If your company is no longer in a situation to run in the market, it is a better option to go for liquidation.in this way, all the assets will get divided and the money after liquidation will be used for paying all the debts and bills of the company. The remaining amount will be divided between all the partners.
Get an idea about liquidation of company and its process!
Having an idea regarding the liquidation procedure in UAE is an important task for the companies thinking about going for liquidation. This is because in this way you will be able to take the necessary steps of liquidation while doing all the paperwork and different processes properly.
Here is where we will get an idea how long does it usually takes in order to liquidate a company and carrying out all the related procedures.
Types of liquidation
There are basically two main types of liquidation
- Voluntary liquidation
- Compulsory liquidation
In case of voluntary liquidation, the company and all the partners of the company will go for liquidation on their own without any external pressure.
In case of compulsory liquidation, the court of the law will order the company to go for liquidation so that the assets can be used for paying the debts of creditors.
No matter what the reason is behind the liquidation, you must keep it in mind that you carry out the process of liquidation in a proper legal manner.
Duration of the liquidation process
The appointment of the liquidate will usually take almost one to two weeks.
If almost all the shareholders agree on a short notice, the process of liquidation can be done in 7 days minimum. It can take more in some cases too.
The liquidation is not the last process that you have to carry out. After the liquidation, you have to sell the assets as well. For this, proper investigations are really important so that the assets may only be used for paying off the debts of the creditors. The selling of the assets may take from 1 to 2 years and even longer than that in some cases.
Particularly for compulsory liquidation, the duration can be almost 3 months starting from the initial threat to the end of the court’s proceedings.
Basic liquidation steps
- Appointment of the company liquidator
- Sale of the assets of the company
- Agreeing of the claim of the creditors
- Working out on the returns.
These are all the basic steps that are taken into account while carrying out the process of liquidation UAE. From start till the end, you have to be very careful about what is happening to your assets choose best professional liquidators in Dubai, UAE. This is because the assets should be used for paying the debts and the bills. Also, you should make sure that the claims of the creditors are right as if they are wrong, they will not be provided with any money.
Time is taken for liquidation
It may wholly take about 6 to 24 months for a company to get liquidated properly.
The choosing of a liquidator, which means that the controls of the administrators usually takes between one & two weeks.
If more than 90% of shareholders decide to short notice, liquidation can ensue within 7 days. This is the minimum legal notice for creditors.
It does not stop there in that the liquidators now have to sell the assets etc, do investigations and file the required paper work. This can take 1 to 2 years and possibly longer. The larger the liquidation typically the longer it takes.
For necessary liquidation, the time between the opening threat and the end of court proceedings is generally three months.
But, in both situations, this is the time it takes to approve the liquidation of a company. After approval, the selection of a liquidator, the sale of business assets, and approving creditors’ claims and working out what return goes to them can add anywhere from 3 months to a 1 year to liquidation proceedings.
To liquidate a company there is no legal time limit. From start to end, it usually takes between 6 and 24 months to fully liquidate a company. Of course, it does depend on your company’s situation and the form of liquidation you are undertaking.
