The method to undergo liquidation of a company in the United Arab Emirates (UAE) varies depending on where the firm is located. In the United Arab Emirates, each area has its own rules for corporate dissolution. As the UAE has several designated business zones and each zone is overseen by its municipal government.
To effectively liquidate their firm, the business owner(s) must adhere to all applicable requirements.
While this may make free zone company dissolution seem perplexing to some, it also contributes to a healthy and controlled corporate climate in which everyone may thrive.
The Dubai International Financial Centre (DIFC) established a set of guidelines for the liquidation of a company in the United Arab Emirates.
The fundamentals of liquidating a company are the same as in the rest of the globe. When a corporation goes insolvent or is ruled unsuitable for running by its shareholders, it is liquidated in the UAE. Liquidation is a method of winding down a failing business in a systematic manner.
The UAE’s additional requirements ensure that the Company’s loose ends are tucked away in this methodical procedure.
Financial Audit And Liquidation Of Company Under DIFC
Companies based in the DIFC free zone must adhere to particular restrictions, making financial audits mandatory. The audit firms in Dubai, founded in the DIFC, are regulated by the DFSA (Dubai Financial Services Authority), and it is required for all companies to have their audit done.
Each financial year, a financial audit must be conducted and submitted to the authorities within four months after the end of the financial year. The financial statement audit is required because it aids in the improvement of the Company’s management and serves as a check to ensure that all laws and regulations have been followed, and DIFC-approved auditors must perform it.
If any of the following conditions apply, you must appoint a company liquidator by approving a resolution by all of the board directors in a board meeting:
- You’re worried about your company’s future,
- You’re losing money and don’t have enough money.
- You believe the Company is approaching insolvency, or
You intend to dissolve the corporation.