The process of closing a business and all associated operations is known as company liquidation in UAE. When a business is at a loss and cannot afford to pay off its outstanding debt, it goes through a process called company liquidation.
All organizational assets are divided up among creditors and shareholders during a company liquidation, according to the order of priority of claims. Liquidators are those who carry out the liquidation process. The process of closing a business is referred to as liquidation. The management of the company appoints the liquidator.
A proactive approach to liquidation can involve the firm's decision-makers anticipating losses and mitigating them through a shareholders' liquidation or a market-exit strategy. However, for businesses that are unable to pay their debts and obligations, creditors' liquidation is always required.
It is crucial to remember that the authorities in the UAE may fine and punish you if you neglect to terminate your trading license.
Company liquidation is the official process of ending the operations of a business.
It can be done as follows:
A financially viable firm may voluntarily be liquidated by its shareholders. Similarly, the directors of a bankrupt company may decide to close and sell its assets to settle debts with creditors.
If a company fails to make its debt payments on schedule, creditors may request that the court order the company's liquidation. In these situations, the court might order a liquidation, which means the company needs to sell off assets to pay off debts.
The following is the official procedure for company liquidation in the UAE:
The resolution of the shareholders to dissolve the company needs to be developed and authorized. For limited liability corporations (LLCs) registered in the UAE, the resolution must be notarized by a notary public.
The resolution must be certified at the appropriate UAE embassy, and attestation from the UAE Ministry of Foreign Affairs and Ministry of Justice is required if the shareholders are not physically present in the UAE. A notary public must notarize the documentation for most Free Zone businesses.
It is essential to hire a liquidator and obtain a formal acceptance letter from them.
The business must publish a notice of liquidation in a generally accessible publication after receiving a provisional liquidation certificate. This warning should also be issued in Arabic and English. Different notification requirements may apply based on the registered authority.
Depending on the registration jurisdiction, a notice period of up to 45 days may be necessary. The following activities are acceptable during this period:
The appointed liquidator will start working on the liquidation report as soon as the notice period ends. This report and all other related documentation must be delivered to the appropriate authority.
In addition, the required cancellation fees need to be paid. If the application is accepted, the authority will issue a 'License Cancellation Certificate' after reviewing it.
When it comes to winding up a company in Abu Dhabi, there are specific documents that you need to prepare, as required by the government.
Here's a list of the essential papers you'll need for the company liquidation process in Abu Dhabi:
In short, following a well-defined legal framework and administrative stages is necessary for company liquidation services in the UAE. You can reduce the difficulties and complications of the liquidation process by working with GAAP Associates. They can help you navigate every step of the liquidation process with their skill, knowledge, and encompassing support, assuring an effortless, legal, and efficient liquidation strategy for your business.
An LLC, a branch of an LLC, an offshore company, a free zone company, or a sole establishment must cancel its licenses and distribute its assets to its creditors and shareholders following its plans for liquidation. The procedures for license cancellation and liquidation are extensive and complicated since many different documents are needed and numerous authorities are involved.
As the leading liquidators in the UAE, we offer guidance and support to businesses intending to wind up, dissolve, or liquidate in a quicker, easier, and more economical way. We will prepare the company liquidation audit report and submit it to the relevant authority where the company is registered. The authority will officially close the company and cancel the trade license after a thorough examination of the report submitted.
Get in touch with us for company liquidation services in the UAE!!