An Introduction to Company Liquidation in UAE
In simple terms, company liquidation, de-registration, or dissolution is a process whereby the existence of a company is brought to an end. It is also known as a formal insolvency procedure that helps in the winding up of a company, cancellation of a company, or closing of a company. During this procedure, all of a company’s assets will be liquidated or sold for the benefit of the shareholders and the company. Apart from this, any significant revenue is redistributed amongst the shareholders and creditors on the basis of their shareholding percentage. Once a company is de-registered or liquidated, it will cease all business operations.
Types of Liquidation
In the United Arab Emirates or UAE, there are two types of liquidations or de-registrations:
Voluntary Liquidation: It is a self-induced liquidation and dissolution of a company. Such a decision is made once a company’s directors, owners, and shareholders decide that there is no reason to continue a particular company.
Voluntary liquidation is also referred to as shareholders’ liquidation. In certain circumstances, a company decides to liquidate to avoid further losses. Poor operating conditions, continuing losses, termination of the objects, debts, and more are some reasons for voluntary liquidation of a company.
Compulsory Liquidation: Compulsory or mandatory liquidation of a company takes place when a company’s debts are not cleared on time and investors or creditors request the court to de-register it to claim their dues. The court then takes action to forcefully wind up the company and help investors recover their capital.
Why is Company Liquidation Required?
Insolvency is one of the major reasons why a business chooses to liquidate its assets. When a company is not able to pay debts and process further operations, it is considered to be insolvent. Liquidation or de-registration enables a company to terminate its operations and turn its assets to cash to clear debts. There can be some other reasons behind liquidation as well. Some companies liquidate their assets due to unfeasible operations and updated technology. Others wind up their companies because the founder has retired or passed away.
Company Liquidation Process
Clearly, company liquidation is a tedious task for creditors and directors alike but can help avoid further losses. When it comes to the process or procedure of company liquidation, there are no fixed steps. You need to understand that the company liquidation process depends on several factors including the condition of the company, type of liquidation, reasons behind the company liquidation or de-registration, and more. The process of company liquidation for one company would be different from another.
Are you struggling with unpaid debts? Are you worried about the future of your company? Hire professional company liquidation services to wind up your business hassle-free. MPMS is a trusted and reliable company liquidation services provider that understands the complexity of your business and is deeply committed to assist you through the liquidation process so you move out legally and smoothly.
What are The Necessary Documents Required to Initiate The Liquidation Process of a Company?
- Emirates ID
- A Copy of Shareholders’ Passport
- Shareholders Resolution
- A Copy of Business License
- Deregistration Application Form
- Power of Attorney (If Any)
- A Copy of Memorandum of Association (MOA)
At MPMS, we have a team of expert company liquidation consultants to help you with the complete documentation process required to liquidate your company. Apart from these documents, you need to obtain clearances from DDA Finance Department, Dubai Customs Department, DDA IT Section, and more. Our trusted liquidation consultants have the expertise to understand the complexities of your business and offer an effective solution to help you wind up your company smoothly.
How Can MPMS Help in Company Liquidation?
Being the best company liquidation services provider, MPMS is committed to guide you through the company liquidation process. At MPMS, you will find an expert team of company liquidation consultants to help you in this critical time and guide you to move out of your business legally without hassles. Our experienced professionals are will take care of all the document preparation, bank account closure, utility cancellations, no liability certification, etc. to make the liquidation process smooth for you.
We offer company liquidation services for all types of free zone, offshore and mainland businesses across the United Arab Emirates (UAE).
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