Company Liquidation in Dubai
Company Liquidation in Dubai – Liquidation is the complete process of bringing a business or an enterprise to an end and equally distributing its assets to the various claimants and creditors associated with them.
This Liquidation can be for a branch of a company, sole establishment, a free zone organization, a LLC Company.
Reason for Company Liquidation in Dubai:
They are various reasons for liquidations of any company, below mentioned are few of them
- Insufficent funds
- Company does not have sufficient liquid funds to carry on day to day financial transactions
- Company in Debt
- Claimants are not being paid on time due to various reasons
- Filed for a Law Suit
- Company commits a serious offense and filed for a law suit by the regulatory authorities.
Types of Liquidation:
They are two types of Liquidation which any company can go through which are:
- Voluntary Liquidation or Shareholders’ Liquidation
- The shareholders decide to wrap up the business and they do not have money to cater to transactions of liabilities.
- Compulsory Liquidation or Creditors’ Liquidation
- The court sends an order to the company to liquidate the assests and distribute it to the contributors or creditors based on the priority
Role of a Liquidator:
A liquidator is one who makes all the critical decisions of the liquidation process. Below mentioned are the steps taken by a Liquidator:
- Initializing the Process
- Post a resolution is passed by the shareholders/ Directors of the Board. The liquidator is appointment internally. The liquidator issues the acceptance letter.
- Publication of the Notice for Liquidation
- The liquidator is required to publish the liquidations notice in 2 local newspapers in Arabic and English
- Collection Overview and Distribution of Assets
- The Liquidator will overview the entire collections as well as the distribution of the company assets in order to the settle the liabilities.
- Preparation of the final statement of Affairs
- The Liquidator is required to prepare a statement of affairs and the report of liquidation
Process of a Company for Liquidation:
The company needs to follow the followings procedure for liquidations which is as follows:
Prepare and Submit Resolution
- The liquidator confirmation along with the resolution should be submitted to the licensing authority
Publishing an Advertisement
- In two local newspapers the liquidation advertisement needs to be published in 2 languages-English & Arabic.
Settlement for Employees
- All the employees under the companies payroll must be paid off and wherever applicable visa should be discontinued
Closing of Bank Account
- After the settlement of the employee’s a closure letter is received from the concerned bank
Obtaining a NOC
- An NOC is available from the respective Ministry of Authority
Deregistration’s with the FTA
- The company will have to de-register itself and receive a certificate for the same from the FTA
Issuance of Liquidators Report
- The Liquidator shall share the report of the entire liquidations assets of immoveable and movable properties.
Submitting the documented copies
- The liquidation report and all legal documents need to be submitted.
Original documents submission
- After the verification of all the documents the original documents need to be submitted to the respective licensing authority.
Cancellation of License
- Post the submissions of the originals documents, an ad is run in the newspaper for 15 to 45 days and finally the license is cancelled.
Documents required for Company’s Liquidation Process in Dubai, UAE:
The following documents original need to be submitted for the completion of the liquidation process. The documents remain the same for free zone and the mainland.
- License Copy
- A copy of the company license.
- Memorandum of Association Copy
- MOA with all the latest changes.
- Power of Attorney
- If any Power of Attorney.
- Shareholders Resolution
- Resolution of the stakeholders.
- Shareholders passport Copy
- All the shareholders passport copies with all pages copy.
- Emirates ID Copy
- Deregistration Application Form
- Application form of de-resigteration
Documents required during the Notice Period of the Company:
- Letter of Clearance from following Authority –
- Immigration Department
- Labour Department
- Electricity and Water Departments
- Telecom Authority (DU or Etisalat, etc)
- The Concerned Bank
- CLD Government section
- Business Unite (NOC)
- By registered auditor for FZE & FZCO
Clearance Certificate from free zone authority (applicable for companies transferred from the free zone) to be submitted.
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