A company is an artificial person which comes into existence through a process of law. Therefore its life can also be brought to an end only through the process of law. Since a company has a separate existence from its members, its life span is not affected by the life span of any of its members. One of the ways to dissolve a company is to resort to the process of winding up or liquidation. Therefore, when the process of winding up commences, the company is said to be in liquidation. When the directors or members want to liquidate the company, they will have to follow the procedure stated in the company law. Liquidation of a company is the process whereby its life is ended and its property administered for the benefit of its creditors and members. An administrator, called a liquidator, is appointed and he takes control of the company, realises its assets, pays its debts and finally distributes any surplus among the members in accordance with their rights as per the company law. The term ‘Liquidation’ and ‘Winding up’ has been used synonymously.
We are often asked about the process and procedure to company liquidation and unfortunately, there is no single answer to this question. It is important to know whether the liquidation is voluntary or compulsory and whether or not the company is solvent. Whilst the general process in both voluntary and compulsory liquidation legally begins with petitioning the Court, there are steps which must be taken prior to the petition in all cases. The procedure will be handled differently for a compulsory liquidation that it would be dealt with in a voluntary liquidation.
The Process of Winding up of a company is that a Liquidator is appointed who is entrusted with the following duties:
• Selling off assets of the Company
• Paying off its Liabilities
• If there is any deficiency to pay to the creditors, the shareholders (Contributories) are called upon to pay unpaid amount on their shares
• If there is any surplus after clearing off the liabilities, the liquidator then distributes surplus funds to the shareholders.
• After going through the above process, the registrar of Companies removes the name of the company from the register of company. The company is then formally dissolved.
In short, only you have to appoint us as liquidators of your company and our experts will give you license cancellation certificate.
HLB Hamt provides liquidation services for all entities including limited liability companies, free zone companies and offshore companies. These services are available across Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, and Sharjah. For liquidation to happen there are some mandatory documents required. We also assist in the preparation of these documents which include Board resolution, power of attorney, audit report, liquidator’s statement etc.
Our services include:
• Appointment as liquidator
• Administer the liquidation process
• Supervise asset disposals
• Negotiations and settlement with creditors
• Liaise with liquidation accountants
• Process third party liquidation costs
• Co-ordinating with various legal authorities and government departments
• File de-registrations and other formal notifications
• Administer the complete documentation
• Preparation of statement of affairs
• Supervise the on-going and liquidation specific accounting requirements
Often liquidation proceedings are lengthy, time consuming and expensive. HLB Hamt also assists you if you want to exit from the formalities immediately. An alternative solution to exit from the liquidation formalities is to transfer the shares from liquidating company to a third party. We can arrange a third party who will purchase the liquidating Company and deal with all matters related. This will help the removal of the shares from the company for the shareholders and directors.