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Liquidation Process for A Company with No Assets

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 trough any means, the companies think of only one possibility which is that of the liquidation in UAE. Directors of the companies also have the option of liquidating the companies or closing company in Dubai UAE on their own, voluntarily, whenever they want rather than waiting for the creditor to wind up the company.

Company liquidator: 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.

Read More: The Process for De registering A Company In UAE

What happens when a company with no assets get liquidated?

When the company has no assets, the directors than 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 the 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 companies 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. Liquidation of 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 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 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.

Read More: How Does Liquidation Work for Insolvent Companies?

How much money is required to liquidate a company with no assets?

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 makes them go for liquidation. For this reason, it is advisable to take the help of legal consultants for company liquidation in Dubai, UAE. This not only reduces the burden from the company shareholders but also makes the processes to be carried out in a legal manner.

Find more: Two Types of Liquidation that Shareholders and Creditors Can Choose From

Liquidation of 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.