A business resolution service in UAE is the process through which the company has to reclaim and close down all its commercial activities. If it is determined that a company’s services cannot continue, the company must be closed. This can happen for a variety of reasons.
The company’s liabilities can significantly exceed its assets, putting the company at risk of bankruptcy. If operations cannot continue, the company must close. The liquidation of a company can also be optional if the management has decided to close it for known reasons. After the liquidation process, all of the company’s assets are used to pay off all of the company’s liabilities. If any assets remain after all business liabilities have been settled, they are sold and the profits are shared among the directors and shareholders.
Types of Liquidation
Compulsory liquidation and voluntary liquidation are the two main types of insolvent company liquidations
If a company’s debts are not properly paid, creditors can ask the courts to wind it up so they can get their money. To pay off existing debts, the courts can force a company to liquidate and sell its assets. In the event of forced liquidation, a liquidator can be appointed by the shareholders by resolution or by a court.
The dissolution of a company accepted by the shareholders is known as voluntary liquidation. When a business owner determines that the business no longer makes sense to continue, such a decision is made.
Company Liquidation Process
To remain compliant, a company must conduct all stages of corporate liquidation in Dubai. The liquidation procedure differs depending on the three conditions listed below:
Drafting and Adoption of a Resolution by Shareholders For limited liability companies (LLCs) incorporated in the UAE, the resolution must be authenticated by a notary public. If the shareholders are not present in the UAE, the resolution must be notarized and authenticated at the relevant UAE Embassy, followed by authentication at the UAE Ministry of Foreign Affairs and Justice.
- Hiring of a liquidator and reception of the liquidator’s formal acceptance letter
- After receiving a provisional liquidation certificate, the firm can proceed to publish a notice of liquidation in both English and Arabic in a public journal.
- Filing of the shareholders’ resolution to the applicable licensing body, together with all needed paperwork and payments.
- 45-day notice period will be required where,
- Work permits and visas for all workers and partners will be terminated.
- Immigration Department clearance letter
- Department of Labor clearance letter
- Utility company clearance letters – water, power, and telecommunications
- Letter of approval from the leasing company (landlord)
- Letter of approval from the Road and Transport Authority (RTA)
- Federal Customs Authority clearance letter (FCA)
- Letter of closure of a bank account
- FTA has sent a VAT de-registration letter as well as a VAT clearing letter.
- The liquidator can create the Liquidation Report once the notice period has ended.
- The final Report, including all associated paperwork and the requisite
- The Authority will examine the application and, if it is granted, will issue a “License Cancellation Certificate.”