeking approval from different government authorities will be done by our professionals and will help you attain the liquidation report as soon as possible. Cancellation of the license, advertising in at least two newspapers about the Company’s liquidation, submission of declaration papers at the Department of Economic Development (DED), obtaining objection letter from the partners, cancellation of the partner’s visa, liquidating the assets, can all be via Promptus Global Corporate services. We offer Company liquidation services across the country, and we aim to make things easier for our clients with our expertise.

If you are looking for a Company liquidation process in the UAE, contact us today.

Speak to an expert

Find out why over 700+ entrepreneurs have entrusted their business with us.

promptus
Calculate your business setup cost

We work closely with government entities

promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus
promptus

Take the next
step towards business success in dubai!

Copyright @ Promptus Global Corporate Services

whatsapp