Liquidation Services in Dubai, UAE
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 cancelled, 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.
There can be diverse reasons for liquidation, the major ones are;
- 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
- Shareholders’ approval that the entity’s term of existence can be brought to an end as per stipulated majority, etc.
- When the company fails to pay the debts and dues, the creditors file a suit in the court demanding the liquidation of the company. If the company is not able to pay the dues within the date issued by the court, the company’s accounts will be frozen and the assets will be liquidated and divided among the creditors.
In the case of voluntary liquidation, when the company fails to pay its debt, the directors, owners, and shareholders will take a unanimous decision to liquidate the company. The r-process will be handled by the liquidator necessarily appointed by the shareholders.GSPU have been offering company liquidation services for over a decade. Being 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 and as a liquidation service provider.
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 done by us. We offer company liquidation services across the country and we aim to make things easier for our clients with our prowess. With our extensive experience in offering company liquidation services, we have been able to keep our relationship with the government authorities and agencies alive, which will make things a lot easier.
Company liquidation may be of the following two types:1. Voluntary Liquidation
In the case of voluntary liquidation, the shareholders of a company will decide to wind up the company as they have no money to pay for creditors. In this type of liquidation, priority is given to the creditors.2. Compulsory Liquidation
Compulsory liquidation is a type of company liquidation that is put forward by court order. Here, the assets of the company are distributed to the creditors and contributors based on the priority of claims.
A liquidator is a chief decision-maker in a liquidation process. The duties of a liquidator are as below:1. Initiating the Winding-Up Process
Once the Board of Directors/Shareholders pass a resolution for the liquidation or winding up, and the appointment of a liquidator, the liquidator, upon the receipt of such resolution, issues an acceptance letter.2. Publishing the Liquidation Notice
Once the liquidation process is initiated, the liquidator publishes the liquidation notice, both in Arabic and English, in 2 local newspapers.3. Overview of Collection & Distribution of Company Assets
If needed, the liquidator may overview the collection and distribution of company assets, and the settlement of liabilities.4. Preparing the Statement of Affairs
As the last step in the liquidation process, the liquidator prepares the statement of affairs and the liquidator’s report.
Company liquidation in Dubai or the rest of the UAE comprises the following steps:
The liquidation process for free zone companies is similar to that of mainland companies, except with regard to the notice period, the time frame required to liquidate the company, etc.
The Dubai government sets out different types of documents to be submitted for the liquidation process. These documents are required for company liquidation both in free zones as well as the mainland. The essential documents are listed below:
- A copy of the license
- The copy of the Memorandum of Association (MOA), with any changes
- Power of Attorney (if any)
- Passport copies of all the shareholders
- Copy of the Emirates ID
- Shareholder’s resolution
- Application form of de-registration
The Liquidation of a company is a process in which the company seizes all the business activities and needs to shut down. A company needs to shut down when it has been ascertained that the company is unable to continue its services. This may happen due to a number of reasons.
The liabilities of the company could far exceed the assets of the company, which could plunge the company into losses. Unable to sustain the company will have to shut down. Liquidation of a company can be voluntary also when the management decided to shut down the company due to reasons known to them.
After the liquidation process, all the assets of the company are utilized to compensate for all the liabilities of the company. If even after all the liabilities of the company have been settled, some of the assets are left remaining, then these are sold, and then the profits are distributed among the directors and the shareholders of the company.
Company liquidation is the last resort which any management resorts to. This means that the business cannot conduct any more business and has to shut down. There are many benefits of company liquidation to the business, such as:
- It will allow the proper distribution of the assets of the company. In the liquidation process, all the assets of the company are first used up to compensate for the liabilities of the company, and after this, the remaining assets are then sold off, and the proceeds are then distributed among the shareholders.
- Liquidation can be done if the companies want to make a new start in the business or do not want to associate themselves with a certain brand in any way.
These two are the most important benefits of company liquidation, which are available to a business. But the management should keep in mind that these advantages can be availed only if they utilize the services of professional and reputed auditing services.
In the United Arab Emirates, a company can be established in the Mainland as well as the Free Zone. It should be kept in mind that only the Approved Auditors are allowed to conduct an audit of the companies which have been established in the Free Zone. Every management should avail the services of reputed and professional auditors so that all the documents of the company are properly managed.
There are more than 37 free zones in the United Arab Emirates which cater different services to businesses. These free zones provide a platform to the companies and will help them to grow and develop in the Middle East.
Here are the steps for company liquidation, which should be followed by all the companies. The list of steps given below is not a fixed list and can be changed according to the needs and requirements of the company.
Step 1:Submission of notice to the concerned authority.
Step 2:all the company documents such as Company License, Formation Certificate, lease Agreement etc., need to be cancelled.
Step 3:The Company must obtain necessary clearances from the authorities.
Step 4:The liquidation of the company must be notified to the people in a Gazette.
A liquidator is a person who is responsible for the complete liquidation process of a company. The management needs to be very careful while selecting a liquidator. This liquidator should not make any mistake in conducting the process, or the company will have to face penalties and problems in the future.
Here is a list of the roles which the liquidator should play. These are:
- Assess all the assets and liabilities of the company. He will be responsible for all the assessments for the claims made. He will also be responsible for the distribution of the leftover profit after selling off the assets of the company.
- Provide information to the creditors of the company from time to time.
- Oversee the collection and distribution of the company assets.
- Prepare the statement of affairs and the final liquidators report.
We provide the following company liquidation services in Dubai and the rest of the UAE:
- Assistance in preparing the Board of Directors/Shareholders resolution
- Auditing financial statements for the purpose of liquidation
- Preparing the Statement of Affairs and the Liquidator’s Report, including No Liability Letter
- Liaising with the licensing authorities for the submission of documents and liquidation of the company
The liquidation of a company in Dubai is a complex and time-consuming process. At GSPU, we help our clients in following the procedures to wind up a company in Dubai, UAE, should the need arise. GSPU is a financial consultant in Dubai, offering a wide range of services including accounting, auditing, software consultancy, and management. We have been providing the best audit services in Dubai and the rest of the UAE for over a decade.
The liquidation period depends on the licensing authorities. For mainland companies, it is normally 45 days. For some free zones, it is 15/21 days. There is a 45-day notice required for certain free zones like Dubai Creative Clusters Authority, etc.
Yes, it is mandatory to publish the liquidation notice in any 2 newspapers (one in Arabic and the other in English).
Including the notice period, it may take 60-90 days to liquidate a company in Dubai.
Yes, a company must cancel all visas and get a clearance letter from Immigration Department to complete the liquidation process. The company has to pay end-of-service benefits and other statutory dues, such as unpaid leave salary, air ticket, unpaid salary, etc. to the employees.