Company Liquidation in the UAE - All You Want to Know

by Zaara 16, Feb 2021

Company Liquidation in the UAE - All You Want to Know

The liquidation of a company is the procedure for closing a company. It's an event that typically happens when a corporation doesn't have the funds to cover its remaining debt. When the corporation’s service ends, the corporate properties are generally allocated to creditors and shareholders based on their priority claims.

In general, the person undertaking the complete liquidation process is called a liquidator. The liquidator shall be named by the court or the company’s shareholders, depending on the form of liquidation.

Types of Liquidation in the UAE

Company liquidation is of two types:

1. Voluntary Liquidation

In a voluntary liquidation, the company owners will attempt to close the company because they have no funds to pay for the creditors. Priority is provided to creditors in this form of liquidation.

2. Compulsory Liquidation

Compulsory liquidation is the form of liquidation of the corporation that is put out by a court order. Here, the company’s properties are allocated to creditors and contributors based on priority claims.

Why is a Company Liquidated?

The following are some of the factors for the liquidation of a company:

  • The company no longer possesses assets.
  • The company is impotent to pay creditors.
  • The company has no liquidity or cash to fund its existence.
  • The company is unable to get any form of revenue or business.
  • The company gets revenue, but the losses are way too heavy.
  • The directors opt to vote for liquidation traditionally at the board meeting.

Company Liquidation in the UAE

UAE Company Liquidation calls for a qualified strategy, with rigid adherence to structured procedures. Our customized services offer you an effective alternative plan. Company liquidation is a lengthy and complicated process involving completing several methods, initiating the de-registration procedure, and agreements between staff and many government agencies. To get off the track, you need the proper completion of registration forms, the careful removal of certificates from various government departments.

Company liquidation in Dubai & Abu Dhabi requires a trained approach and rigid adherence to structured procedures. Only a thorough understanding of current rules and regulations will help you fulfill the existing laws’ liquidation requirement.

Commitbiz has provided highly sophisticated Liquidation Services in Dubai & Abu Dhabi to limited liability companiesfree zone companies, and offshore companies across UAE. With several successful closures under our belt, we have acquired valuable experience to ensure our clients’ trouble-free liquidation.

Our professional services include seeking a solution and advising you on goals such as prices, time, and risks of acting as an impartial third party liquidator to find a quick-fix solution. We integrate you and the government to find a simple and mutually agreeable exit strategy during the procedure.

Our distinctive procedure consists of three main stages.

Analyzing the Level of Involvement

At this point, we're sitting with you to explore your company's liabilities, liabilities, and assets. A thorough understanding of this allows one to gain insight into concerns such as:

  • Recovery of Debt
  • Management of statements
  • Disinvestment of properties
  • Intimate lenders and borrowers
  • Perform due diligence adherence
  • Assess charges of liquidation

Once a thorough analysis of all these is done, we move on to planning the liquidation strategy, which involves:

  • Outline the timeline for liquidation
  • Consider potential shareholder full payment

Managing the Company Liquidation

We begin the process of liquidation after the completion of the first step. This process is comprised of the following:

  • Properties disinvestment
  • Debt restructuring and compensation made to creditors
  • Liaison with notaries and government officials
  • Documents Preparation
  • The planning of liquidation accounts

Final Termination

In the final closure stage, the steps include:

  • Termination of agreements
  • Final payments settlement
  • Information and publication
  • De-registration

What are the Procedures in Liquidating a Company?

The first and paramount step is to obtain the valid documentation that permits a liquidation in the first place. It could be an attested board resolution from the notary or court order that administers liquidation.

The next step you require to take is to nominate the services of a liquidation services company. The company will regulate all the processes related to your liquidation of the company.

In some cases, the government has made it mandatory that an official liquidator company must be appointed. The government looks for complete transparency and non-bias in all proceedings related to the liquidation of your company. It is the reason a liquidation services company has to be nominated.

After hiring a liquidation services company, the next step is to notify the authorities under whose authority the company has its trade license issued. For example, Suppose the jurisdiction is the Dubai DED. In that case, the DED must be informed about the company's liquidation, and an official application for license cancellation must be initiated.

The next process is to verify that all your company employees are officially terminated with all their dues cleared, and the employee count must be brought down to zero. The company establishment cards must be abandoned, and the letters must be retained as documentation for the future.

All external acquiesced for cancellation must be obtained, and the revocation of the final trade license must be confirmed through a document from the license issuing authority.

N.B. These steps remain the same for liquidation of the company, but the exact steps may vary slightly due to its legal nature.

What if you do not want to Liquidate your Company, but the company cannot continue?

There may be a scenario in which you may not want to liquidate your business, but you can not continue with the company. In such a system, the license providing authority assumes that any corporation must be allowed not to liquidate, and still have a reasonable chance to keep the business on track.

It is why the Dubai DED has the ability of a company to "freeze" a license instead of abandoning it. While freezing a permit, the company's employees and establishment cards will still be abandoned. The company may always recommend its activities after the freeze period is over by just regenerating the cards and licenses.

Documents Required for Company Liquidation in Dubai, UAE

Different documents must be submitted for the liquidation process and are set out by the Dubai government. These documents are needed both in free zones and on the mainland for corporate liquidation. The necessary documents are listed below:

  • A copy of the permit
  • The composition of the Memorandum of Association (MOA), with any changes
  • Power of Attorney (if any)
  • Passport copies of all the investors
  • Copy of the Emirates ID
  • Investors’ resolution
  • Application form of de-registration

Why Choose Commitbiz?

We have operated liquidation services in the UAE with high accuracy with the support of our professional employees. Unlike most other agencies, we do not transfer your case to third-party service providers and handle it in-house from beginning to end. We’re going to allocate your issue to an expert who will support you through the whole process. It has ensured additional trust and peace of mind for our customers.

We believe every customer deserves an opportunity without thinking about expenses to meet with our professionals. We take time to hear you out and advise you on the measures to be taken without charging any consulting fee precisely for this purpose. To know more about UAE company liquidation services, get in touch with our experts today.


Who should you reach to liquidate your company in UAE?

A notice must be submitted to the Dubai Development Authority (DDA).

Should the company provide advertisements before liquidation?

Yes, in both English and Arabic for a period of a minimum of 45 days.

What are the clearances to be made before dissolving a company in UAE?

  • Customs Department 

  • DDA finance department

  • Government Services Department of DDA

  • IT Department of DDA

  • Facilities management clearance

Does a liquidation report require?

Yes, appoint an auditor for preparation.

What happens to the employee’s Visas during liquidation?

All the Visas should be cancelled and cleared.

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