Liquidation Services

Shutting down your business is the last thing you would want to do, but you are not alone.

Liquidation, really?

A mere thought of liquidation may keep you up all night. After all, your business is your dream. Maybe a wish come true that you made upon a shooting star when you were just 9. You have put into it tons of time, money and endeavour. You pulled out all the stops and endured countless sleepless nights throughout its inception. It’s perfectly natural to feel a personal and emotional attachment to your business. Just read what Mickey Rooney said – “You always pass failure on your way to success.” and move on.
We totally understand that the fortune and the prestige of your business both are inextricably tied to your own. But preventing the liquidation of an unsuccessful business will leave you in tears! You have to take it on the chin and come back fighting. Any business person worth their salt is able to diagnose their situation accurately. If you think that it’s time to shut down the company and approach liquidation support in Dubai. Do it gracefully under the guidance of a professional Liquidation Service Advisor who checks all the boxes. And if you are already in search of that perfect corporate Liquidator who is adept and determined to save you from going through the wringer caused by liquidation process, you are already on the right page.

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From liquidation here we mean closing a company and winding up its operations completely and permanently. The process involves selling off (liquidating) all the assets owned by the company at steep discounts and repaying the creditors and shareholders whom the owners owe. Once liquidated, a company can no longer operate or employ people. The business licence of the entity gets revoked and the name removed from the Trade Registry. The entity no more exists. It’s pretty obvious that no one in this world embarks on their entrepreneurial journey to end it on a bad note. But this is the best alternative a company can think of the moment it realises that it’s not in a position to run the business further. All in all, liquidation can be interpreted as an exit strategy for a company that is unable to pay its debts back in a timely manner (solvent companies may also be liquidated though) and is no longer profitable. Liquidation applies to both small enterprises and large, public companies.

Prime reasons for corporate liquidation

Much ink has been spilled about “how to scale up a business” or “how to become a successful entrepreneur”. Sadly, however, given the disheartening business survival statistics, most businesses never get a chance to hit it big. They begin small and remain small, and many eventually shut down, whether sooner or later. Inadequate capital or lack of funding, inefficient management team, erroneous infrastructure, erroneous business model or marketing initiatives, or maybe the stars are not aligned in your favour. Company closure can be the result of myriad different circumstances and ultimately becomes a voluntary or compulsory act.

What to do next?

You have already identified the need to close the doors of your organization and walk away from it. Whether a creditor is compelling your company to go into liquidation or it’s your own decision to wind up the company affairs, UAE Liquidators’ expert team at Adam Global can advise you on the best way forward. It is far better for the liquidation to be your own choice than to be forced to do it by another party though. Whether your establishment is solvent or insolvent, liquidation is a sensitive procedure and required to be addressed by a licensed insolvency practitioner that we are.
Our liquidation service experts in Dubai, UAE will not only help you bring your business to an end and distribute its assets to claimants smoothly but also enable you to exit from all formalities within 10 days or so. We extend company liquidation services in the UAE to all and sundry who are doing business in the UAE irrespective of the type or region. You may count on us for your:

Mainland company liquidation (viz. LLC, civil companies, establishments)
Freezone company liquidation
Offshore company liquidation

Let’s brave the liquidation together!

Liquidation is the hardest decision for any business owner but what needs to be done should be done. Winding up the business affairs and freeing yourself from all the liabilities you have on your shoulders is a daunting task. All you have to keep in mind is – handle the process delicately. And for that, you might feel the need for someone who can take the lead and accomplish the process in a smooth manner. We are that “someone” – your liquidation service provider. Our liquidation service experts make the entire process a sweat for you from beginning to end. With us at your service, you don’t need to worry about myriad things that are involved in the procedure from liquidating your assets to discharging the liabilities to all the paperwork.

We are highly skilled and experienced in all aspects of liquidation. We have been appointed as liquidators to a number of UAE companies over the years to assist them through all the facets of corporate insolvency and restructuring. We can guide you through each step of this potentially perplexing process so that you remain compliant while also doing right by your shareholders and creditors. With our assistance you can take decisive action for the good of your enterprise to emerge on the other side, ready to face the challenges of tomorrow. If you require more information on corporate liquidation, our experts at Adam Global can help. We offer an initial appointment free of charge to quickly establish your needs.

FAQ

How can Adam Global help?

The liquidation process is a complex and lengthy process. Doing it all by yourself can do more harm than good. Plus, it can cost you an arm and a leg because companies have to liaise with numerous external parties/authorities to have everything in place. Missing out on any step or document can result in unnecessary delay and complications. Adam Global offers liquidation services to help all UAE entities including LLCs, free zone companies and offshore establishments wind up their affairs in a quick and efficient manner. We guide you through the entire exit process from realising company assets to making distributions to creditors to winding up the affairs appropriately. The responsibilities of our liquidation specialists include but are not limited to:
1. Managing outstanding contracts
2. Dishing out the necessary information to creditors throughout the process
3. Having the name of the company struck off from the Trade Registry
4. Interviewing company directors as part of its investigations

Is there a difference between a company’s dissolution and liquidation?

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

1. The type of ownership
2. The type of liquidation
3. The jurisdiction of registration, whether mainland Emirates or free trade zone.

How to identify it’s time to liquidate my company?

When a company fail to repay money owed and to accomplish financial liabilities as and when they fall due, we draw the conclusion that it is already in the state of insolvency. Basically, when a company’s liabilities or debts start outweighing its assets, we say the company is on the verge of insolvency or bankruptcy. In a nutshell, a company’s failure to pay its debts timely is a dead giveaway that it is undergoing financial hardship and must cease to operate. If you’re in doubt about when to liquidate your company we can give you honest, confidential and practical advice.

Types of liquidation

There are three types of Liquidation:

1. Creditors’ Voluntary Liquidation (CVL): This type of liquidation occurs when a company is unable to pay its debts declares itself insolvent. The company’s assets are sold and any surplus is distributed to its members.
2. Members’ Voluntary Liquidation (MVL): Shareholders of a solvent company and the directors of an insolvent company may also voluntarily choose to end up the business operations and extract the assets to pay off any outstanding debts.
3. Compulsory Liquidation: In case the creditors find out that the company in which they have invested their hard-earned money is incapable of paying them back they can force it to go into liquidation as a way of recovering the debt owed by knocking on the doors of the courts. When the courts’ decision is in favour of the creditors the company has to forcefully shut down its trading and liquidate its assets in order to repay the debts it owes to the claimants.

Why is liquidation necessary?

For any company in the United Arab Emirates (UAE), that intends to shut down its business permanently, it is pertinent to liquidate the company as per the procedures provided by the laws governing the establishment and dissolution of the companies. There are majorly two culprits that make the liquidation of a company in the UAE mandatory:

1. The original objective behind the company establishment is accomplished and the entity is not required anymore;
2. The entity is considered to be bankrupt.

The liquidation process should be duly completed failing which could lead you to confront serious consequences later if you have plans to get involved in other businesses or set up another company. Even if you don’t owe anything to your creditors, you still should formally liquidate a company rather before your trade licence expires. As there are numerous procedures to be followed on liquidation and avoiding or procrastinating these may cause various penalties and could also lead to the ‘blacklisting’ of your company (along with its directors and shareholders) by government authorities in the UAE.

What do mean by the liquidation of a business or company? What are the different types of liquidation in the UAE?

In terms of finance and economics, liquidation means shutting down the business completely and paying back the creditors and shareholders using the remaining assets, based on the priority of their claims. Once the liquidation process is over, a bankrupt business no more exists. General partners are liable to liquidation. It’s an option for insolvent companies. Liquidation can also point out the process of selling off inventory, usually at over-the-odds discounts.

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Don’t wait until it’s too late. Contact Adam Global Auditing & Accounting today to learn more about how we can help your business comply in the UAE and maximize your savings.

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