Why Business Entities and Company Owners Choose for Liquidation

ll business entities not necessarily become able to thrive in the competitive market place, as anything may become possible in the present competitive world. Thus, in some cases, a legitimate business unit fails to generate enough profit for its stakeholders and shareholders or it experiences various unseen/unavoidable economic hassles.

In such situations, such company or business owners decide to windup their business operations, while consign various properties and aspects among its shareholders and credits. This procedure is company liquidation and it involves certain rules and regulations, as mentioned in liquidation of free zone company in Dubai. Even a few experts call it as winding-up procedure, liquidation of creditor or dissolution.

When Liquidation Becomes Essential

• Liquidation of free zone company becomes essential when a particular company does not possess capital in adequate amount to accomplish its daily transactions or allege of involving in any severe offence.
• Alternatively, liquidation is essential when a company seeks to migrate to its home country or any other country.
• Along with this, if there are severe misdemeanors, regulatory bodies may file a lawsuit in opposition to the business entity or company for winding up its operations.

Key Requisites for Liquidation of any Free Zone Company in Dubai/UAE

To step ahead for liquidation of free zone company, you have to make sure about following important things-

• Hire any licensed and registered liquidator belonging to any region of United Arab Emirates
• Get labor clearance and immigration from various free zone company/business authorities
• You should keep in mind that your liquidation letter is acceptable only when a registered auditor of Free Zone Company or Free Zone Establishment approve it.
• Settlement of payment takes place only in the free zone
• Clearance certificate from any registered free zone authority becomes mandatory in case a business unit shifts its operation from the free zone.

Closure of Business in Free Zones of UAE

While summarizing the procedure involved in closure of business in any free zone of UAE, we have found three different ways, which include-

• Bankruptcy

You may claim for bankruptcy when judiciary passes on commercial transaction law 1993 of UAE or Dubai.

• Liquidation of a Creditor

According to this process, company owner has to assert a specific company shut down and gives call to schedule its meeting with various company creditors.

• Summary Liquidation

Summary liquidation is a speed-up procedure and it requires only 6months period for the closure of any company. This works only whenever any company does not possess liability and is able to release its essential liabilities within the respective period.