Liquidation of the company in the UAE

The liquidation of a company is a complex and important legal process that requires the exact fulfillment of all legal requirements. In this article, we will consider the main aspects of the company liquidation procedure in the United Arab Emirates (UAE), paying attention to legal norms, stages of the process and features compared to other jurisdictions.

Legal framework for liquidation of companies in the UAE

In the UAE, the liquidation of companies is regulated by a set of legislative acts that establish rules and procedures for the termination of the activities of enterprises.

The main legal acts that apply to the liquidation of companies in the UAE are:

Trade Law

• This law establishes general rules for the establishment, registration and operation of companies in the UAE.
• It also contains provisions for closing down the business, including liquidation.

Companies Act

• This law regulates in detail the structure and governance of companies in the UAE.
• It defines liquidation procedures, obligations of liquidators and owners of companies during this process.

Department of Economic Development (DED) requirements

• DED plays a key role in business registration and supervision of its activities in the UAE.
• The department also establishes requirements for the liquidation of companies and provides the necessary documents and forms for this process.

The legal framework for the liquidation of companies in the United Arab Emirates is clearly defined and includes a number of key pieces of legislation.

Understanding and complying with these acts during the liquidation process is critical to ensuring its successful completion.

Stages of company liquidation in the UAE

Making a decision on liquidation

• The decision to liquidate is usually made by the company’s owners or shareholders at a general meeting.
• If the company has debts, it is necessary to resolve their settlement before starting the liquidation procedure.

Appointment of liquidator

• A liquidator is usually appointed by the company’s owners or by court order if necessary.
• The liquidator is responsible for managing the liquidation process and fulfilling all legal requirements.

Legal formalities and notices

Registration of liquidation

• The liquidation of the company must be registered with the Department of Economic Development of the UAE.
• After registration, it is necessary to publish an announcement about liquidation in official publications.

Notification of creditors

• All creditors must be notified of the start of the liquidation procedure, indicating the deadlines for submitting claims.

Settlement of financial issues and property status

Completion of commercial transactions

• The liquidator must complete all active operations of the company and ensure the settlement of all outstanding liabilities.

Distribution of assets

• After all debts are paid, the remaining assets are distributed among the shareholders or other participants of the company according to their shares in the capital.

Alienation of corporate rights

Transfer of ownership

• The process of transferring corporate rights can include the sale of shares, the exchange of shares, or the transfer of inheritance.
• Corporate rights can be exchanged for shares or shares of another company in a merger or acquisition
• All relevant legal acts must be registered in accordance with UAE requirements.

Also, we can offer to find buyers and implement the alienation of corporate rights of the desired company.

Alienation of the company’s corporate rights involves the transfer of ownership rights to a share or shares to another person or legal entity.

In each country, company liquidation procedures have their own characteristics, depending on local legislation and practice. The UAE is no exception, and careful compliance with all legal requirements is a key aspect of successfully completing the liquidation process.

The above steps and tips will help companies and their owners understand and effectively manage the liquidation process in the UAE.

It is important to take these differences into account when planning the liquidation of a company in an international context, and the specialists of the Prikhodko and Partners Law Firm will definitely help you with this.