Liquidation of the firm in Dubai is a process of shutting down a company and closing all of the procedures regarding the company. It is the event that occurs when a firm is at loss and has zero bank balance to pay its remaining debt.
According to priority claims, all company assets are distributed among the shareholders when the business is liquidating. In other words, the procedure of closing a company is called liquidation Services. Further, the company which is conducting the process is called a liquidator. Management of a company appoints a liquidator.
Company Liquidation Service in Dubai
Types of Company Liquidation
There are mainly two types of company liquidation in the UAE that are mentioned below
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Voluntary company liquidation
Suppose a company does not have enough money to conduct a business or meet with the expenditures, including bills and salaries, and the industry is constantly losing. In that case, firms will choose voluntary company liquidation because they don’t have enough funding to maintain in the competitive market of Dubai.
Mandatory company liquidation
A firm goes against the rules and regulations of the higher authorities or commits a crime? Does it include fraud or any serious offense? Concluding, the government will immediately close the company. It can be done under a court order.
Company Liquidation Audit
The higher authorities usually demand it before canceling the trade license, as the report will list the liabilities and strengths of an organization. All the financial data is required to get shared with the liquidator.
As the result of the liquidation process, all of an organization’s assets are converted to cash. These are distributed to the lenders or delivered to other company obligations. There are particular rules regarding the ways of asset distribution. The liquidation audit report uniquely helps confirm the data is exact and complete.
These require the final liquidation report, including Dubai Economic Department (DED) or Jebel Ali Free Zone Authority (JAFZA). Dubai Airport Free Zone Authority (DAFZA), Dubai Multi Commodities Centre (DMCC), and Dubai Silicon Oasis (DSO) in their respective areas whenever a company is closing its operations and canceling its license.
Furthermore, A E Y Auditing will make the business liquidation audit report and forward it to the associated authority. We are among the top leading auditing firms in Dubai. Hence, we will officially close the business and cancel the business license. For reliable and significant company liquidation services or audits, Contact us!
Company Liquidation Process
As auditors, we usually fulfill the below obligations:
- Firstly, prepare and submit confirmation of a liquidator to the associated authority.
- Secondly, publish advertisement and post of liquidation in any two local newspapers for 45 days.
- Thirdly, recognition of strengths.
- Cancel the contracts and identify the liabilities.
- Moreover, pay all the dues, including Etisalat and DEWA and other pending expenses.
- Further, pay all the wages and cancel the visas for all staff of the organization.
Lead the maintenance of records of accounting.
- Closing of associated bank accounts.
- File tax returns.
- Submit VAT De-registration to Federal Tax Authority.
- Establish and submit the created report of the liquidator to the associated authority.
- Manage the liquidation audit and prepare company liquidation audit report
- Submit all the original documents to the associated authorities.
- Above all, cancel the trade license of the company.
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Liquidation of the firm in Dubai is a process of shutting down a company…
Audit & Assurance
Internal audit is an important tool to assure management of the business…
There are various types of audits to choose from, and statutory Audit is one of them..
An internal audit is a detailed analysis of a firm performance according to the business plan…
FAQs Of Auditing
The general requirement of a business in the UAE is to maintain its records for not less than (5) years. The Commercial Company Law makes it mandatory for all companies in the mainland.
According to UAE Commercial Company Law, every company needs to have auditors to audit their book of accounts. Under Federal Law no. 2 of 2015, Article 27, a licensed auditor is mandatory. Ministry of Economy in the UAE must approve it.
Dubai Financial Services Authority registers well-known auditors. Therefore, it may appoint them to examine and report accounts of regulated DIFC entities.
However, if your company is usually free from an audit, you need an audit if your shareholders ask so. The shareholders must own at least 10% of the shares. Shares can be particularly on an individual or group level.
If you are an entrepreneur in Dubai, it is essential to get an audit. It’s significant because it assures that your company records are reliable and in order. Auditors in Dubai, while conducting audits, examine internal controls of a company. All of the sudden, they also inspect the existing system, coupled with the financial statement.
Yes! IFRS standards are mandatory by the UAE Commercial Company Law No 2 of 2015. Listing rules of NASDAQ Dubai, Dubai Financial Market PJSC, Abu Dhabi Securities Exchange, and especially Dubai Financial Services also demand it.
You can notably become an FCCA once you have a continuous membership of 5 years with ACCA. Further, you must meet CPD requirements of paying annual subscriptions every year.
Once you file the return, the IRS usually starts these audits within a year. Within particularly six months, they lead to completion. However, expect a delay if you do not deliver the complete information. In fact, we also expected the delay if the auditor finds issues and wants to expand in other years or areas.
The mandatory documents by management are as below:
- Firstly, accounting reports with trial balance, balance sheet, ledgers, income statement, and relevant schedules
- Secondly, copies of vouchers, invoices, receipts, and bills
- Thirdly, a list of bank accounts used for transactions and forgeries of bank statements
- Moreover, maintained reports of all the payroll functions of a business.
- Further, copies of legal documents of the business
- Verifications from clients, suppliers, associated entities, etc.
- Above all, evaluate related parties and transaction examinations with related parties.
- Firstly, it helps accomplish business objectives. It will fix company weakness in all ways.
- Secondly, auditors in Dubai significantly facilitate identifying loopholes and risks in the financial report of your company.
- Thirdly, it boosts credit rating and valuation. You open doors for foreign investors and get the best financial position by calling an audit service.
- Moreover, it reveals the overall picture of your business. You can further focus more on your company’s strengths, weaknesses, opportunities, and threats once you have a clear vision.
- Firstly, we follow our services’ highest professional ethics and quality level.
- Secondly, our company has a fast-growing team of qualified & dedicated professionals.
- Thirdly, you get new opinions to look at your business through Business Analysis, Creative Insight & Industry Benchmarking.
- We act as a Sounding board for crucial financial decisions and significantly provide dependable strategic leadership through our experience and knowledge.
- A E Y Auditing LLC is a UAE-registered auditing firm providing cost-effective value-added solutions to meet all your business needs.
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