Company Liquidation
What is Company Liquidation
Any type of business in UAE requires cancellation of license and all other related permits to liquidate the corporate institution and distribute its assets to creditors, shareholders and other concerned parties. Legal structures such as mainland LLC, sole establishment or free zone company formation can be systematically dissolved either through voluntary or compulsory liquidation process.
Types of Company Liquidation
There are two types of Company liquidation procedures in the UAE
Voluntary
In voluntary liquidation, a meeting is held by the registered agent with the owner/shareholders to pass a resolution declaring the dissolution of the company. During this meeting a liquidator is also appointed. This type of liquidation is called voluntary since the owner/directors decide to liquidate the assets, even if the current worth of their assets is more than their liabilities.
Compulsory
In compulsory liquidation the court gets involved and orders the dissolution of the company. This mostly follows when creditors pursue their legal means and the company owner/director may refuse to cooperate. Then, a legal appointee of the court is assigned with auditing the company’s assets and implementing the best means of distributing them between creditors or other rightful parties.
Liquidation Officer
A liquidator is a UAE registered agent or firms that represents the company to the public and the Court. The liquidator is assigned during the shareholder’s board resolution and is responsible for settling all remaining debts of the company by selling its assets/property through different channels.