Company liquidation is termed as the closing down of any company. Different liquidation report services are available in UAE. The report states the financial condition of the company when it runs out of cash to repay the debts. After the operation of the company ends, the organizational assets are used to repay the debt of the shareholders, creditors and others.
However, the person who is responsible for the process is known as the liquidator. The person is appointed either by court or company’s shareholder based on the type of liquidation.
What are the Different Types of Liquidation?
Company liquidation is of different categories and some of them are given below
- Voluntary liquidation – In this case, the shareholder of the company will chose to end the company operations as they would be left with no money to pay to the creditors. Here, the creditor is given the priority.
- Compulsory liquidation – This type of liquidation is given by the court and as per the notice, the assets of the company are given to the creditors and the company contributes as per the claims.
What do you Understand by Company Liquidation?
Company liquidation is the time when the company decides to close down the operations. Due to increased debt, it is unable to repay it to the shareholders and the creditors. At the time of liquidation, it aims to sell assets to repay the debts. The amount one gets after selling the assets of the company is given to the creditors and the shareholders as per claim. Some considerations before liquidating company can help to go through the procedure easily.
- Paying the due telecommunication bills
- Checking the utility bills and the ones that are due
- Closing the bank accounts relating to the business
- Creating a final audit report that would be helpful know about company assets and liabilities
- Cancelling the visa as per the license of the company
However, there are many liquidation service providers. It is better to get in touch with the right one that can assist you well to create the reports. As per the report, it would be easy for you to pay off the debts due to the shareholders and the creditors as per their claims. Before paying the money, make sure that you go through the claims carefully. Also, make a suitable list of the assets that can help you know how much money you can get by selling it off.
Documents Required for Company Liquidation in Dubai
- Resolution done by shareholders
- Deregistration of application form
- License copy with suitable information of company
- Memorandum of association copy along with the changes made
- Listing the name of power of attorney is any
- Giving the emirates ID copy of company shareholders
- Passport copy of shareholders
After submission of the documents, the company needs to make the initial payment for company liquidation to the higher authority. On the basis of this, a primary certification relating to the liquidation would be issued. The document is the evidence that the company can finally prepare for its winding up operation.
So, after the company gets the primary certificate relating to liquidation, it can give advertisement and it will have only 45 days for the advertisement. If it is a LLC company, it needs to give four advertisements in order to publish the same in Dubai newspaper. Also, knowing the role of a liquidator can help to opt for the right service. GCC Filings will help in company incorporation, VAT registration, return filing, accounting, auditing and other essential services.