Liquidation & Deregistration

Liquidation & Deregistration

There are cases that companies are not any more functional or there is simply a mutual agreement that it should be the end of a certain business. If your organization is in a situation like this, it can be expected that it’s going to be a dissolved company in the near future. There are a couple of other names that liquidation is known for, such as winding-up or dissolution (which is the final step of the process) or deregistration.

Tell-tale early warning signs of insolvency in business can be noticed by anyone, especially the employees themselves. Sometimes it lurks around the building itself or it is obviously seen in the financial statements or records of the organization. Having not enough funds to carry on with the day-to-day transactions of a firm, or failure in paying creditors with overdue debts, or a serious offense that has been done by the side of the company are some of the major causes for a closing company in Dubai, UAE or for shareholders or the owner himself to decide to go with a liquidation.

Liquidation of a company is a process, perhaps a long one if not handled by an agent. Within this process, the company’s affairs are finalized, which means there is a liquidation stock or the assets are sold or fairly distributed to the creditors and shareholders and past actions are investigated. According to the commercial law of the United Arab Emirates (UAE), liquidation of a company should be done or the company can or must be liquidated and deregistered (company deregistration in Dubai) in the following cases (one case only is enough):

- If the majority of the shareholders decide to liquidate the company.

- If the company suffers insolvency, which causes accumulated loss that is greater than half of the authorized capital.

- If there is a court ruling to dissolve and liquidate the company.

- Voluntary liquidation can also happen if a vital member of the organization exits the company and the shareholders decide not to continue operations.

A close of business can be caused by various factors, but it is certain that it is not indeed an easy task, that is why it is best to be done with specialists in the field.