1/12/2024 0 Comments Liquidation![]() Declaration of bankruptcy or insolvency of one of the partners.Special Reasons for Liquidation and Expiration of a Company The merger of the company into another results in the dissolution of each of them and the formation of a new company.The decision of the majority of capital owners to dissolve and liquidate the company.The shares of all partners lie with one person, transforming the company into a sole proprietorship.If the company suffers losses of half of its nominal capital so that it cannot continue trading. ![]() Completion of the company’s objectives.The end of the company’s term as specified in the company’s constitutional documents.General Reasons for Liquidation and Expiration of a Company Article 306 provides that unless the Memorandum of Association or Articles of Association of the company provides for the method of liquidation or the partners agree otherwise upon the dissolution of the company, the provisions of the Companies Law shall apply to the liquidation of the company. Liquidation of the Company in the UAE Companies LawĬhapter 2 of the Companies Law addresses the liquidation of Companies and the division of their assets. After his appointment, the liquidator must take the necessary steps to wind up the company’s business taking into account his responsibilities, duties and obligations to all the relevant parties. A liquidator may be appointed by the partners or the general assembly, or the court. 2 of 2015 on Commercial Companies (the “Companies Law”) has specific rules for the appointment of the liquidator and the powers assigned to him. The liquidator is considered a legal representative for the company. This can be an extremely time-consuming and arduous exercise especially in the event that the company to be liquidated and dissolved is large, has multiple branches and trading activities. There are two forms of liquidation, namely voluntary liquidation which takes place with the consent of the owners of the company or its shareholders, and involuntary liquidation which is a situation where the court rules to appoint a liquidator to dissolve and liquidate the company. Businesses and companies falter for many reasons and, accordingly, when the losses suffered reach a certain threshold, that the business or company cannot continue trading.
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