Company liquidation

Liquidation is the process in which the company winds up all its operations and sells its assets to repay its liability if any. When a company is not in a position to continue its business, the company liquidates. In UAE, the liquidation of the company depends upon the type of company and different rules and regulations for the Mainland, Free zone, and Offshore companies.

The liquidation of the Company in Ajman can execute by following the provisions of Commercial Company law. Also, the liquidation of the free zone and offshore companies is very easy as compared to the liquidation of the Mainland company as the Mainland company has to appoint a liquidator who will do the liquidation process.

Reasons for liquidation

To Liquidate a company certain procedures and conditions need to be followed in accordance with the regulations of the suitable authority. The liquidation of the company is divided into two categories i.e. voluntary or compulsory. There are many different reasons for company liquidation some of them mention below:

  • Expiry of license
  • Expiry of working duration is stated in the Article of association and article of Incorporation
  • Completion of goal/objective
  • Merger of Company
  • Huge loss/more liability

Before liquidation, the company has to attain the consent of all the shareholders so that the company’s existence is brought to end. Along with this, the UAE company liquidation requires a liquidator company that executes the liquidation process and issues the certificate of liquidation.

Liquidation process

Many conditions have to be fulfilled before liquidating the company which include:

  • Visa cancellation of all employees
  • Issuance of the Board of Director’s liquidation decision
  • Appointment decision letter of Liquidator by the Board of Directors
  • Issuance of Liquidation certificate by the liquidator
  • Announcement of the company’s liquidation in two local newspapers
  • Confirmation of partners and liquidator that there are no claims and objections by the third party
  • Submission of the final audit report to the registration authority
  • Visa Cancellation of partners and investors

The company must have to get a clearance letter from immigration, the Ministry of labor, and the Utility providers. In Ajman, there are many liquidator companies that provide Company liquidation services but before hiring, the business owner must make sure that the company is genuine and can execute the liquidation process effectively and efficiently.


Every business goes through bad days and there are times when the company is near its end and are facing huge losses. Every business owner must plan strategies to cope with the bad conditions of the market. Also, the businessman should retain some profits to manage the business in bad times and should never give up.

Liquidation means ending all the hard work, bonds, customers, investors, and everything. So, before taking the decision of company liquidation in Ajman, the owner, and partners should give it a second thought. Always try to pick up the company once again with new strategies and plans.

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