Company Liquidation in Dubai – Closing a Company
The provisions of the Company Law about the liquidation are to be applied unless the company’s MOA (Memorandum of Association) or AOA (Articles of Association) give a specific process for its liquidation, upon resolving the organization’s dissolution an agreement is reached between the partners as to its liquidation’s procedure
The partners of the company’s general assembly by majority resolution must appoint one or more liquidators. If the liquidation is decreed following a Court Order, the Court will appoint the liquidator.
The death, insolvency, interdiction, or bankruptcy of a partner, even by such a partner had appointed the liquidator, would not affect the liquidator’s functions. Additionally, the liquidator should enroll his/her appointment as well as the method of liquidation with the Commercial Register.
In coordination with the manager or chairman of the company, the liquidator must create an inventory of assets as well as liabilities of the company. The chairman and managers have a statutory duty to hand over the organization’s accounts, documents, books as well as assets to the liquidator.
- Prepare a detailed statement of company assets and liabilities as well as a balance sheet to be signed by him and manager or chairman of the company
- A book of accounts should be kept for the liquidation of transactions
- Preserve the assets of the company and its rights as well as the company debts
- Open a bank account in the name of the company ‘in liquidation’ and deposit company funds.
The liquidator shall be the representative of the company in any litigation regarding the company. He/she must satisfy the creditors of the organization by selling its moveable assets or real estate in an auction or any other method specified in the liquidation process. The liquidator should not embark on new business unless it is necessary for the completion of previous works, otherwise, he will be personally liable for the consequences.
The liquidator must notify all the creditors by registered letters of the commencement of the liquidation. Such notice has to be published in local newspapers and also provides not less than 45 days during which the creditors must present their claims.
At the end of the liquidation, a final account must be prepared and then presented to the general assembly or the partners. The liquidators will then get the record at the end of the liquidation in the Commercial Register as well as request that the company be removed from the registration
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