Usually, people use both the terms interchangeably but there is a fine line difference between the two. Dissolving a company means removing or “striking off” a company from the Trade Registry. The process takes place voluntarily in situations where the sole goal of setting up a company is achieved or we can say that the company is already in surplus and no longer wishes to continue. A director of the company simply can apply to the Registrar for the dissolution. On the other hand, liquidation refers to the extraction of assets to pay off any outstanding liabilities before that company is dissolved. It can be voluntary and forced. The process is managed by a liquidator and requires the input of the company’s creditors. The liquidation process varies depending on the three criteria
- The type of ownership
- The type of liquidation
- The jurisdiction of registration, whether mainland Emirates or free trade zone.