Understanding different processes of company liquidation, that could benefit the company is important. Being able to provide details on terms and procedural on liquidation will help in the easy closing of a business and provide the best options available for liquidation. It will also highlight the significance of liquidation and help those who are entering into liquidation.
The causes of liquidating a company are different depending on the circumstances.
choosing a liquidation process will ensure a clean end of business without any legal troubles.
In this case, the business in fact is able to make payments on time, but it is the choice of partners to windup. This process is also deemed to be a huge benefit to the directors as it provides the chance to dissolve a company in the correct way and not leave any unattended issues.
This occurs when the director of a company realizes that the business is not able to pay off the debts and can begin the process of liquidation If the majority of shareholders agree to liquidate then the process can start.
This situation the company is completely unable to make payments to its debts and the director applies to the court to request that the liquidation process is implemented.
Liquidation is inevitable for a company when it finds itself insolvent. When a company is in an undesirable situation of liquidation, the business owner needs to be proactive in placing the company into liquidation as soon as possible. This action can help to prevent insolvent trading and its associated hardships.
There are risks involved when a company fails to place a company into liquidation when it is appropriate to do so. A business owner may become personally liable for debts incurred by the company if the company is insolvent but not placed into liquidation.
When an insolvent company is wound up as decided by its members or creditors or, is wound up by a court, a liquidator is appointed.
You should know: Steps for Company Liquidation in the UAE
There is a hierarchy that determines the order in which a company’s assets must be distributed in a liquidation process. This may be strictly enforced by the Courts. Any secured creditors have the first right to the claim assets and are usually paid out before there is a distribution. After this is paid out, any remaining debts can be paid as per the priority claimed
There is no specific time period in which liquidation of business will occur. Some liquidation cases can be complex and may result in the liquidation process stretching across for the number of years.
Company liquidation in UAE requires an experienced approach with strict adherence to all the procedures. Only a complete understanding of the existing legislation can help you understand Deregistration of Company. HHS Dubai Lawyers has been providing highly specialized company Liquidation Services in Dubai UAE. With many successful closures under our belt, we have the expertise to guarantee hassle-free liquidation procedures to our clients.
Our specialized services include determining a solution and advise you on objectives such as costs, time and help in finding a quick-fix solution. During the process, we liaison between you and him governmental authorities to find an easy and mutually acceptable exit strategy.