Company liquidation in UAE is also known as winding up. It is a process where a business is shut down. It is a long process including asset liquidation which needs expert advice and help of accounting firms like us. Alike company formation, liquidation services includes government approvals, closure of bank accounts, payment of creditors and debtors, sales of inventory and assets, deregistration process, termination of employees, clearing their dues and canceling of their visas etc.
There are two types of liquidations:
Voluntary liquidation: where stakeholders and business owners themselves ask for liquidation due to various reasons like bankruptcy, leaving of keyboard members or a unanimous decision to end its term and focus on other businesses. Whatever may be the reason, it involves a long process with the involvement of liquidators.
Involuntary liquidation: this type of liquidation is ordered by the court. It is usually demanded by creditors but carried out by stakeholders. In this type of liquidation, company assets are sold and the creditor’s amount is paid. It can also be ordered if a company violates the compliances set by the government.
Hiring a liquidator for liquidation services is a mandatory protocol for any kind of company liquidation. They are either appointed by the stakeholders in case of voluntary liquidation or by court and creditors in the involuntary liquidation.
Hiring top auditing and accounting firm in Dubai like us for liquidation services will make your process more efficient and time-saving. We understand different types of business need a different approach to its closure.
Steps under Company Liquidation Services:
Step 1: Assessing the business:
In this step, we understand the financial responsibilities of the company, its debts, asset value, liquidation cost, legalities associated with various government departments:
Inform all key people involved in the company including debtors and creditors, offer you expert advice on various choices available for your company before the start of the insolvency process.
There can be many options to dissolve a company like an auction, straight buy out and consignment services. We look the most beneficial way of dissolving the company to make sure you get the best market value while doing it.
Step 2: Starting the liquidation process:
Liquidation of a company in Dubai, UAE need compliance with lots of laws and regulations laid down by the government. After auditing your complete financial records, we will come up with a timeline required to complete the process. For example clearance certificates are required from Etisalat, Dubai municipality, customs department, Vat Authorities, and other government departments if needed.
Asset disinvestment: selling of physical assets of a company so that finance can be raised from it is known as asset disinvestment. It is done to raise the value to clear financial dues of the company.
Documentation preparation: the closing of a company involves many legalities. We prepare all the legal documents required for it with help of our legal team.
Liquidation accounts preparations: while dissolving a company, all financial accounts need to prepared in a standard manner for all involved parties to assess. All the input and output flow of the cash must be recorded for approval which our employees do in a professional manner.
Creditors payment and debt recovery: all creditors must be paid in full. Many times it’s the creditors who ask for the dissolvent of a company on basis of faulty dues.
Step 3: the final closing:
This step includes
Termination of employee contracts: all employees are relieved of their duties after payment of their dues and their visas terminated. While insolvency a company loses its power of issuing employee visas. Before closure, it is mandatory that no visas are issued on this company’s name.
Advertising in publications and newspaper: a notice is issued in minimum two major publications about the closure of the company to inform the general public and all of its stakeholders so that anyone having an issue or interest can raise his or her objection against it within the stipulated time. If no issues arise during this notice period, then the liquidation process is continued.
Final settlement of payments: all employee payments, creditors and debts are paid in full before wind up of the company. Distribution of surplus of the company; if any; to its owners and stakeholders is also a major factor during the closure. Because it’s the company that is dissolved not its members. When a company is dissolved, all legal issues in the name of the company also gets stopped.
Deregistration: when all the needful is done following the compliances of the government, a company’s registration number is removed from the government records and company is declared closed with issuing of a certificate of deregistration by the government.
With competent and experienced staff on our board, we boast of handling the liquidation of businesses in all industries with equal panache. We get you the right value for all your assets and distribute them in a justified manner. As we know, that no well running business shuts on its own, we demand a reasonable fee from our clients and give them the best service in both UAE and Dubai.