Company Liquidation in Dubai

The United Arab Emirates has become a major business center around the world. It attracts companies from all over the world to come and expand their business in UAE because it offers business-friendly environment as well as tax-free zones which are extremely helpful for every business especially for new startups. Thousands of new businesses start here every single day, but not all of them succeed or grow quickly to become a large company and get huge profits. Some of the companies may earn less or do not make that profit which they expected to make so this forces the owners to make a valid decision about whether to continue or shut down the company. Companies often close due to the shifts in the economy, revised goals, or the need to recover investments.

Business owners or shareholders need to appoint liquidators in Dubai to manage the company’s closure. While the overall process is similar, specific requirements may vary depending on the rules of the licensing authority. If you are looking to close your business, continue reading to learn about the key steps, conditions, and requirements for company liquidation in Dubai and how Vertix professionally handles it.

What is Company Liquidation?

Company liquidation is the official process of closing a business. It generally involves selling the assets of a company, paying any remaining debts, and distributing any remaining funds to all the shareholders with accuracy and reliability. Liquidation can begin either by the decision of the company’s owners or directors, or it can be ordered by a court if the company is unable to pay its debts. In both ways, liquidation marks the official closure of the company. This process must be handled carefully to meet all legal and financial requirements and to ensure that all those who are affected by this change are treated equally so that there are no issues in the future.

Types of Company Liquidation in UAE

Voluntary Company Liquidation

Voluntary company  liquidation happens when the shareholders or directors of a company decide to close the business, even if it is doing well financially. They might do this because the company has met its goals, or because the owners want to retire or move on for other reasons. This process is usually simpler and offers more flexibility.

Compulsory Company Liquidation

Compulsory company liquidation happens when a court orders a company to close, usually because creditors believe the company cannot pay its bills. This process is stricter and involves the court making sure that creditors get as much money as possible from the company’s assets. It is a more complicated process that must follow specific legal rules.

Why Do Companies Need to Liquidate?

There are several reasons why companies need liquidation. Sometimes it may become necessary for a company. The most common reasons include:

• The company’s debts and liabilities are greater than the value of its assets.
• The company is not able to pay its debts.
• The company has not conducted any business activities for a year after being formed.
• The company was not properly registered as a public or private entity.
• The business has faced ongoing financial losses.
• The company has cash flow problems, making it hard to manage its finances.

Steps and Procedures for Liquidating a Company in the UAE

1. Create a resolution to officially close the company.
2. Appoint a licensed liquidator to handle the process.
3. Get an acceptance letter from the liquidator.
4. Have the resolution notarized by a notary public.
5. Submit the necessary documents to start the liquidation with the relevant authority.
6. Advertise the liquidation notice in a local newspaper.
7. Get immigration clearance for the company.
8. Obtain clearance from the labor department.
9. Get customs clearance.
10. Close the company’s bank accounts and get a closure certificate.
11. Get clearance from all relevant government bodies, such as RTA, the Electricity and Water Authority, the Telecommunication Authority, and the FTA.
12. Submit the final liquidation report and all clearances.
13. The authority will issue a final cancellation certificate and remove the company’s name from the commercial register.

Also Read: Step-by-Step Guide for Company Liquidation in UAE

Documents Required for a Company Liquidation in UAE

Here is a list of documents needed for company liquidation in Dubai:

• Copy of the original trade license
• Memorandum of Association (MOA)
• Power of Attorney (if any)
• Copies of all shareholders’ passports
• Copy of Emirates ID
• Shareholders’ resolution
• VAT and Corporate tax filing and deregistration
• Deregistration application form

Liquidation Notice Period

The government provides all businesses a time of up to 45 days to handle any unpaid debts or bills efficiently before closing down the company. This time duration is referred to as the notice period. Before you start the procedure of shutting down your company, it is important to settle everything related to your business as well as your employees. Similarly, gather all the required documents, and make sure you also complete the following tasks:

• Pay off any outstanding utility bills (like electricity and water)
• Clear all telecom bills (phone and internet)
• Get a bank closure letter from your bank
• Prepare a liquidation audit report
• Cancel all residency visas that were issued under your business license

When all of the documents are ready and complete, you can easily start the process of closing the company. Just remember that the process of liquidation is different for mainland companies and free zone companies.

Why Should Companies Outsource Liquidation Services to Vertix Auditing?

1) Affordability

Liquidation can be a tough financial time, but Vertix is here to help with top-quality services at a fair price. Our affordable rates make it easier to manage the liquidation process without adding extra financial stress to your company in its final stages. With Vertix, you can focus on closing your company smoothly without worrying about unnecessary financial burdens.

2) Fast Process

One of the most important things in the process of liquidation is time and most of the liquidation companies do not follow it and do not take care of it. Our team knows how to handle the legal steps to make the process faster. We work quickly to reduce delays, helping you close your company as soon as possible while making sure everything is done according to the law.

3) Confidentiality

Your business information is very important. Protecting your information during liquidation is crucial. We handle all of the matters extremely carefully to ensure your company’s sensitive details remain secure and protected. We keep everything private when working with creditors, shareholders, or legal teams to protect your business’s reputation during the closure.

4) Decades of Practical Liquidation Experience

With our years of experience in company liquidation, Vertix offers deep knowledge in every case. Our team has successfully handled the liquidation of companies in different industries across the UAE. This experience helps us spot potential problems early and solve them quickly and efficiently, making the liquidation process smoother.

Key Takeaway

If you are thinking about closing your company in Dubai and don’t know where to start, we are here to help. At Vertix, we have guided many businesses through the process of liquidation in the UAE. Our experienced team is here to answer all your questions. Get in touch with us today to get started quickly and easily.