LIQUIDATION
Liquidation is a legal process through which a company ceases to exist. The liquidation process can be categorized as:
- Voluntary Liquidation – Initiated by the shareholders where the company is able to discharge its liabilities (i.e., its assets exceed its liabilities and the company is solvent).
- Compulsory Liquidation – Initiated by creditors or ordered by the Court where the company is insolvent (i.e., its liabilities exceed its assets).
Regulatory Framework
Certain Free Zones follow a License Cancellation or Deregistration process whereby the company’s license is cancelled and the company is deregistered. For license cancellation, the Free Zone Authority typically requires:
- Resolution of shareholders approving the cancellation of the license
- Clearances from various departments such as Immigration, Finance, and other relevant authorities
Upon payment of deregistration fees, the company’s license is cancelled.
However, some Free Zone companies and mainland companies are required to follow the formal liquidation process prescribed under UAE Federal Decree Law No. 32 of 2021 on Commercial Companies or their respective Free Zone regulations. In addition to the above-mentioned documents, a Liquidator’s Report must be submitted in cases of formal liquidation.
Service Scope
MBK assists companies in the voluntary liquidation process across all Free Zones and also for Limited Liability Companies (LLCs) registered under the Department of Economy and Tourism in Dubai and Abu Dhabi.
Mr. Rajeev Kulkarni, Partner of MBK, serves as a registered liquidator in the Dubai International Financial Centre (DIFC). MBK acts as the voluntary liquidator and prepares the liquidation report to be submitted to the relevant registering authorities throughout the winding-up process until the license is terminated and the company is deregistered.
Our services include assistance with publication of newspaper notices, obtaining clearance letters from customs and local authorities, and cancellation of employment visas.
The Liquidation Process
The liquidation process is generally conducted as follows:
- Resolution of shareholders to liquidate the company and appoint a liquidator
- Declaration of Solvency by the Directors
- Realization of assets and discharge of liabilities of the company
- Obtaining clearances from relevant authorities such as Dubai Customs, Telecommunications Regulatory Authority, landlords, and other stakeholders
- Publication in newspapers as required by regulations
- Preparation and submission of the Liquidator's Report to authorities
Requirements from licensing authorities may vary across different Free Zones. MBK provides guidance throughout this process to ensure compliance with all applicable requirements.
Value Proposition
Selecting MBK Auditing means working with a firm that understands the complexities of UAE financial regulations and provides solutions to maintain business compliance and financial stability. The commitment to accuracy, efficiency, and transparency supports businesses in their financial management.
Benefits to Clients
- Formal liquidation process is essential to avoid future liabilities and claims
- Ensures proper closure and avoids penalties and regulatory action
- Provides legal protection to directors and shareholders
- Facilitates orderly distribution of assets to creditors and shareholders
- Ensures compliance with all regulatory requirements for company closure
Registrations and Affiliations
- MBK Auditing LLC can act as liquidator in Dubai and Abu Dhabi, mainland and free zones.
- Our Managing partner Mr. Rajeev Kulkarni is registered as voluntary liquidator in DIFC
- MBK Auditing LLC is registered as approved auditor in all major free zones in UAE including DIFC .
- MBK Auditing LLC is empanelled as auditor with major banking institutions in the UAE
- MBK Auditing LLC is registered as Offshore agent with JAFZA and RAKICC , the two offshore jurisdictions in UAE.
- MBK Auditing LLC is a member of GMNI , an association of legally independent accounting firms worldwide.
- Mr. Rajeev Kulkarni, Managing Partner is a qualified Chartered Accountant, registered with Ministry of Economy and Tourism (MoET)
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