Company Liquidation in Dubai

MBK Auditing helps companies in the liquidation process and offer all the associated advantages. We provide services for creditors voluntary liquidation (CVL), compulsory liquidation and members’ voluntary liquidation (MVL). The biggest advantage of liquidation service that MBK Auditing offers is your debts will be written off, barring some special circumstances.

The process minimizes your debt repayments you’ve accrued till date. Also, you can prevent any further going payments. When you liquidate your company, any lease or purchase or hire agreements stand terminated. When a business owner enters in liquidation process through MBK Auditing, it enables him to bring an end to the prospects of legal actions.

Though, the condition would be different, if you’ve some form of personal liability for company debt. Otherwise, the creditors will not be able to initiate any legal proceedings. Our liquidation process offers the opportunity to show that your company was closed down voluntarily, and it was not forced to shut down due to creditors’ petitions in the court.

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Company Liquidation is the process of closing down a business. Companies can be liquidated either by voluntary or mandatory liquidation. This process helps stop any malpractice of company owners to leave the country without paying what they owe. Whether you have a business in the Free Zone, Mainland, or Offshore – company liquidation in Dubai is the best way to end the business and operation.

Company liquidation is the official insolvency process that stops the operation of the company and divides its assets among creditors and shareholders. MBK Auditing is a leading auditing and accounting firm that also helps in company liquidation. Our staff enables you to simplify the liquidation process. We provide comprehensive company liquidation services to ensure your business’s smooth and efficient closure.

Why Liquidate Your Company in Dubai?

In the United Arab Emirates, a firm may require liquidation for the following two main reasons –

Achievement of the Company’s Purpose: When a company’s initial goals are achieved, and it is deemed unnecessary to carry on with operations, liquidation is required.
Insolvency: Liquidation may be necessary if a business is deemed insolvent and cannot satisfy its debts.

It is strongly advised to properly liquidate the business rather than letting its trade licence expire, even if there are no outstanding payments to creditors, as neglecting to do so may result in several fines. Additionally, UAE government officials can place the company’s directors and shareholders on a blocklist, making it difficult for them to launch new firms or engage in other ventures.

Depending on the reasons for liquidating your company, there are two ways company liquidation can be done –

Voluntary Liquidation – In this liquidation process, the company voluntarily agrees to dissolve the company due to reasons like mergers or declining profits. Shareholders and creditors usually appoint a liquidator who looks after debt settlement and asset sales – until the company is completely dissolved. There are mainly two types of voluntary dissolvement of the business –
Members’ Voluntary Liquidation (MVL) happens when the company is entirely stable, yet the shareholders choose to close it. In MVL, all the company’s assets are enough to pay off the debts.
Creditor’s Voluntary Liquidation (CVL) occurs when the company cannot pay the debt. The director orders the liquidation process when the debt is not paid.
Mandatory Liquidation—Mandatory liquidation is the process of company liquidation that takes place when the company’s debts are cleared on time, and the investors request the court to deregister the company to claim they’re due. The court then takes further action, where the company owner has to pay the debt forcefully, as advised by the court.

A liquidator is a vital person appointed to manage the liquidation process. This can be an individual or a licensed firm like MBK Auditing, which has the necessary authorization from the relevant authorities. The primary responsibility of the liquidator is to ensure the company’s liquidation adheres to the law.

Process of Company Liquidation in Dubai

The process of company liquidation in Dubai involves the following steps –

In the first step of the process, the company’s shareholders draft a resolution to dissolve the company. For LLCs, the company liquidation is by the Notary Public. If the shareholders are not in Dubai, the notary resolution must be notarized and certified at the relevant UAE embassy, followed by the attestation at the UAE Ministry of Foreign Affairs and Ministry of Justice.
Next, a liquidator is appointed to look after the process and provide a formal acceptance of the letter acknowledging the liquidation.
A provisional liquidation certificate is obtained, and a liquidation notice is published in English and Arabic. Then, all the documents and the shareholder’s resolution are submitted to the applicable licensing body.
A 45-day notice period is initiated, during which the necessary clearances and approvals are obtained. This includes terminating work permits, securing clearance letters from the Immigration Department and Department of Labor, and obtaining clearance letters from utility companies, leasing companies, the Road and Transport Authority (RTA), the Federal Customs Authority (FCA), and the closure of bank accounts. Value Added Tax (VAT) and Federal Tax Authority (FTA).
After the notice period ends, the liquidator prepares the Liquidation report. The final report and all the associated paperwork are submitted to the relevant authority.
The authority then reviews the application. Once approved, they issue a ‘License Cancellation Certificate’ officially confirming the liquidation.

Documents Required for Company Liquidation in Dubai

Having all the documents at hand is essential for a smooth liquidation process. A single missing document might create havoc. So, we have listed a few documents required to liquidate a company –

Photocopy of the original trade license
The Memorandum of Association (MOA)
Power Of Attorney
Photocopy of all Shareholder’s Passport
Resolution of Shareholders
Photocopy of the Owner’s Emirati ID
Application form for deregistration

Contact MBK Auditing for the Best Company Liquidation Services in Dubai

If you want to liquidate the company, you are at the right place. MBK Auditing, as the best business consultant in Dubai, has helped several companies liquidate easily and smoothly. Our staff has a decade of experience answering all the questions regarding liquidation and guiding you to move out of business legally. We take care of all the document preparation, bank account closure, utility cancellation, no liability certification, etc., thus making the process easier for you.

We offer a liquidation process for all business zones—free zones, mainland, and offshore businesses—across the United Arab Emirates.

FAQ

How long does it take to wind up the company?

There is no specific time frame for the liquidation process, as it depends on several factors such as – liquidation type, complexities in a company, the current situation of the shareholders, and many more. At MBK Auditing, we expedite the time by ensuring everything is done by the book.

Can I liquidate my company by myself?

No. It is not possible to liquidate a company yourself legally. You will need to appoint a liquidator to do so. MBK Auditing offers cost-effective and company liquidation services to help you close your business smoothly.

Is liquidation and insolvency the same?

Both are somewhat identical but not the same. Insolvency describes a person’s or a business’s poor financial condition, whereas liquidation means legally winding up or shutting down the business.

What happens to employees when a company is liquidated in Dubai?

In cases where any unjustifiable termination is proven, Article 123 of the UAE Labor Law mandates that the court can order the employer to compensate the employees in addition to gratuity, dues for the notice period, etc.

How much does it cost to liquidate a company in Dubai?

The cost of liquidating a company in UAE depends on several factors, such as the liquidator’s and shareholder’s costs. However, a basic cost of AED 8000 – AED 12,000 (approximately) is required to liquidate a company.