Company Liquidation in United Arab Emirates
Company liquidation is the procedure for shutting down a business in United Arab Emirates, alternatively , its referred as a “winding up” or “closing” a business. During liquidation all of the company’s assets are sold off and the proceeds are then used to payoff any outstanding debts and expenses. After clear all the liabilities any money that remains might be divided among the shareholders.
When a business goes through liquidation, it stops operating and stops hiring people. The business license of the company is canceled as part of the liquidation process, and its name is deleted from the Trade Registry. The company is now regarded as no longer existing by the government.
In the UAE, a company may need to go through liquidation for one of two main reasons.
- The company has fulfilled its initial objectives and the entity is no longer required.
- The company is regarded as insolvent.
Types of Liquidation in United Arab Emirates
The Formal Process of winding up company’s operations, know as company liquidation, may be carried out either voluntarily or through compulsory measures.
Voluntary Company Liquidation
Shareholders of a corporation have the option to voluntarily liquidate a financially sound company. Similarly, to this, the directors of an insolvent business can choose to shut down operations and liquidate its assets to pay creditors.
Compulsory Company Liquidations
Creditors can ask the court to order a company's liquidation if the company does not pay the debts within the time frame. In such scenarios, the court has the power to impose the liquidation process, obliging the business to liquidate its assets to clear the outstanding obligations.
It is necessary to appoint a company liquidator in UAE Free Zones as well as Mainland when dissolving a business. Depending on the rules and regulations set forth by the specific Free Zone Authority where the company is registered, there may be several procedures for shutting a Free Zone Company.
It is necessary to notify the relevant Authority in advance to initiate the closure of a Free Zone company. The authority will then go on to publish a liquidation notice. It will be the responsibility of business owners to get No Objection Certificates (NOCs) from utility service providers and other pertinent government or Free Zone departments as needed.
The business owners must proceed with the cancellation of staff visas and work permits as well as the closing of bank accounts after the required documents have been authorized. The Free Zone Authority should finally send them a formal termination letter, which will mark the completion of the company closure procedure.
JYWA SETTLERS is the most reliable Liquidation Company in Dubai with a team of professional Liquidators to offer full-fledged professional Company Liquidation Services in United Arab Emirates, Offshore businesses, Free Zone Businesses and the whole parts of UAE.
Process of Company Liquidation in United Arab Emirates
The Formal process of company liquidation in United Arab Emirates is as follow:
- Preparation and approval of Shareholder’s Resolution for Cancellation of Trade License
The dissolution of the company resolution adopted by the shareholders must be drafted and approved. The resolution must be notarized by a Notary Public for Limited Liability Companies (LLCs) registered in the United Arab Emirates .If the shareholders are not physically present in the UAE, the resolution must be notarized, followed by attestation from the UAE Ministry of Foreign Affairs and Ministry of Justice, at the relevant UAE embassy. Most Free Zone & offshore companies need to have their documents notarized by a Notary Public.
- Appointment of Liquidator
A liquidator must be appointed, and it is necessary to receive a formal acceptance letter from the liquidator. It’s the responsibility of the liquidator to ensure that all requirement for liquidation must be meet as per rules and regulations.
- Submission of shareholders resolution
The shareholders' resolution must be delivered to the appropriate licensing authority along with all the required documents and fees. The required documents include a copy of the company's Trade License, MoA, Powers of Attorney , and copies of passport or Emirates ID for all partners, owners, and shareholders. Additionally, a deregistration application form must be included.
- Publication of notification of liquidation of company
Following the issuance of a provisional liquidation certificate, the business is required to publish a notice of liquidation in a publication that is accessible to the general public. The English and Arabic versions of this notice should also be published. Depending on the registered authorities.
Documents Required for Company Liquidation in United Arab Emirates
- Copy of Trade License
- Power of attorney (if required)
- De-registration application form
- Resolution of the shareholders
- Formal letter of appointment of Liquidator
- Copy of Emirates ID and Passports of shareholders
- Copy of MoA
Liquidating a company may take a long time and cost a lot of money because companies must work with many external parties and organizations to carry out things accurately and on time. Any step or missing documents could cause unnecessary delays and problems. Companies must therefore conduct the winding-up process with greater caution and precision.
JYWA SETTLERS offers comprehensive company liquidation services in United Arab Emirates. Depending on the needs of the customer, our services range from full support for the liquidation process to helping with certain steps in the procedure. Please contact us for more information about our liquidation services.
As a liquidator our role to …..
- Draft the Board Resolution
- Settling with Employees
- Settling with debtors/suppliers
- Publishing advertisement newspapers
- Visa cancellation
- Bank account closing
- Obtain NOC from DEWA & Telecommunication service provider
- Tenancy agreement cancellation
- De-registration with FTA
- Preparation of liquidator’s report
- Submission of all required documents to cancellation of Trade License.