Company Liquidation – What It Means And What Happens

The way you handle اقامة مستثمر في دبي liquidation depends on the circumstances leading to it. Basically, there are two ways that a company can end up in liquidation and they are voluntary which occurs in voluntary liquidation and involuntary occurring as a result of compulsory liquidation. Your business is rendered insolvent and assets are therefore sold and the proceeds from the sale used to repay creditors to clear any debt you might have.

The steps that are followed in the liquidation process depend on the liquidation type, but the process usually involves selling off company holdings and property and then this is followed by complete dissolution and even closure of your company. It simply means that whether liquidation is compulsory or voluntary it results in the same thing; creditors are paid as possible and the company simply ceases to be in existence.

For this type of liquidation, a winding up petition is lodged by a party with the court so that the insolvent company is wound up to recover any outstanding debt. Usually the petitioner is a creditor, but it can also be an official receiver or a shareholder or even a secretary of state in some cases. It is also very possible for company directors to legally lodge, this petition, but it is then considered a voluntary type of liquidation when this happens. There are several situations that can lead to a company being forced to go into compulsory liquidation. Some of the most common situations that lead to the liquidation are:

When the liquidation process is underway, the assets of the insolvent company begin to be sold and all litigation that involve the company cease. This simply means that any legal action that could be taken by the creditors remain void when liquidation starts.

In this type of company liquidation, the company directors plan the process and they can seek and use guidance and assistance of an insolvency practitioner. It is a much easier type of liquidation, especially when there is reason or evidence that liquidation is the only option to get the appropriate outcome for the creditors. It is considered less stressful because the main company players are usually in agreement of the liquidation before the creditors come knocking and pushing. It is however of importance to note that in case the insolvency practitioner realizes the directors are liquidating the company even though there are better solutions, he can and is allowed to refuse the appointment to start the process. Instead, the practitioner can offer better and more appropriate solutions to the company without going into the liquidation. As a company, it is always better to hire professional liquidation services if you must go into liquidation.

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