The Dubai International Financial Center is one of the two Financial Free Zones recognized with a self-legislation, nevertheless, it is no exception to business liquidation. Thus, the Dubai International Financial Center companies need to outsource expert liquidation services to seamlessly carry out liquidation procedures.
FAR Consulting Middle East is an approved and reputable liquidator in the Dubai International Financial Center. In June 2019, the DIFC introduced the Insolvency Law to regulate liquidation procedures and to mitigate the financial risk of bankruptcy for companies.
The Dubai International Financial Center statute confers the following:
● Rehabilitation Plan Notification Ought to Be Enforced
A 120-day moratorium period has to be enforced for the liquidating business to avert any credit or provisions as per contracts from enforcing their rights.
● Appointing an Administrator in Case of Mismanagement or Fraud
Winding up a company is influenced by several reasons, which might include, fraud elements in a business, mismanagement of business conduct, and undertaking of illegal trade, among other reasons. The DIFC appoints an administrator who is an independent insolvency practitioner/executor. The specified administrator looks into the company’s functions, even throughout the moratorium period
The four methods include:
The company, its board members, and the shareholders can decide on the company’s cessation of operation or winding up. In this case, a designated Power of Attorney ought to be appointed to sign on behalf of the company’s shareholders. Moreover, all the shareholders should freely consent and sign the shareholder resolution.
After this, the formal procedure of initiating voluntary winding up can be conducted. Further, the business has to appoint an approved DIFC liquidator, the shareholders’ resolution must form an agreement with a DIFC liquidator, and obtain an acceptance letter. Still more, the entity ought to submit a statutory director’s declaration along with the shareholder resolution.
There is a thin line between De-registering and Voluntarily Winding up a company. De-registering involves the process of removing the company from the list of DIFC entities. Once De-registered, the company can still operate outside the DIFC-Free Zone. A voluntary winding up of business may be due to uncertain reasons; however, de-registration of a company can mean that the company wants to exclude itself from the DIFC Registrar of Companies. For this reason, a company only seeking to de-register is not necessarily required to submit a liquidator’s report. The types of Companies that can deregister are:
A court order initiates a compulsory winding-up process. The legal order is issued due to reasons such as non-compliance by the business, illegal activities, laundering, or bankruptcy.
Businesses may transfer to a different jurisdiction due to different standards and regulations. In this case, companies can apply for a Transfer of Incorporation from the DIFC body. In this vein, DIFC entities ought to consider the below points when applying for the transfer on the DIFC portal:
To combat the complexities of solely undertaking the liquidation procedure, DIFC companies need to outsource trusted and efficient liquidation services. FAR Consulting Middle East is a registered DIFC liquidator with a proven record of successfully assisting companies in executing liquidation procedures. We assist companies in enforcing liquidation compliance and strategically planning winding-up procedures.
Our expert team renders top-notch services and customer-based solutions that mitigate companies’ specified needs. Thus, call us today and we shall be happy to assist you!
Auditing of a company within the Dubai International Financial Centre (DIFC) is an organized procedure that has to be systematically prepared. Effective records will ensure that the regulations of DIFC are adhered to and will also assist in smooth audit or liquidation procedure.
The documents that are necessary in the DIFC auditing process were:
The accuracy and completeness of these documents minimizes chances of delays, penalties, and disputes in the process of carrying out the audit.
Both follow the DIFC Companies Law, but both end with the deregistration of the company formally.
With the help of a professional team of company liquidation in Dubai, these steps can be initiated successfully and with fewer chances of delay.
Preparing everything beforehand helps to move the process faster and avoid unnecessary costs.