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Company Liquidation
Company Liquidation Services Dubai
Company liquidation, also known as winding up, refers to the process of bringing a company’s affairs to an end and distributing its assets among its creditors and shareholders. Company liquidation can occur voluntarily or involuntarily, depending on the circumstances.
Voluntary liquidation occurs when the company’s directors and shareholders agree that the company should be wound up. Involuntary or mandatory liquidation, on the other hand, occurs when the company is unable to pay its debts and creditors petition the court to wind it up.
The company liquidation process can be complex and involve various legal and financial considerations, including the sale of assets, the settlement of debts, the distribution of proceeds, and compliance with legal requirements. It is important to seek professional advice from a lawyer or accountant who specializes in company liquidation services to ensure that the process is carried out correctly and in accordance with the law.
At RNI Consulting, we help our clients in following the procedures to wind up a company in Dubai, UAE. We provide the following company liquidation services in Dubai and the rest of the UAE:
- Assistance in preparing the Board of Directors/Shareholders resolution
- Auditing financial statements for the purpose of liquidation
- Preparing the Statement of Affairs and the Liquidator’s Report, including No Liability Letter
- Liaising with the licensing authorities for the submission of documents and liquidation of the company
Types of Company Liquidation
There are two types of company liquidation in Dubai:
- Voluntary company liquidation
- Mandatory company liquidation
Voluntary Company Liquidation
Voluntary Company liquidation occurs if the business does not have enough money to conduct a business or meet the expenses such as bills and salaries and the company is constantly at loss. In that case, companies will go for voluntary company liquidation as they do not have enough funds to sustain in the competitive market of UAE. The company’s assets are sold and the proceeds are distributed to its creditors and shareholders in accordance with the company’s articles of association and relevant laws.
Mandatory Company Liquidation
Mandatory company liquidation occurs if a company violates the rules and regulations of the authorities or commits a crime such as fraud or any other serious offense. The government will immediately close the company and in this case, mandatory company liquidation is required as per the court order. The court may also order the company to be liquidated and appoint a liquidator to oversee the process of selling the company’s assets and distributing the proceeds to its creditors and shareholders.
Company Liquidation Process
The liquidation of a company in Dubai is a complex and time-consuming process. As liquidators we typically fulfill the following obligations:
• Prepare and submit a liquidator’s confirmation to relevant authorities – Appointment of liquidators
• Publish liquidation advertisement in any 2 local newspapers for 45 days;
• Realization of assets;
• Cancellation of contracts and identification of liabilities;
• Payment of all the dues such as Etisalat and DEWA and other pending expenses;
• Payment of wages and cancellation of visas of all the employees of the company;
• Supervise the maintenance of accounting records;
• Closing of bank account;
• File tax returns (VAT);
• Submission of VAT De-registration to Federal Tax Authority (FTA);
• Prepare and submit the report of the liquidator to the concerned authorities;
• Organize the audit of the liquidation and preparing company liquidation audit report;
• Submission of all the original documents to the concerned authorities;
• Cancellation of trade license.
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