If you are a business owner in Dubai, you may have heard of the term “company liquidation. “This process can help your business navigate tough financial times or allow for a smooth dissolution of your franchise. By understanding the benefits and steps involved in company liquidation in Dubai, you can make informed decisions about the future of your business and ensure that you are taking the necessary steps to protect your assets and interests.”
Liquidation involves turning the company’s assets into cash and distributing it to creditors and shareholders. But what happens when you face a company liquidation in Dubai? This is where Spectrum Auditing comes in. As a trusted brand for company liquidation in Dubai, they can provide 100% supervision, ensuring all assets are converted to money and distributed to the appropriate parties.
In this blog, we will explore the types of liquidation and how Spectrum Auditing can help businesses navigate this difficult process.
Types of Liquidations
- Voluntary Liquidation
Voluntary liquidation refers to the dissolution of a company that its shareholders have agreed upon. Such a decision will be made when a company owner feels the company has no reason to continue operating.
- Compulsory Liquidation
If a company doesn’t pay its debts, its creditors can ask the courts to shut it down so they can get their money. The courts may order a company to dissolve and sell its assets to pay off its debts. In the case of forced liquidation, a liquidator can be picked by the shareholders or the courts.
The Process of Company Liquidation
To ensure compliance, companies must follow all the necessary steps in corporate liquidation in Dubai.
Step -1: The first step involves drafting and adopting a motion to dissolve the company by the company’s shareholders.
For UAE-based Limited Liability Companies (LLCs), the decision needs to be signed by a Notary Public. Suppose the shareholders are not in the UAE. In that case, the decision must be notarized and certified at the appropriate UAE embassy, then attested at the UAE Ministry of Foreign Affairs and Ministry of Justice. All attested work is done smoothly by the Spectrum Auditing team in a hassle manner.
Step -2: When it comes to liquidation, choosing the right liquidator is crucial for a successful outcome. The Spectrum Auditing Process offers a reliable solution, providing a formal acceptance letter from the liquidation company to ensure a smooth and effective process. So leave your assets in the right hands, opt for the Spectrum Auditing Process, and have peace of mind.
Step-3: After getting a provisional liquidation certificate, the company can publish a notice of liquidation in English and Arabic in a public magazine. This must be done before the company is officially considered liquidated.
Step-4: This step includes filing the shareholders’ resolution to the appropriate licensing and with all of the necessary documentation and payments. Spectrum Audit can help you with the filing process and documentation.
The relevant documents needed for individual shareholders:
- A copy of the company’s Trade license
- The board of directors’ resolution note to start the liquidation process.
- A copy of the company’s founding document and bylaws ie. MOA, AOA, Incorporation documents
- A list of the company’s creditors and their claims against it.
- A list of what the company owns and what it owes.
- A report on how the business is doing
- A report from the company’s auditor about the company’s finances.
The relevant additional documents needed of corporate shareholder:
- Apostilled copy of Memorandum / Article of Incorporation (Attested by UAE embassy and Ministry of foreign affairs UAE)
- Apostilled copy of incorporation certificate Attested by UAE embassy and Ministry of foreign affairs UAE)
- Apostilled copy of the resolution by the board to liquidate the company and appointing a authorized person to liquidate the business Attested by the UAE embassy and Ministry of foreign affairs UAE)
- All the documents should be attested and legally translated into Arabic.
Step-5: There will be a 45-day notice when all work permits and visas for workers and their partners will end for the company in Dubai. It includes:
- Immigration Department clearance letter
- Clearance letter from the Department of Labor
- Clearance letters from water, electricity, and phone companies
- Letter of approval from the company that rents the space (the owner).
- Clearance letter from the Federal Customs Authority (FCA). Letter of approval from the Road and Transport Authority (RTA).
- Close-out letter for a bank account
- FTA has sent both a letter to remove the VAT registration and a letter to clear the VAT registration.
Step-6: The liquidator (Spectrum Auditing) can make the Liquidation Report once the notice ends. Then, the final Report, along with all the necessary forms and cancellation fees, should be sent to the right Authority. The Authority will look at the request and, if approved, give the person a “License Cancellation Certificate.”
Liquidation is a crucial process that aims to distribute a company’s assets fairly and orderly among its creditors and owners. However, the process of liquidation in Dubai, UAE, can be both tedious and daunting. But with the help of trusted professionals like Spectrum Auditing, you can easily navigate the process. Their expert team can guide you through every step of the company liquidation process in Dubai and provide the assistance you need. Best of all, their services are both accessible and affordable.
To learn more about the liquidation process and how Spectrum Auditing can assist you, visit their official website today.