When the procedures and activities related to the liquidation of the company are completed financially, the end of the liquidation process must be announced and recorded in the Commercial Registry or the Department of Economic Development. After that, the company’s registration is canceled and its licenses are cancelled, and the competent authority issues a certificate stating that the company has been removed from the commercial register.

In the United Arab Emirates, there are some scenarios that call for dissolution and liquidation of the company, and this is the responsibility of the legal director of the company. Among these scenarios:

  • If the company has incurred losses exceeding half of its nominal capital.

  • In the event of the death or withdrawal of one or more partners, leaving only one partner in the company.

  • By decision of the majority of the owners of capital shares, provided that their percentage is not less than 75% of the value of the nominal capital, the company can be dissolved and liquidated.

  The partners do not necessarily have to go to court to request a dissolution and liquidation of the company. It is legally permissible for the liquidation decision to be made consensually between the partners.

  Consensual liquidation procedures - legal liquidator:

  If the required quorum is achieved, the partners can reach a written agreement to dissolve and liquidate the company, which takes the form of an “extraordinary general assembly resolution.” In this agreement, the partners decide to dissolve the company, appoint the liquidator, and determine his fees, whether lump sum or monthly. The minutes are authenticated by a notary public. The liquidator's appointment document must specify the specific period for the end of the liquidation, and the liquidator's powers. You must also adhere to the relevant provisions of the Companies Law, and this is applied in the United Arab Emirates.

After that, the liquidator begins to perform his task, and the law is mandated to announce the liquidation in two widely circulated local newspapers in Arabic and English.

  To assist you in liquidating companies in the UAE:

Ali Al Hammadi Law Firm and Legal Consultations includes experts in the field of company liquidation and legal accounting. The company's liquidation process is complex and legal, and includes complex legal aspects, and the need to seek qualified experts is emphasized. We provide support and advice in this context and in the field of financial insolvency.

There are many questions that arise when considering liquidation of a company,

Does a company under liquidation have the right to stop fulfilling its financial obligations to creditors and employees?

  Answer: Yes. Debts are dropped with the announcement of the company's liquidation.

  What is the fate of those debts?

Creditors submit their claims to the liquidator supported by documentary evidence, and if sufficient money is available, the liquidator is paid.

  If it is insufficient, the liquidator will pay the debts according to the priority rule in payment, but in a proportional manner.

  Should the directors of the company under liquidation stop interfering in its management?

  It is entirely up to the liquidator, who can ask the director to continue managing the company but under the supervision of the statutory liquidator.

  What if the company under liquidation has cases and lawsuits in court or in arbitration?

  The legal liquidator must intervene before the court, and must announce to everyone who is suing the company that it is under liquidation.

  What if one of the creditors obtains a ruling against the company under liquidation and the file for implementing the ruling is opened?

  The legal liquidator must submit a request to the enforcement judge requesting that the implementation of the judgment be suspended until the liquidation is completed, and the enforcement judge in that case responds to the request.

  In general, liquidation may be easy and risk-free if it is entrusted to an experienced liquidator and expert in this field. But it can be complex and carry risks if a qualified liquidator is not appointed. Before proceeding with the liquidation of the company, it is preferable to consult specialists and experienced people, and it is advisable to contact the Ali Al Hammadi Law Office.

  Gradual filtering:

In the event that the partners or shareholders decide to liquidate the company while it is continuing to carry out its activities, then the matter of liquidating it will take a time that may be shortened or extended according to the ongoing business and activities, as the company may not be liquidated before the completion of all ongoing business and activities, which is known as gradual liquidation.

Quick filter:

However, if the company’s business and physical and commercial activities have stopped, then it may be possible to complete its liquidation and remove its registration from the commercial register in a shorter time.