Company Liquidation
The process of bringing a company to an end. This could be by selling off its assets, settling its debts, and distributing any remaining assets to its shareholders.
Typically initiated when a company is facing financial difficulties and is unable to pay its debts, or when its owners or shareholders decide to close the business.
Types of Liquidation
Voluntary Liquidation
Here the shareholders willingly choose to put all operations to an end due to the lack of money to pay off their debts to creditors.
Voluntary liquidations allow for priority to be given to creditors.
Compulsory Liquidation
In this type, the court order is issued which initiates the company liquidation process. All assets within the liquidated company are shared among the contributors, creditors, and shareholders, depending on the priority of claims.
The Process
While each jurisdiction and company type have its own specifics in terms of company liquidation, the overview of the process is as follows:
The company must provide all necessary documents such as the original registration certificate, that confirm the decision of liquidation, along with the credentials of the liquidator.
Documents
- Original Registration Certificate
- Copy of the Establishment’s Trade License
- Copy of the Establishment’s Memorandum of Association
- Power of Attorney (if any)
- Copies of Partners, Owners, and Creditors’ Passport and Emirates ID
Things to note
- Preparation of shareholder’s resolution of liquidation. The documents, by law, are required to be attested by a Notary Public registered within the UAE.
- A liquidator oversees the financial situation of the company, and cannot be associated with the company in any way. The liquidator is required to submit an official acceptance letter.
- A waiting period of 45 days is required to see whether any client files financial claims against the company.
What we can do for you?
- Clearance letters from the Immigration Department, Labor Department, Federal Customs Authority, and RTA
- Cancel all work permits and visas of all employees and partners
- Clearance letters from utility companies (water, electricity, and telecoms), as well as from the property owner
- Bank account closure letter
- Apply for VAT de-registration and obtain a VAT clearance letter from FTA
- After the 45-day period is over, file a liquidation report
- Submission to the relevant authority and pay cancellation fees
Our professionals deal with all the authorities on your behalf, while also guiding you on what can be done better.
