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Company Liquidation in dubai

Company liquidation in Dubai is the winding-up process of a firm as set in the commercial laws of UAE. It is the process of a formal closure of a company's business, the settling of its liabilities, and the distribution to the owners. It can be either a compulsory process that is initiated by the firm's creditors or a voluntary process initiated by the company's owners for several strategic reasons. This article will briefly describe the process in Dubai, whether it is under voluntary or compulsory liquidation.

Types of Liquidation in Dubai
  1. Voluntary Liquidation

    Shareholders of the company decide to voluntarily wind up the company's affairs. It is most likely made where the company is solvent and can pay its debts but chooses to cease operations for strategic reasons. There are two kinds of this type of liquidation:

    • Member's Voluntary Liquidation

      This is initiated through the shareholders when the company is solvent and can pay its debts within 12 months beginning from the day the company was put under liquidation.

    • Creditors' Voluntary Liquidation

      The company's debts cannot be paid or is insolvent. Creditors participate in the liquidation process to guarantee the equitable distribution of any such proceeds from the company's assets.

  2. Compulsory Liquidation

    A court-driven process is initiated through the filing of a case in court by a creditor, shareholder, or another related stakeholder; chances are it usually is because the company is unable to pay its debts.

Steps for Company Liquidation in Dubai
  1. Board Resolution

    It starts with a board resolution where the owners or shareholders of the company are to pass a resolution on company liquidation.

  2. Appointment of a Liquidator

    The company management is to appoint a licensed liquidator to be in charge of the liquidation process. The liquidator guarantees that it settles any outstanding debts, sells away any assets, and distributes such proceeds to its creditors.

  3. Notification to the Authorities

    Liquidation is a legal process, and the DED and other authorities in Dubai, including free zones, have to be notified.

  4. Public Announcement

    Liquidation has to be announced publicly in two local newspapers. Creditors will have to declare their claims within a given time frame.

  5. Settlement of Claims and Debts

    All the claims and debts have to be settled by the liquidator in order of priority and terms set out in the UAE laws.

  6. Final Accounts Preparation

    The liquidator prepares the final accounts after settling the debts. The final account will show the liquidation of the assets and the settling of the debts.

  7. Deregistration

    The removal of the company has to be deleted from the Dubai Commercial Register. Licenses for business and permits will be canceled.

Legal and Regulatory Framework

The whole process is managed and regulated as per the UAE Commercial Companies to ensure that all the legal and straightforward steps are taken. It is also meant to protect the interest of the shareholders and the creditors. In a case that the company was going to be liquidated in a free zone, there are also regulations on liquidation for that free zone. Those free zones have to be considered.


Liquidation of the company within Dubai has to be well planned out. It would be proper to involve the service of legal professionals, and competent liquidators will help compute and wind up the affairs of the company with efficiency. Proper and transparent communication amongst the parties involved will result in an easier process.

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