- September 9, 2020
- Posted by: DBS Editorial Team
- Category: Company Liquidation in Dubai
What is company liquidation in Dubai?
Company Liquidation in Dubai is a procedure conducted to legally close down the company. Under the liquidation process for an LLC or even a Free Zone company the operations of closure need to be done in an authorised manner. Further the assets and other properties under the company’s name is divided among the shareholders, the directors or the creditors mutually.
Liquidation of a company in Dubai or anywhere in UAE becomes inevitable. It is when an organisation does not have liquid funds to hold on the regular transactions. Moreover, creditors are not paid or the company commits some serious offence – under which a company is considered for liquidation. Liquidation could either be compulsory (sometimes noted as a creditors’ liquidation) or voluntary (sometimes noted as a shareholders’ liquidation, though some voluntary liquidations are controlled by the creditors).
A business liquidation also includes compensation for employees, their visa and work permit cancellation. During this process the owner of the business requires to coordinate with the Department of Naturalization and Residency and the Ministry of Labour. There are various welfare and compulsions the UAE government imposes during the termination of the employees.
Apart from the employees the owner also is obligated to deal with getting subscriptions annulled, accounts with the DEWA and Etisalat or Du to be cancelled, closure dealings with the bank, retrieving your deposits and more. Moreover, the lease contract for the office or warehouse leases has to be honoured, cancellation of licenses and various other legal documents are done with proper application process which requires approvals from government and federal authorities.
Why you must not abandon your company in Dubai? And why is company liquidation so crucial?
- Company liquidation is indispensable! Abandoning the company retains the debts and the liabilities of the investors. These debts may increase overtime – as huge interests or penalties can be levied on late payments. The amount may reach to an extent that paying it off can be difficult.
- Abandoning a company in Dubai without liquidating it is also a legal offence in the UAE. The investor or company owners are charged under the UAE law. Investors may be listed as a defaulter or a lifetime ban from entering UAE or even GCC countries may be imposed.
- If company liquidation process in Dubai is not carried-out in a timely manner investor may also be prosecuted for non-payment. Financial institutions, bank accounts and assets may remain inaccessible after a period. If you have any assets or money felt over in such banks account they will be seized by the courts or the banks.
Book a free consultation to know more about company liquidation!
So, to liquidate the company in Dubai and avoid being penalised by the judicial authorities. This is not only a legal requisite but also by liquidating you always have the possibility of reinstating your company in the future.
To know more follow this link https://www.dubaibusinessservices.com/dubai-company-liquidation-license-cancellation/ or simply contact DBS Business Setup today!
Book a free consultation by visiting this link https://www.dubaibusinessservices.com/contact-us/ You may also call on +97145667485 or WhatsApp us on +971551129344.