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The Commercial Companies Law in the United Arab Emirates is meant to help businesses grow and improve the country's economy. It has rules to ensure that companies are well-managed, protect the rights of shareholders and partners, encourage foreign investment, and promote corporate social responsibility. If a company needs to be closed down, the law says that it should follow certain procedures unless the company's contract or articles of association say otherwise.
When a company needs to be closed in the UAE, there are specific rules to follow that are stated in the Commercial Companies Law. These rules were updated in 2015 and further amended in 2018. If the company's contract or articles of association state another method of liquidation in UAE, that method can be used instead. The partners in the company can also agree on a different method of liquidation.
When a company is dissolved, the managers or board of directors lose their power to manage the company. They are responsible for running the company until a liquidator is appointed. The liquidator will then decide how to manage the company during the liquidation process.
Company liquidation is the process of ending a business and distributing its assets to those who are owed money. This includes selling assets and dividing the money between partners and creditors. Sometimes, a company needs to be terminated for various reasons. A liquidator in UAE is appointed to manage the process of liquidation. Once the process is completed, the company is officially dissolved, and its registration is cancelled.
In the UAE, if a company owes money to creditors and can't pay it back, it may face compulsory liquidation. This means that the creditors can take legal action and request the court to liquidate or declare the company bankrupt.
Company liquidation in Dubai, UAE, is in two ways.
Voluntary Liquidation happens when the company decides to start the process themselves, without involving the court.
Compulsory Liquidation, on the other hand, is when the court makes the decision to liquidate the company because it owes money it can't pay back to its creditors.
They are responsible for representing the company in court and fulfilling its debts. The liquidator also sells the company's movable or real estate through a public auction or any other method, unless otherwise stated in their appointment document. They may even sell the company's assets as a whole without the need for permission from partners or the company's general assembly.
When a company goes through liquidation, the liquidator will create a list of all the company's assets and debts. To do this, the company's managers or chairman of the board of directors must give the liquidator access to all the company's funds, accounts, books, and documents. This inventory will help the liquidator determine how to distribute the company's assets and settle its debts.
During the liquidation process, the liquidators in Dubai create a detailed list of the company's money and obligations. This list includes a budget and must be signed by the company's managers or chairman of the board of directors. The liquidator keeps a book to record all the liquidation work that is done.
The liquidator must inform all the creditors of the company in writing about the liquidation process and invite them to submit their claims. The notification should be published in two local newspapers, one in Arabic and the other in English, and should provide a grace period of at least 45 days for creditors to submit their claims. Once the debts are resolved, the liquidator will notify the creditors.
In company liquidation, a liquidator is responsible for representing the company in court and fulfilling its debts. They can sell the company's assets by public auction or other means unless otherwise stated in their appointment document. The liquidator can also sell the company's assets as a whole without approval from partners or the general assembly. Their duties also include preparing a list of the company's money and obligations and keeping a record of the liquidation work in a book.
During company liquidation, the liquidator must pay off the debts using the company's available funds. If there is not enough money to pay all debts, the liquidator must pay a proportion of these debts while ensuring that the rights of privileged creditors are not affected. Any debt that arises from the liquidation process should be given priority over other debts and paid using the company's funds.
Looking for professional and reliable company liquidation services in Dubai? Reyson Badger, one of the leading accounting and auditing firms in the UAE can help. Our team of experts are well-versed in the legal requirements and procedures of company liquidation in Dubai and across the UAE, making the process as smooth and stress-free as possible for our clients. With our experience and expertise, we can handle all aspects of liquidation in UAE, including inventorying company funds and obligations, representing the company, notifying creditors, fulfilling debts, and preparing detailed reports. Whether you need assistance with voluntary or compulsory liquidation in UAE, we can provide the tailored services and support you need.