Points to Consider Before Cancelling Company Registration for Liquidation of Company
What Are the Conditions that Allow or Require the Liquidation of a Company?
- Partner-owner agreement to dissolve and liquidate the company
- The company’s loss of more than half of its capital
- Issuance of a court ruling to dissolve and undergo liquidation of the company.
If one or more of these conditions is fulfilled, the partners must initiate the procedures for liquidating the company.
If the partners choose to liquidate the company for the realization of one or more of the aforementioned reasons, then they must:
Issuance of a resolution by the company’s general assembly deciding to leave and liquidate the company, stating the reasons, and mentioning the name, address and fees of the liquidator they agreed to appoint. When the liquidator completes his mission, he issues a report known as the liquidation report.
This is followed by the company’s manager submitting an application, accompanied by the liquidator’s report, to the Department of Economic Development, which in turn issues a certificate of deletion of the company’s registration.
Compulsory Filtering Under Liquidation of Company
It is usually by virtue of a court ruling, and the document specifies the liquidator’s ruling, its fees, and the timeframe for liquidation. Usually, the company liquidator is one of the accountants accredited by the court.
Tasks of the Company Liquidator in Both Optional and Compulsory Cases
- After his appointment, the liquidator announces the liquidation of the company in two widely circulated local newspapers in Arabic and English.
- The liquidator shall announce to the known creditors their addresses and ask them to submit their claims within the mentioned period
- The liquidator shall limit the company's fixed, movable, and liquid property, and work to liquidate what is not liquid.
- The liquidator limits all debts to the company and divides them into privileged and priority debts (such as government debts), debts in favor of employees, and various commercial debts.
- The liquidator shall divide the proceeds of the property among the creditors if it is sufficient, but if it is not sufficient, he shall divide it according to the aforementioned priority rule, and the remainder of it shall be divided among the remaining creditors according to the rule of division by creditors.
Deletion and Cancellation of the Commercial Register of the Company
After the completion of the physical procedures for liquidation, the liquidator issues his report (liquidation report), and then the company’s management submits an application, accompanied by the report, to the Economic Department requesting the deletion and cancellation of the company’s commercial register.
Tasks of the Company Liquidator
- Representing the company under liquidation before others, including before judicial authorities
- Management and operation of the company in cooperation with its managers in relation only to the activities that are still in progress but are under completion
- Collection of debts owed by the company's clients
- Negotiating with creditors
- Disposing of and liquidating the company's property and keeping the company's money in an account designated for liquidation
- Clients use liquidators in cases of bankruptcy of their companies. Farahat & Partners office includes in its ranks the most prominent and leading liquidators in Dubai who have extensive experience in this field. It employs legal liquidators accredited to the courts in Dubai.
Consensual Liquidation and Cancellation of Company Registration
If a decision is issued by the partners to liquidate the company and cancel its registration, the following shall be required:
- Preparing the minutes of the general assembly meeting stating the cancellation of the commercial license and the appointment of an auditor registered in the concerned emirate.
- Preparing a letter stating the acceptance of the approved liquidator to work on the liquidation of the company.
- Submitting the above documents and filling out the cancellation form through the application channels approved in the concerned department.
- The request is submitted to the department for approval of the dissolution of the trade license and the appointment of the liquidator.
- Special payment authorization is issued to obtain a certificate of dissolution of the trade license and to appoint a liquidator.
- The company announces the dissolution and liquidation in two official Arabic-speaking newspapers and waited for 45 days as an announcement period.
Documents to Be Submitted to Cancel Company's Commercial Register Midterm Report
- A letter from the partners stating that they did not receive any objection to the dissolution during the advertising period.
- Cancel the establishment card from the Ministry of Labor and Workers.
- Cancellation of the residency of foreign partners located in the company.
- Obtaining the approval of other government agencies regulating the activity.
- The approval of the Ministry of Economy to delete the company's registration for private joint-stock companies.
- Obtaining the approval of the Securities and Commodities Authority to erase the company's registration for public shareholding companies.
- Submitting the above documents in addition to the documents of the first stage to obtain the approval of the Department of Economic Development.
- Payment authorization is issued to obtain a certificate of deletion of the company's registration, and it will be received after paying the fees.
Do I Have to Submit Financial Clearance Letters?
You must submit financial clearance letters to the following entities:·
- Ministry of Human Resources and Emiratization·
- Dubai Electricity and Water Authority·
- Emirates Telecommunications Group Company (Etisalat)·
- Emirates Telecommunications Company (du)·
- The General Directorate of Residency and Foreigners Affairs Dubai·
- Approval of the Ministry of Economy·
- Any other government approvals
What does Farahat and Partners Office Offer?
Farahat & Co Office is one of the oldest and best legal accounting companies and one of its specialists in company liquidation in UAE, financial insolvency and commercial bankruptcy. Farahat and Partners office are one of the offices approved by the courts in the Emirates, and by the Dubai International Financial Center (DIFC).
Farahat and Partners Security is the most prominent legal accounting office in the Emirates, Dubai, which specializes in corporate liquidation, corporate bankruptcy, and financial insolvency (non-traders) services.