Deregistration or liquidation of a company anywhere in the world is a hard thing for any business. It is a process where a company is brought to an end and the company’s assets are liquidated. You need to be prepared for the worst. Since the global crisis, liquidation of free zone company in Dubai has become quite a common practice.
We know that Dubai is an investors den and a promising business destination but, things can change drastically, and some businesses aren’t able to make its mark. This leads to economic difficulties and companies have to be liquefied.
This process can take some time and becomes compulsory when the organization isn’t able to generate profits, fails to conduct daily transactions and is unable to pay creditors. Dubai regulatory agency can also impose liquidation on a company under some specific conditions or when the creditors file a dissolution application.
Types of liquidation
Normally liquidation is of two types.
- Voluntary liquidation
- Compulsory liquidation
If the company opts for voluntary liquidation, a meeting of shareholders is held in which a liquidating authority is appointed, and all other points are discussed. Once the shareholders agree on the process, it can start anytime.
Compulsory liquidation is not ordered by the shareholders but, ordered by the court. This second type of liquidation is practiced when the creditors file for the dissolution of their company.
What documents are required for the procedure?
When the decision has been taken by the shareholders, they need to submit all official documents that show that the liquidation decision has been finalized by the company. The documents must mention the name of the liquidating authority. An original registration certificate must be provided supported by liquidator’s credentials. The documents should be notarized.
As soon as the initial steps are completed, the business has to cancel all special licenses and permits that it acquired to conduct economic activities in Dubai. In case the liquidating company has branches in Dubai, the process requires them to provide original documents signed from the parent company.
Following are the documents that the legal representatives of the company are required to file with the Dubai Trade Register
- A document consenting the company liquidation and the appointment of the liquidator
- A copy of a document signed and certified by the director of the company and liquidating agency which consents the process
- Company’s registration and trade license certificates
- Liquidator’s license
- A letter which approves the process of liquidation