Dubai is one of the world’s most famous places for emerging businesses. From easy grants to various opportunities provided by the government for building businesses. Doing business in Dubai is actually a pleasant journey for entrepreneurs.
But sometimes due to some unforeseen or misfortune circumstances, which may lead to severe consequences. In many extreme cases, companies may have to terminate the term of the company and take serious decisions. Companies are expected to set up legal procedures to end the business term of the company, known as the process of liquidation. For the liquidation process to go steadily, a few conditions need to be met.
What Is Liquidation In Dubai, UAE?
Company liquidation in Dubai is the procedure of wrapping up the business operations when the company becomes incompetent in progressing in the line of business. Companies sell their shares and assets, to pay for the pending payments or debts during the process. The amount collected after selling the assets is shared by the shareholders accordingly.
This is a legal process that includes authentication, generation, and closure of legal documents. Since there are many registration and emirates authorities, there are numerous conditions and rules for the liquidation process.
There are certain conditions to meet in accordance with the rules and regulations of the relevant authority, to liquidate a company. Liquidation can be either voluntary or compulsory, other than the procedures are nearly the same.
Types Of Liquidation In Dubai, UAE
Voluntary Liquidation In Dubai, UAE
Voluntary liquidation is a process that is decided by the stakeholders if the company is on the edge of bankruptcy. A shareholder poll is conducted that allows the company to liquidate its assets to free up the funds to settle its debts. Voluntary liquidation may occur due to failed business strategies or poor circumstances.
Such purposes can assist in transferring and restructuring assets to another company. Voluntary liquidation is also allowed in case the company was created for a specific purpose. It can also be done if a crucial member has left the organization.
Compulsory Liquidation In Dubai, UAE
Compulsory liquidation is a court-based process in which the assets of a company are given to the members of the company. The procedure is initialized by filing a petition at the court. After this, the court hearing is set, which decides whether it is appropriate to make a compulsory liquidation.
If the company is insolvent, then a compulsory liquidation order is issued, and the company is dissolved at the end of the liquidation.
Causes Of Conditions Of Liquidation In Dubai, UAE
- Expiry of license or duration: after the expiry of the issued license, the company needs to either return the license or renew it.
- The accomplishment of the goal for which the company was established: For example, if the company is established to deal with particular tasks like building some architecture or cleaning some then the company has no use and can be liquidated.
- Loss of all or most of the recourses or assets of the company: In case of extreme loss, the company can liquidate to save from further bankruptcy and complications.
- The agreement of the shareholders that the terms of the company should be ended as per the required majority.
ebs can help you Conditions Of Liquidation In Dubai handle your company wisely and tackle bankruptcy in time. We are approved auditors and also do liquidation audits of the companies. Our team of expert auditors will help you to make decisions about the liquidation process. Feel free to have a consultation about your company’s position and future risks. We help companies to grow their business and handle the auditing processes properly.
ebs likewise offer services, for example, accounting and bookkeeping services, VAT services, Auditing, Due Diligence audit services, and many more.
Feel free to contact us with any additional inquiries or requests for accounting services. A free discussion will be given to you by our specialists, who will answer your request immediately.