What is Liquidation of a Company?

Liquidation is the process to wind up or dissolve the company, in case it is not able to run its business due to liquidity crisis and is therefore not able to manage its day to day expenditures and pay its creditors or repay the loan taken from the financial institutions due to the unavailability of required funds and is also incurring continued losses from business operations. The company also undergoes the same if it has committed a fraud and a regulatory authority instigates the winding-up process against it to impose fines or penalties. The liquidation is done both compulsorily or voluntarily based upon the prevailing circumstances.

In this process, the company is dissolved or winded up and an official liquidator is appointed who sells or disposes off the assets of the company and reduces the liabilities by making the payments to the creditors, lenders and, stakeholders.
The requirements of both free zone companies like JAFZA, DMCC, JLT, TECOM, DAFZA, Hamriyah, Ras Al Khaimah (RAK), DSO and mainland companies like Dubai, Abu Dhabi, Sharjah, Fujairah, or Ajman may vary but Fundforth understands the formalities and help the companies to resolute the entire process.
Fundforth has partnered with approved liquidators from departments in both mainland and free zones in UAE who are experts in handling both legal and regulatory issues concerning the liquidation of the company. As the Liquidation process is complex and involves a sequence of activities to be followed, Fundforth can help you to execute the same in a planned and timely manner. There are a set of procedures that have to be followed depending upon the nature of companies.

Procedures involved in the
Liquidation of a Company in UAE

• Resolution from Board to cancel/windup /liquidate the corporate and appoint the liquidator.
• Publishing of the notice of the company’s dissolution & appointment of a liquidator to be printed in 2 of the native newspapers and seeking claim from creditors.
• Obtaining consent from the partners for the agreement of the liquidation of the corporate.
• Obtain the letter of acceptance from the appointed liquidator and submission to DED
• Obtain the company’s dissolution letter from the Economic Development Department (DED).
• In case of LLC , resolution of shareholders to dissolve the businesses from the Public Notary has to be obtained
• Obtain the registration and licensing application type from the Economic Department of Emirates within which the company is registered and its submission
• Obtain the Release Letter from the property owner in favor of the licensee
• Obtain No-Objection Certificate from the Ministry of labor and Immigration
• Obtain No Objection Certificate from the Dubai Electricity and Water Authority (DEWA) and Etisalat or DU for utility clearance of the Company where applicable.
• Obtain the letter of acceptance from the appointed liquidator and submission to DED
• Closure of Bank Accounts and obtain a certificate of no dues or no liability certificate
• Settlement of fees and charges with the authorities
• Visa Cancellation of the partner(s) in case they are sponsored by their license.
• Submission of the company’s original license

How can we help with Liquidation Process of a Company in UAE?

Fundforth shall help in obtaining liquidation letter from registered auditors and seek cancellation by applying through DED and also arranging clearances from all the departments like Ministry of Human Resources, Directorate of Residency and Foreigners Affairs, Leasing Authority, Electricity and Water Authority, and ultimately the immigration department within the prescribed time frame. In handling all the banking and non-banking matters in the liquidation process, Fundforth shall assist at each and every step and has been successful in the smooth liquidation of many companies in UAE.

Our Core Area of Focus:

• Cancellation of Business Registration/Trade License of LLC in UAE
• Termination of License of LLC in UAE.
• Liquidation of General Partnership Companies in UAE
• Winding up of local and Foreign Companies in UAE
• Voluntary and Compulsory Liquidation of Free Zone and Offshore companies

Our Services in Liquidation mainly include:

• Preparation of Board Resolutions to appoint liquidators
• Preparation of all the legal and statutory documents involved in the liquidation
• Audit of the financial statements of the liquidating company
• Monitoring and supervising assets disposal and payment to creditors
• Provide guidance in support to deregister for VAT in UAE
• Preparation and Submission of Applications with the DED
• Meetings and discussions with the banks for No dues Certificate
• Arranging clearance certificate from various authorities of the free zone and mainland companies in UAE
• Preparation of Liquidation Report and its submission

Fundforth has a dedicated professional team for Company Liquidation Services who can offer initial consultation on how to proceed within the most appropriate procedure.

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