Company liquidation is the process of winding up all operations of a company and initiating its formal closure. A key requirement of company liquidation in UAE is the appointment of a liquidator who works on behalf of the company to proceed with the entire procedure and finally submit a report to the registrar. The role of a liquidator is an extensive one and involves several legal procedures too.
This article takes a look into all the duties and role of a liquidator during company liquidation
Confirmation of appointment
Immediately after appointment, the first role of a liquidator is to notify the registrar of company liquidation in UAE by registering the decision by the company to liquidate itself, and appoint a liquidator in this respect. In case the liquidator misses out this crucial step, every decision made by the liquidator stand null and void.
Compilation of Records
The next role of a liquidator is to collect all documents related to the company’s assets, its liabilities, stocks, inventory and more. The law of UAE directs all stakeholders, owner, or shareholders to fully cooperate with the liquidator in this respect. It is their legal responsibility to provide any missing detail or document.
The liquidator takes a keen look into all details and compiles a list of the company’s assets, liabilities or debts. This list is shared with the Director or Manager of the company who signs it to confirm the facts stated.
Bank Account
The liquidator opens an account for the liquidating company where all pending debts are deposited. This account is not used for any other purpose except to receive remaining payments or liquidated assets. This amount is later used to clear the company’s debts or division of assets.
Settling Debts
The liquidator has the legal authority to sell the company’s assets to clear debts owed by the company to its suppliers or vendors, or employees in the form of salaries. The amount payable to the liquidator for his services is also included in this list. Clearing the debts is the most important step. While clearing debts, the receives inside the company are preferred i.e. the employees. They are paid their salaries. Remaining debts follow.
The liquidator hold the authority to sell company assets through auctions or other ways. However, the liquidator must not sell all assets at once. By doing this, the liquidator protects the interests of the company too.
In case there are still debts present even after selling all company assets, the debt amount is divided among all shareholders to pay. If there are no shareholders, it is the responsibility of the sole owner to clear all debts.
Division of Assets
If some assets remain after clearing out of all debts, the liquidator divides it among all shareholders according to their percentage of share. In this case, the liquidator cannot equally divide the assets as each shareholder receives their share according to their percentage. In case no shareholders are there, the entire remaining asset is transferred to the sole owner.
Presentation of Accounts
After completing he liquidation process, the role of a liquidator is to submit all details of accounts and their utilization to the Registrar. The liquidator also publishes the news of company liquidation to local newspapers of UAE. One news must be in English, and the other in Arabic. This allows any claimant of debts to step forward, or express this or her objection to the whole process. However, this can be done within 45 days of publishing news. After that, any person or party can make no claims.
The liquidator requests the registrar to remove the company from list of registered businesses. Thus, the process completes.
About BS Auditing
The process of company liquidation in Dubai UAE is extensive and meticulous. Only a skilled liquidator, well aware of his roles and responsibilities can execute the process successfully. BS Auditing of Accounts has the best professionals with immense knowledge and skill in the liquidation process in every free zone.
Book your consultation today for a successful liquidation process. For detailed guidance and assistance, feel free to contact us:
• Office # 0641, Tamani Arts Offices, Business Bay, P.O. Box 111390, Dubai, UAE
• +971 4 570 7357
• +971 58 108 5690
