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Company Liquidation in UAE

What is Company Liquidation ?

Liquidation is the method by which an LLC company (or a part of a company), sole establishment, Dubai free zone company, or institution closes its operation, and therefore the assets and property of the corporate or institution are distributed to creditors and shareholders (owners) of the UAE registered Company.

Type of Company Liquidation

Voluntary Liquidation

In case of voluntary liquidation, the shareholders of a company will decide to wind up the company as they have no money to pay for creditors. In this type of liquidation, priority is given to the creditors.

Compulsory Liquidation

Compulsory liquidation is a type of company liquidation that is put forward by court order. Here, the assets of the company are distributed to the creditors and contributors based on the priority of claims. Once you plan to close your business, the government entities should be notified of the same, so as to avoid any accumulated fines and penalties.

The liquidation of the company in Dubai, UAE becomes inevitable when a corporation doesn’t have liquid funds to hold on day to day transactions of the company, creditors aren’t being paid or the company commits some serious offense, and regulatory authority or agency in UAE of Free Zone Authority accountable for the relevant sector files a suit for the affecting the operations of the corporate.

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