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Company Liquidation

Liquidation is a key element of corporate strategic planning.

Liquidation or deregistration, the arduous process by which a company is brought to an end, is not a situation that any organization wishes to find itself in.

But preparing for the worst-case scenario, especially in turbulent times like these, should be a critical part of a company's strategic planning.

While liquidation might not have been a familiar term in the UAE just a few years ago thanks to the sky-rocketing economy, it is now an everyday phenomenon ever since the global crisis hit home. Most companies are shocked and surprised by the lengthy procedures involved in closing up a company in the UAE. But all it takes is some advance planning about the liquidation process during the Business Plan stages itself, and most of the ordeal can be avoided.

While the UAE's business environment does encourage entrepreneurship and is significantly devoid of red-tapes compared to other world business markets, there are certain aspects of the law and procedure that business houses need to take note at an early stage of their business plan. For example, even after announcing liquidation by placing a notice in the newspapers for the same, the Directors need to have a clean chit from the concerned Government Agencies like Labour, Immigration and the Municipality stating that they have no pending renewals of licenses. Companies should also be aware of the fact that their licenses should be active while applying for closure. Awareness of small but crucial aspects of the law such as these can save a lot of time, money and trouble during liquidation.

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