Offshore Company Liquidation: Understanding the Process

Offshore liquidation which is similar in nature to onshore liquidation curates several complications because of several jurisdictions, regulatory frameworks and international implications. Liquidation services in Dubai starts by assessing the process as it is important for shareholders and directors who want to dissolve an offshore entity.

Initiating the Liquidation

The first step is the decision to dissolve the company. The step is ultimately taken by the shareholders which is solidified through a special resolution. The reason for liquidation can be from the company’s purpose being fulfilled, restructuring or financial problems. The certain requirements that are needed for creating liquidation depends on the offshore jurisdiction. Several jurisdictions need a formal board resolution before the shareholder resolution whereas others would require filing procedures with the local registrar.

Appointing a Liquidator

The company liquidation process in Dubai has another important step, which is the appointment of the liquidator. The firm is viable for managing the organization’s assets, settling its liabilities and distributing all of its remaining assets to shareholders.

It is expected that the liquidator should be a licensed professional, either an accountant or a lawyer with an expertise in insolvency. The liquidator’s powers and responsibilities are majorly defined by the jurisdiction’s company law. Their duties include asset realization which is converting the company’s assets into cash through sales or other ways. 

Liquidation services in Dubai can help in assessing and settling all debts and obligations and even those owed to creditors, employees and tax authorities. Maintaining good records of all transactions and proceedings is also vital. It is essential to remember to routinely report to the necessary authorities like the company registrar. Distribute all the remaining assets to shareholders according to their respective rights.

The Liquidation Process

The company liquidation process in Dubai itself has several steps. Firstly the liquidator will notify the creditors of the company’s dissolution and ask them to submit their claims. This is majorly done through public notices and direct communication. 

The next step is to assess the organisation’s assets and liabilities and curate a detailed inventory. The assets will be realised and the proceeds will be utilised to settle the liabilities.

This is often done through public notices and direct communication. Next, the liquidator will assess the company’s assets and liabilities, creating a detailed inventory. The assets will then be realized, and the proceeds used to settle the liabilities.  

In the case that the company’s assets are insufficient to cover its liabilities, it can enter into insolvent liquidation. This revolves around a complicated process of prioritizing creditor claims. Even if there are surplus assets that are remaining after all the liabilities are settled, the liquidator can distribute them to the shareholders in an equal manner.