Company Liquidation Simplified! Learn about Company Liquidation in Dubai with Dhanguard.
In Dubai, the procedure known as Company Liquidation is the process in which an LLC company (or branch of a company), a sole establishment, a free zone company, or an establishment, shuts down its business operations and the business’s assets and property are shared to its creditors and shareholders. Even though technically dissolution is the last stage of the liquidation process, the term "liquidation" is frequently used to refer to the "winding-up or dissolution of a company."
In today’s Blog, Dhanguard will extensively discuss everything about the process and types of Company Liquidation in Dubai. So without any further ado, let’s learn!
Along with a wide array of services provided, Dhanguard also helps with Mainland, Offshore and Business Account opening as well.
Company Liquidation in Dubai (Types)
There are numerous things to think about before closing your business in Dubai, including the revocation of your company name and business license, employee payments, cancellation of tax registrations, and other relevant legal obligations. Selling a company isn't always the answer.
Kinds of Liquidation
There are two types of liquidations which are compulsory (also known as a creditors' liquidation) and voluntary (sometimes known as a shareholders' liquidation, but some voluntary liquidations are governed by the creditors).
Compulsory Liquidation
A form of corporate liquidation that is mandated by a court order is called compulsory liquidation. According to the order of claims, the company's assets are dispersed among the contributors and creditors in this instance.
Voluntary Liquidation
If a corporation chooses to voluntarily liquidate itself, it will be done so by the shareholders because they lack the funds to pay its creditors. Priority is accorded to the creditors in this sort of liquidation.
The Process of Company Liquidation
The board of the company convenes for a special meeting to discuss the evolution of the liquidation procedure once it has been decided that the liquidation would start. At this stage, a liquidator has been appointed, and any demands made by the company's creditors will be met.
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First and foremost, the company must show the formal records attesting to the decision to liquidate the business.
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The name of the appointed liquidator will also be included in this document.
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Along with the qualifications of the liquidator, the original registration certificate is also required.
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These papers ought to be notarized all together.
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Any unique permits or licenses the company may have acquired to carry out different economic activities in Dubai must also be revoked after the initial phases of the liquidation have been completed.
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Authentic paperwork from the parent firm must also be provided by branches in Dubai.
What are the Documents required for a Freezone Company to Liquidate?
The documents required for a Freezone Company to liquidate are enumerated below-
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Certificate of Clearance from the Free Zone Authority
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Certificate of Clearance (NOC) from the Business Unite
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CLD Clearance Certificate from the Government section
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The Original Freezone Company License
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All Fees and Charges paid in full to the Freezone
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The Board’s decision to liquidate the company and the appointment of liquidator for the said purpose.
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The Approval of Immigration and Labour Department from the Freezone Authority (FZA)
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The Immigration and the labour department should cancel and clear all visas.
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The submission of a letter of liquidation
Most free zones in the United Arab Emirates follow the procedures and document requirements listed above, but requirements may vary depending on the free zone owing to ongoing changes.
What are the Documents required for a LLC Company to Liquidate?
The documents required for a LLC Company to liquidate are enumerated below-
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The Legal Paperwork and Company’s Original License
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A letter of release from the property owner
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The RTA and the Ministry of Labor & Immigration’s issued NOC letters
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A No Liability and a Certificate of Bank Account Closure
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Shareholder resolutions from the Public Notary to dissolve the businesses
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The Economic Development Department’s letter of company dissolution (DED)
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A Notarized Board decision to dissolve/liquidate the LLC company and the appointment of liquidators.
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A letter from the appointed liquidator confirming his acceptance of the position of corporate liquidator.
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An Application for Registration and Licensing(Form No. BR/1) from the Economic Department of the Emirates
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What are the Documents required for a Branch Dissolution?
The documents required for a Branch Dissolution are enumerated below-
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Original License
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An NOC from the Bank, Ministry of Labor & Immigration, and RTA
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Resolution of the Board of the Parent Company for the closure of the Branch Office which is to be notarized also
What are the Documents required for the Cancellation of an Industrial Unit?
The documents required for Cancellation of an Industrial Unit are enumerated below-
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The certificates confirming license cancellation that have been issued throughout the various Emirates
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A copy of the notification of the company's dissolution and liquidator's appointment to be published in two regional newspapers
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Partner letters confirming their consent to the corporate liquidation.
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Original copy of the accounts liquidation, stamped by the legal liquidator and accepted by the partners.
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NO regarding cancellation granted by the Ministry of Labour and Social Affairs.
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The partner's (or partners') cancellation of their Visa if they are sponsored by their license.
Conclusion
It can be stressful to liquidate a company. Dhanguard will help you with the process of shutting down your company. Our staff offers expert advice that can assist you reduce your legal obligations and any financial losses when your license is canceled in Dubai. To guarantee that the liquidation procedure is completed smoothly and without any hiccups, we work with the relevant authorities and manage all the processes involved.
We provide a number of additional options for business closure, including winding-up, statutory liquidation, and simply deregistering the company. Each option has specific legal and financial ramifications, which we walk you through in great detail.
For you, we can also locate a third party who will buy the liquidated company and take care of any associated issues.
We assist you in taking into account every aspect of liquidating a firm, including:
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Planning for a business liquidation
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Responsibilities of the owner
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The price of liquidation
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Bankruptcy and Insolvency
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A thorough examination of all compliances
Please feel free to get in touch with us if you're looking for specialists and experienced counselors, or if you just have questions about company liquidation. We will be pleased to help you. Thus, we hope this blog provided you with insightful information. For more information on other related aspects, feel free to check out our website as well.
