When the company takes the decision of not continuing its business activities in the UAE, it goes for liquidation. In most cases, when the companies see no chance of getting rescued through any means, the companies think of only one possibility which is that of the company liquidation in UAE. Directors of the companies also have the option of liquidating the companies or closing the company in Dubai, UAE on their own, voluntarily, whenever they want rather than waiting for the creditor to wind up the company.
You are also interested in reading What are the Roles and Duties of a Liquidator?
Voluntary Liquidation by the creditors themselves.
Creditors’ Voluntary Liquidation (CVL) takes place when the laws in UAE demand the liquidation of the company because of the fact that the company is not having assets to get back to its previous posture.
No Asset Liquidation
The Creditors’ Voluntary Liquidation (CVL) brings along a number of advantages for the directors of the companies;
Less Stringent Investigation
In the case of CVL, the investigations of the officeholders are less likely to be severe than that of the compulsory liquidation. In this way, the possibility of any action that could be taken against the directors of the company gets reduced to a great extent.
If the directors have worked under any sort of employment contract, they would be able to claim the redundancy pay. It would be possible if and only if the directors have worked under the employment contract for at least 2 years.
You are also interested in reading The Process for De registering A Company In UAE
What happens when a company with no assets gets liquidated?
When the company has no assets, the directors then initiate the process of CVL by online means. This is carried out because the process of liquidation no more requires the meetings of creditors of the company. That is why the process of liquidation gets escalated quickly.
The resolution of winding up the company is passed if and only if 75 percent of the shareholders of the company vote in the favour of liquidation. Also, when a company decides to go liquidate itself, the company’s house is informed and the resolution is announced in the Gazette as well.
Appointment of a liquidator in Dubai, UAE
The main course behind appointing the liquidator is that of assisting in all the liquidation affairs. The liquidation of a company is not at all an easy task. The already stressed company would rarely want to carry out the liquidation processes on its own. That is why it is better to seek help from the liquidators in Dubai, UAE. They understand the statement of affairs and thus help in preparing them. Furthermore, they make sure that they liquidate the company by keeping into consideration all the legalities.
What happens after the completion of the liquidation procedure in the UAE?
After the completion of the liquidation process, the company gets closed down. The name of the company is removed from the register at the company’s house.
Note that, if the investigations of the liquidator are necessary, they would still continue even after the removal of the company from the register.
How much time does it take to liquidate a company with no assets?
CVL may take about a year to proceed properly. The timescale may get reduced due to the fact that it is a no-asset liquidation.
You are also interested in reading How Does Liquidation Work for Insolvent Companies?
Company directors are eligible to claim their redundancy payment from the National Insurance Fund (NIF). Through the fund, the fees of the liquidator are paid and some of the debt of the company is also paid through it.
For small Limited Liability Companies, the cost is quite less because it is a no-asset liquidation. Its cost is reduced as compared to the standard liquidation.
Company liquidation is a very stressful process. Taking legal help in such cases may save the company from unnecessary problems. The liquidators have a better understanding of laws and orders thus carrying out the processes in better ways.
We all know that different companies have to go through different situations which make them go for liquidation. For this reason, it is advisable to take the help of a company liquidator in UAE. This not only reduces the burden on the company shareholders but also makes the processes be carried out in a legal manner.
Find more: Two Types of Liquidation that Shareholders and Creditors Can Choose From
Liquidation of the company in Dubai
For more information regarding no asset liquidation, you must consult the company liquidation services in Dubai firms like FAR so that you may tell them your company’s real condition. The company liquidator experts at FAR help the companies with the best business liquidation services. They make sure to work in the best possible way to satisfy their clients.
You can contact them and consult them whenever you feel the need. They would be there for you and guide you about the best step you should take. So, do not hesitate and feel free to contact them and seek help from them.
