How to liquidate your business in Dubai?
Company liquidation is the formal process of dissolving a business entity. In Dubai, this process is governed by specific regulations depending on whether your company is registered in the mainland, a free zone, or offshore. While financial distress is a common reason for liquidation, other factors, such as strategic shifts, regulatory changes, or simply completing a project, can also necessitate this step.
Key Steps in the Liquidation Process
Shareholder Resolution:
A formal resolution must be passed by the shareholders, outlining the decision to liquidate the company. The resolution should appoint a licensed liquidator to oversee the process.
Liquidator Appointment:
A reputable liquidator, often an audit firm, is appointed to handle the liquidation process. The liquidator will assess the company's assets and liabilities, collect outstanding debts, and distribute assets to creditors and shareholders.
Legal and Administrative Procedures:
The liquidator will file necessary paperwork with the relevant authorities, such as the Department of Economic Development (DED) for mainland companies or the specific free zone authority. Notices of liquidation may be published in local newspapers.
Asset Realization and Debt Settlement:
The liquidator will sell the company's assets to generate funds.
Outstanding debts, including employee salaries, supplier payments, and loans, will be settled in a prioritized manner.
Final Report and Dissolution:
Once the liquidation process is complete, the liquidator will submit a final report to the relevant authorities.
The company will be officially dissolved, and its name will be removed from the commercial register.
Important Considerations