Company Liquidation in Dubai

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Company Liquidation in Dubai

Company liquidation in Dubai involves winding up and closing down a company’s operations and affairs by the legal requirements and regulations set by the authorities in Dubai, United Arab Emirates (UAE). Hence, it involves the formal closure of the company, settling its debts and liabilities, distributing assets to shareholders, and canceling its legal existence.

Additionally, company liquidation can occur voluntarily if the company’s shareholders decide to dissolve the business or involuntarily in cases where the company fails to meet its financial obligations or violates legal requirements. Furthermore, the process typically involves various steps, including appointing a liquidator, obtaining clearance certificates from government departments, settling debts and liabilities, selling assets, and canceling licenses.

Company Liquidation in Dubai with Business Diaries

Business Diaries provides professional and reliable company liquidation services in Dubai. Our experienced team assists with the entire liquidation process, from initial planning to asset distribution. We ensure compliance with legal requirements, handle documentation, and liaise with authorities. Hence, trust us for a seamless and efficient company liquidation in Dubai. Feel free to reach out to us today for professional guidance and support.

Types of Company Liquidation in Dubai

 

    • Voluntary Liquidation:
        • Members’ Voluntary Liquidation (MVL): The solvent company voluntarily winds up and distributes assets among shareholders.
        • Creditors’ Voluntary Liquidation (CVL): Insolvent company voluntarily winds up, and assets are distributed to creditors.

      Compulsory Liquidation:

        • Court-ordered liquidation due to non-compliance, financial difficulties, or inability to pay debts.
        • The official liquidator appointed by the court oversees the process and distributes assets to creditors.

Company Liquidation Process in Dubai

    1. Board Resolution: First, obtain a board resolution approving the choice to initiate company liquidation and designate a liquidator.
    2. Appointment of Liquidator: Appoint a licensed liquidator who will oversee the liquidation process and act as the company’s representative.
    3. Public Announcement: Publish a public announcement in local newspapers to inform creditors and other stakeholders about the company’s liquidation. Thus, this allows them to submit their claims within a specified timeframe.
    4. Clearance Certificates: Obtain clearance certificates from relevant government authorities, such as the Ministry of Human Resources and Emiratisation, the General Directorate of Residency and Foreigners Affairs, and the Federal Tax Authority. 
    5. Asset Evaluation and Disposal: Evaluate and appraise the company’s assets. The liquidator may sell or dispose of the assets to generate funds for debt repayment.
    6. Debt Settlement: Meanwhile, settle outstanding debts and liabilities of the company. The liquidator will prioritize payments to creditors according to the hierarchy of claims.
    7. Financial Reporting: Prepare final financial statements, including a balance sheet, profit, and loss statement. Hence, these statements reflect the company’s financial position during liquidation.
    8. Shareholder Meeting: Hold a final general meeting of shareholders to approve the financial statements and discuss matters related to the liquidation process.
    9. Cancellation of Licenses: Cancel all licenses and permits associated with the company, including the commercial license and any industry-specific licenses.
    10. Distribution of Remaining Assets: Likewise, distribute any remaining assets among the shareholders by their ownership interests after settling all debts and liabilities.
    11. Deregistration and Closure: Lastly, submit the necessary documentation to the relevant authorities, such as the Department of Economic Development, to deregister the company and obtain a closure certificate.

    The company liquidation process can be complex and involves adherence to legal requirements and regulations.

      Frequently Asked Questions

       

      What documents are necessary for company liquidation in Dubai?

      The required documents may include

      • a board resolution,
      • liquidator appointment document,
      • trade license copy,
      • financial statements,
      • bank statements,
      • clearance certificates,
      • passport copies, and
      • power of attorney if applicable.

      Can a company liquidation be voluntary?

      Indeed, a company liquidation can be voluntary when the shareholders opt for either a solvent (MVL) or insolvent (CVL) liquidation to wind up the company.

      Can I liquidate my company without a liquidator in Dubai?

      No, it is a legal requirement to appoint a licensed liquidator approved by the relevant authority in Dubai to oversee the liquidation process and ensure compliance with regulations.