Company Liquidation Services in Dubai
Liquidation, dissolution, or de-registration of a company involves the formal closure of business operations, settling liabilities with creditors, and distributing company assets to shareholders and owners. This process follows a detailed legal procedure in Dubai, UAE, where regulatory authorities oversee the land regulations to ensure the fair treatment of all stakeholders during the companys wind-up process.
Types of Company Liquidation
A company can be dissolved voluntarily or forcefully by authorities when it can no longer be able to pay its liabilities. UAE Company law states two types of company liquidation methods:
Voluntary Liquidation
Voluntary liquidation, also known as shareholders liquidation, occurs when a company decides to wind up its operations by its own choice. Various reasons may lead to voluntary liquidation, including the expiry of a fixed duration, achievement of the company’s purpose, termination of objectives, merger with another company, sustained business losses, or the inability to pay debts. Shareholders make the decision to dissolve the entity in order to prevent further financial losses from occurring.
Compulsory liquidation
Compulsory winding up of a company occurs when the company has committed a serious offense against the law or is insolvent, unable to carry out its business operations. It can also be initiated when creditors file complaints against the company to local regulatory authorities in order to recover their outstanding debts. In such cases, the local authority takes action to forcefully liquidate the company and facilitate the recovery of funds for the creditors.