Liquidation Services in Dubai

Liquidation is the process of winding up a company’s affairs, settling its debts, and distributing any remaining assets to shareholders before officially closing the business. In Dubai, this process is regulated by specific laws and procedures that depend on the company’s jurisdiction, ownership type, and the nature of liquidation. Whether voluntary or compulsory, company liquidation in Dubai requires careful planning, adherence to legal requirements, and the expertise of professionals to ensure a smooth and compliant process. Reyson Badger is a  trusted liquidation service providers in Dubai and across the UAE. Our experts simplify the entire procedure using their extensive experience in handling company liquidations in the UAE.

What Affects Company Liquidation in Dubai?

Several factors influence the liquidation process in Dubai, including:

• The Type of ownership: The structure of the company (e.g., LLC, sole proprietorship, or free zone entity) determines the specific liquidation procedures. Each structure has its own legal requirements and timelines for closing a business. Compliance with relevant government authorities, such as the Dubai Economy (DED) or free zone authorities, is crucial to avoid penalties and process delays.
• Types of Liquidation: Liquidation can be voluntary or compulsory.
  • Voluntary Liquidation: Voluntary liquidation occurs when shareholders decide to dissolve the company. This typically happens when the company is no longer profitable or the owners wish to pursue other ventures. The process involves passing a shareholders’ resolution, appointing a liquidator, and settling all outstanding obligations.
  • Compulsory Liquidation: Compulsory liquidation is initiated by a court order or regulatory authority, often due to insolvency, legal violations, or failure to meet financial obligations. This type of liquidation is more complex and may involve additional legal scrutiny.
• Jurisdiction of Registration:  The liquidation process varies depending on whether the company is registered in the mainland, a free zone, or offshore, as each jurisdiction has its own specific rules and authority requirements.

Role of a Liquidator in Dubai

A liquidator is an approved/licensed professional or audit firm accepted by the relevant authority (e.g., DED/DET for mainland or the respective free zone authority). Free zones may have their own approved lists and procedures. Reyson Badger, an experienced liquidation service provider across the UAE and its free zones, works with approved liquidators to ensure legal compliance and a seamless closure.

Their responsibilities include:

• Managing Company Assets: Identifying, valuing, and selling company assets to generate funds for debt settlement.
• Settling Debts: Notifying creditors and ensuring all outstanding liabilities are paid.
• Distributing Remaining Funds: Allocating any surplus funds to shareholders after debts are settled.
• Ensuring Legal Compliance:  Adhering to UAE laws and completing all necessary procedures, including VAT and corporate tax deregistration with the FTA.
• Investigating Financial Records: Reviewing the company’s accounts and preparing final liquidation statements or audit reports to ensure accuracy, transparency, and compliance with UAE commercial law.
• Final Company Closure: Submitting the necessary documentation to dissolve the company officially.

Liquidation Process in Dubai

The liquidation process involves appointing a licensed liquidator who will sell the company’s assets, settle its liabilities, and distribute any remaining funds to shareholders and creditors. It concludes with the company’s official dissolution, ensuring full legal compliance and a smooth closure of operations.Here are the key steps involved in the detailed liquidation process in Dubai.

Step 1: Initiating the Liquidation

Shareholders must pass a resolution to dissolve the company.
The resolution must be notarized and submitted to the relevant authority.

Step 2: Appointment of a Liquidator

A licensed liquidator is appointed to manage the process.

Step 3: Public Notification

A notice of liquidation must be published in local newspapers (typically in both Arabic and English and often in two publications) to invite creditor claims.

Step 4: Notice Period

A public notice period (commonly 45 days for mainland companies) allows creditors to submit claims; however, free zones set their own time frames and publication rules, which may be shorter or simplified.

Step 5: Settling Liabilities

The liquidator notifies creditors and settles all outstanding debts using the company’s assets.

Step 6: Final Deregistration

Once all clearances (from FTA, MOHRE, GDRFA, utilities, and bank closures) are obtained, the liquidator submits a final liquidation report and applies for license cancellation. The company is officially deregistered upon issuance of the cancellation certificate by the competent authority.

For expert assistance with the liquidation process in Dubai, feel free to contact us at info@reyson.ae or call us at 0501130164. Our team is here to help!
 

Documents Required for Company Liquidation in the UAE

The following documents are typically required to initiate the liquidation process:

• Trade License Copy
• Memorandum of Association (MOA)
• Shareholders’ Resolution for Dissolution
• Copies of Shareholders’ Passports and Emirates IDs
• Power of Attorney (if applicable)
• Deregistration Application Form
• Clearance letters such as: MOHRE (no sponsored employees), FTA tax deregistration/clearance (VAT and corporate tax where applicable), GDRFA visa cancellations, final bank statements/account closure, utility clearances (DEWA, telecom), landlord/lease termination NOC, and any free-zone authority clearances.
• Liquidator’s Report

What Takes Place When a Company Enters Liquidation?

• Sale of Assets: In order to raise money to pay back creditors, the company's assets, including real estate, machinery, and inventory, are sold off. The liquidator may sell these assets through private sales or auctions.
• Debt Settlement: The company's obligations and debts are paid off using the revenues from the sale of its assets. A legal hierarchy governs how creditors are paid, with secured creditors being paid before unsecured creditors.
• Employee Rights: During liquidation, employees' rights are safeguarded. They have the right to receive any unpaid salaries, accumulated vacation time, and other benefits. Employees may also be eligible for severance or redundancy pay in specific circumstances.
• Shareholder Distributions: Any money left over after paying off debts and overhead is given to the company's shareholders. Usually, the distribution is carried out in accordance with the shareholder agreements or the company's articles of association.
• Legal Dissolution: Once all liabilities are settled and the final reports are approved, the company is officially dissolved. Its trade license is cancelled, and its name is removed from the commercial register, meaning it ceases to exist as a legal entity in the UAE.
• Impact on Directors and Officers: After all obligations are met and legal formalities are completed, the company is struck off the register and ceases to exist as a legal entity. However, directors or shareholders may still be liable for personal guarantees, fraud, or mismanagement under UAE law.

The overall goal of the liquidation process is to fairly and transparently divide the company's assets, settle its debts, and wind up its business in an orderly manner.

Company Liquidation Services in Dubai

Company liquidation in Dubai is a complex process that requires careful planning, legal expertise, and attention to detail. Whether you are dealing with a voluntary or compulsory liquidation, having the right team of professionals by your side can make all the difference.

At Reyson Badger, we specialize in managing both simple and complex liquidation processes across different industries and UAE jurisdictions, including mainland and free zones. Our professionals ensure that every stage, from asset valuation and debt settlement to final deregistration, is handled with precision and compliance. With years of experience and a deep understanding of UAE regulations and commercial law, we provide tailored solutions to meet your specific needs.

If you are considering company liquidation in UAE, contact Reyson Badger today for a seamless and stress-free experience. Let us help you navigate the process with confidence and professionalism.