For most businesses, dealing with liquidation is a new experience that raises a number of questions. Basically, company liquidation arises when a company cannot meet its financial obligations and cannot pay off its debts. The liquidation of the company can take place either as a voluntary liquidation or as per court order for a forced liquidation, where a liquidator, is hired to oversee the process.
Our audit staff has extensive experience in dealing with bankruptcies, insolvency, and corporate restructuring. Our goal is to achieve maximum value for every client. Our company liquidation services are all included - we will guide you through each phase of the process. Whether your company wants to sell excess real estate, machinery, or equipment, cancel its licenses, or has to liquidate it completely, we can help you.
Steps to liquidate a Company in UAE
In a broad sense, a company is located on the mainland or a free zone requires the below steps to get completely liquidated.
Step 1: Signed Board or shareholder resolution
Step 2: Official notification to the license issuing authority
Step 3: Obtaining NOCs and clearance certificates from Govt. authorities.
Step 4: Cancelling employees and sponsorship
Step 5: Making an official announcement in media
Step 6: Closure of corporate Bank accounts
Step 7: Official termination letter and confirmation by licensing authority
Frequently asked questions
What is an audit?Auditing is an official, impartial review of an organization's accounting books by an independent body to determine whether they are in compliance with the organization's policies and procedures, regulations, and laws.
What documents are needed by auditors to conduct the audit procedures?The auditor can request the following documents to carry out the audit. Please note that this list is not exhaustive and that additional documents may be requested depending on the type of company activity, company size, scope of business activity, etc. Purchase documents and related information Sales documents and related information Expenses documents and related information Ownership documents of an audited entity Bank statements Verification sample documents Operational information, if applicable Accounting software reports Independent third party confirmations
The audit processInitial meeting with client and audit engagement sign-off. Developing audit program and planning schedule. Visiting client, obtaining audit info. Performing substantive and analytical tests. Sending observations, queries and major issues to client and obtaining client feedback. Incorporating client feedback and submitting audited financials for client approval. Issuing final audit report.
What is the final deliverable at the completion of an audit and what it contains?Once the audit is complete, an auditor will publish a series of financial statements that include: Statement of comprehensive income (commonly known as an income statement) Statement of financial position (commonly known as the balance sheet) Cash flow statement Statement of changes in equity Notes to the above financial statements And Independent Auditor’s Report
What are the uses of an audit report?An audit report can have many purposes and uses. Some are stated below: Required as part of the documentation for immigration purposes UAE Federal Tax Authority (FTA) may request a business to submit audited financial statements as part of their procedure in some cases. Audited accounts are considered more reliable and can be used to settle disputes between Shareholders of a business to resolve disputes, being a third-party professional opinion about accounts. An audit report is accompanied by a “management weakness letter (MRL)” that states major issues and observations Auditors have observed during the course of the audit. This report can help the management to identify pitfalls and opportunities for business process improvement. It can fulfill the statutory requirements to submit audited financial statements i.e. submission of annual audited accounts to Free Zone Authorities in UAE. Commercial banks can ask for historical annual audited accounts as a part of their procedure during an assessment of the financial position of the loan applicant company.
Is every auditor eligible to conduct a particular Free Zone audit?No. An auditing company must meet certain requirements and be registered and listed with each individual free zone authority in order to be able to carry out an audit of companies in that particular free zone. The report of an unlisted auditor will not be accepted by the Free Zone Authority. We at Approved Auditors meet the requirements and are registered and listed to provide auditing services in Dubai, UAE.
Do all companies in the UAE mainland and Free Zone need to be audited by external auditors?No. While the statutory audit is not required by law for all companies in the UAE, there are certain jurisdictions and areas where the statutory audit is required by local regulations.