The DIFC liquidation process follows a set of clearly defined stages, as outlined in the DIFC Insolvency Law. If a DIFC company becomes insolvent and is unable to repay its debts, liquidation of the company becomes a mandatory step.
If your business is facing involuntary liquidation within the Dubai International Financial Centre (DIFC), or if you believe that DIFC liquidation is the most suitable course of action for your company, it is strongly recommended to seek assistance from approved liquidators.
First and foremost, you would have to decide that you want the company liquidation. If there are several directors of the company other than yourself, you would have to convene with them. During this meeting, a liquidation resolution will be passed. The resolution has to appoint liquidators in DIFC and the official recognition of the company regarding its insolvent position.
There are two stages to getting a liquidation in DIFC. They are as follows:
As part of a company liquidation process, including for a DIFC company liquidation, an insolvency expert will be arranging for the business’ assets to be valued by a professional or by a firm of value. It can happen in a meeting of directors or shortly after. Agents will be visiting the premises of the business to produce a complete and exhaustive list of the inventory of the business and its assets. A valuation will be given and it will be based on a breakup.
Take note: There should not be any company assets sold if the meeting of creditors hasn’t taken place yet. Approved liquidators in DIFC, UAE can, however, speak with all interested parties before the meeting of the board of directors to attempt or increase the value of all potential offers.
The company liquidator that was appointed by the board of directors is under oath to maximize the realization of the sale of assets of a company under liquidation. In a company, the liquidator can sell assets back to directors regardless of whether or not creditors or partners are happy with the liquidator’s decision.
Also read: Types and Process of Voluntary Liquidation in UAE
There are fees to be settled with local authorities for the finalization or completion of company liquidation in Dubai International Financial Centre. An appointed liquidator has to keep records of transactions and time that is spent on the process of liquidation.
It’s often the case for approved liquidators in UAE to seek a board resolution during the meeting of directors that costs are settled on a time basis.
In any type of liquidation, whether voluntary or mandatory a liquidator has to set out all the details of costs that will be paid for the professional’s services. The liquidator also has to get the approval of the creditors.
In the event costs of hiring the liquidator exceed the original estimates approved by company creditors, additional costs will only be settled when creditors all agree on them.
Typically, fees and costs of a company liquidator DIFC are settled by asset realizations.
Also read: Compensation for Employees When Businesses in UAE Close
Closing a company in the DIFC involves a process that can be both time-consuming and highly stressful. To ensure compliance with all statutory requirements, we recommend consulting with experienced liquidators in the DIFC.
Farahat & Co., a regulated firm listed with the Dubai International Financial Centre (DIFC) as an approved financial auditor/liquidator, is an ideal choice.
The firm is also listed as an expert witness with the Dubai and Abu Dhabi Courts, as well as a regulated liquidator.