The execution of an entrepreneur's idea gives birth to a business organization. Dubai is a global commerce platform that encourages such concepts to take shape. Multiple free zones and segments have been created to give any business entity the flexibility to start their firm.
Dubai Silicon Oasis is an example of a free zone that benefits the tech industry.
In today's dynamic business climate, successfully creating a business entails many risks and possibilities that the company must face. If not, the company begins to decline, and if this decline continues for a long time, the company liquidation or wind-up process is initiated.
This article will provide a comprehensive image of company liquidation in Dubai Silicon Oasis, including symptoms and procedures to be aware of while operating a firm in Dubai Silicon Oasis.
What Does It Mean to Liquidate a Company?
A company's life is brought to an end through liquidation. It's important to remember that a corporation owes no debts or duties to any government or private corporation. The company's assets will be distributed among its shareholders, and a company liquidator will oversee the process. Here are a few signs that a company is about to go out of business:
Indications of a liquidation of a Company
Cash flow issues in the company
- Borrowing cap
- Creditors are forced to file a wind-up petition.
- Late payments to debtors are a problem.
- Loss of significant contracts
- Profits continue to fall.
There are various sorts of company liquidation.
Read More : 7 Tell-tale Signs of Insolvency in Business
Company Liquidation in Dubai: What Are the Different Types?
1. Voluntary Liquidation
The liquidation procedure begins when the directors or owners fail to pay their creditors.
2. Compulsory Liquidation
Creditors compel the decision, usually made after the court approves a wind-up petition.
Dubai Silicon Oasis (DSO)
Dubai Silicon Oasis is a booming free zone in the United Arab Emirates that has become a famous tech-based free zone. It provides a variety of amenities for business investors to come forward and establish a shop. It offers a variety of services, including:
- 100 percent tax exemptions for foreign ownership
- Competitive Pricing
- Office solutions that are ready to use
- Clearance of customs without a hitch
- IP laws that are strict
Steps for Dubai Silicon Oasis (DSO) Company Liquidation
The procedures to liquidate a company in Dubai Silicon Oasis are as follows:
Step 1: The Company inside DSO should notify the authority three months before the liquidation, stating the reason for the company's closing. If we are not following this, there will be fees associated with terminating the leasing arrangement.
Step 2: In front of free zone executives, a board resolution (or shareholder resolution in the case of FZE/FZCO) for the de-registration of a company in UAE, must be attested. Suppose the shareholders are outside the country, or a foreign company owns the firm. In that case, the resolution must be certified and attested by the UAE embassy in that country and legalized by the UAE MFO.
Step 3: All keys to the office must be returned. It doesn't apply to leasehold or freehold businesses.
Step 4: Return the keys to the company post box and close it.
Step 5: Company's original license, certificate of formation & share certificates, lease agreement, and Department of Economic Development's original license (if issued through DSO).
Step 6: Various authorities require the clearances listed below.
- DEWA approval is required. (Only applies to Light Industrial Units, Land Leases, Techno Points, High Bays, Freeholds, and Leaseholds.)
- Dubai Customs Clearance
- DSOA Finance Department approval
- DSOA Government Services Department approval
- DSOA IT Section approval
- Clearance from Etisalat
- Clearance for Facility Management.
Only a Dubai auditor is permitted to prepare the liquidation report.
As previously stated, a company's trade or business license must be canceled. Let's take a look at how a trade license is revoked.
Cancellation of a Dubai Trade License
When a business entity begins winding up, the company's name must be removed from the Dubai Trade Register and revoked the trade license. The following documents will be submitted to put this process into action:
- Shareholders approved a final account statement for the assets.
- A letter from the Ministry of Labor stating that the license revocation has been approved.
- Statement of the company's dissolution, as well as the nomination of the liquidator
- For the international partners, a visa revocation process must be started.
As you can see, there are various duties to be completed during the liquidation process. It can be a lengthy procedure, from the distribution of firm assets to obtaining clearances. Because they are familiar with the entire procedure, a liquidator can help to speed things along at this point.
As one of Dubai's top auditors, we're here to help. We investigate issues such as company liquidation, incorporation, taxation, auditing, and accounting for our clients. Don't hesitate to contact one of the top company liquidators to begin the liquidation process for your firm. They will walk you through the process and assist you in completing it without difficulty. To learn more, give us a call right now.