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The services are Liquidation Audit Services in the UAE:
To close down a company in Dubai or any other part of the United Arab Emirates, you have to seek the services of a liquidation company. According to the UAE Company Law, authorized liquidators or liquidation companies can only be employed to handle the de-registration of a firm.
The shareholders of the company may wind up the company, or the company is wound up when it is no longer in a status to service its debt to the creditors. In this regard, a company winding up in Dubai has two forms.
1.Voluntary Liquidation:
There may be several reasons why it comes to the time to liquidate a company on its own. The same is due to the death of the owner/main shareholder and absence of a succession plan, sale of the company by shareholders because of the company achieving its business objective, the merger of the company with other entities, losses, which render the company unable to continue conducting business activities, or any other factor.
2.Compulsory Liquidation:
Sometimes the authorities close a business forcefully due to violation of the UAE laws or insolvency, i.e., no more money is available to continue operations, and cannot meet its existing debt obligations to its creditors. In the second case, it is worth pointing out that it is only after the creditors have made a complaint that the authorities are alert. Through the help of an authorized liquidation firm, the property is sold and the creditors are paid as far as possible.
NAK Auditing L.L.C. is a recommended liquidation audit firm in the UAE, which assists companies in operating within the lawful and transparent closing down of companies, with special focus on credibility, distribution of assets and confirmation to the stakeholders.
1.Initial Consultation and Planning: The clients are given a customized treatment starting with a thorough consultation to determine their unique circumstances and liquidation needs.
2.Complete Financial Investigation: The business examines all the financial records, including the balance sheets and income statements, and pays close attention to cash flows to ensure that all the transactions are documented and all the responsibilities are taken into account upon the dissolution of the business.
3.Compliance Check: NAK Auditing thoroughly monitors compliance with UAE laws and regulations, and the scope of audit also involves the amount of paperwork that has been done, taxes payable, and contracts as a line of defense against possible imposition of a fine or non-performance.
4.Asset Valuation & Distribution: NAK Auditing undertakes professional valuation of the assets and oversees and makes the remaining assets fairly and equitably distributed to the creditors and shareholders, thereby ensuring the interests of all the stakeholders and preserving the legal structure.
5.Final Report Preparation: NAK Auditing once the audit is completed, prepares the final liquidator report of NAK Auditing, which NAK Auditing regards as the most significant report to close the audit, as well as make sure that all the findings comply and mark it to be presented further to the apex authorities.
Liquidation audits are required to be performed by the UAE firms in a state of liquidation due to the reasons of legality, transparency, and the interests of all parties.
→Meeting Legal and Regulatory Primary Requirements:
The fulfilling atmosphere of the liquidation audits is that the business will be terminated (dissolved) and the closure of business must be done as per the United Arab Emirates (UAE) Commercial Companies Law and the Civil Transactions Law, with sales of assets, payment of debts and portions.
Taxes are, without doubt, certified by auditors who are in a position to determine that the liquidation of the company, voluntary or forced, has no outstanding debts or fines to the company in the form of VAT and other taxes in the boardroom, in case they exist.
→The Stakeholders: Protection:
Liquidation audits are clear evidence to the creditors, as well as the shareholders, that all the unsettled debts have been determined and paid fairly and reasonably, so that the payment and the assets to be distributed are just and reasonable.
The process flourishes in offering trust and confidence to all the stakeholders that include the owners of the company, the creditors and all the arms and branches of the government, that the business has conducted its operations in a very professional and responsible way.
→Risk Management and Transparency:
By auditing all the accounts and transactions being closed, liquidation audits reduce the prospect of malpractice and fraud that is attributed to the transactions in the accounts and the finances of the business.
The stakeholders enjoy the privilege of knowing all the reports related to audits that ensure transparency of the process of liquidation process and the establishment of trust both within and outside the organization.
→Easy and Reputable Closing:
An open and complete audit of its liquidation at the company increases the integrity of the company in front of business partners, the government and society and preserves its image of exiting the market. Professional audits ensure that companies do not encounter such legal problems in the future that may be caused by unaddressed accounting problems or indirect decisions.
1.Board Resolution or Shareholder:
The process begins with a written resolution by shareholders or the board to undergo liquidation.
Minutes are recorded in writing and, in case it is necessary, signed by a notary or government body.
2.Signing of a Licensed Liquidator:
The appointment of a registered liquidator (specialist consultant or audit firm) is to manage and oversee the whole liquidation procedure, such as financial investigations and valuing of assets.
3.First Acceptance and Publicity:
The initial approval is submitted to the respective licensing authority with the necessary documents (e.g., trade license, resolution, and liquidator letter).
During the period of 45 days, a publicity of liquidation is placed in the local Arabic and English newspapers, after which creditors have been allowed to present claims.
4.Valuation of Assets and Evaluation of Liabilities:
The liquidator examines the assets, inventories, debts and the overall financial records.
Secure No Objection Certificates (NOCs) from utilities and other government authorities and other interested authorities.
5.Debt Settlement and Asset Dispersal:
All monies and liabilities outstanding, such as employee contributions, supplier agreements and government liabilities, are resolved but under the authority of the liquidator.
The rest of the assets are given to the shareholders as per their holding, after settling the creditors.
6.Preparation and Submission of the Final Audit Report:
The liquidator provides a final audit report completely, confirming all settlements, presenting assets, liabilities and transactions.
The document, along with a Statement of Affairs, the certificates of clearance, and a showing of publication in the newspaper, is presented to the licensing authority.
7.Discontinuation of license and deregistration:
The trade license of the company is cancelled in case of the approval of all the documents, and it is duly deregistered at the Commercial Registry.
The company cannot be liquidated in the UAE without some documents that you will be required to prepare. The following is a list of just a few items to guide you:
1.Copy of business license: We shall begin by obtaining a copy of your current business license. This is in order to ascertain that your business has been operating within the law.
2.Resolution to Changeover by the Shareholders: You will be obligated to obtain a Changeover Resolution in writing by the shareholders that signifies that all members of the shareholders agree with their decision to put an end to the business. This makes sure that there is a mutual understanding by all involved.
3.Revised Memorandum of Association (MOA): You are supposed to provide the revised MOA. This must comprise any developments that have occurred since the inception of the company.
4.Power of Attorney (where appropriate): You will need a Power of Attorney document in case there are circumstances where a person who is not a shareholder is handling the liquidation. This will officially enable them to speak on behalf of the shareholders.
5.Shareholders’ Passports: It is imperative to make sure that you give photocopies of all shareholders’ passports. This is to identify them and also to ensure that they own their businesses.
6.IDs of shareholders: Other than the passports, copies of the Emirates IDs of all the shareholders should be provided. This can be used to ensure identification.
7.Deregistration Application Form: Lastly, remember not to ignore the deregistration application form, which is also to be filled out and submitted. It is a significant process in the official procedure of shutting down the company.
→Compliance Assurance
1.Regulatory Compliance: According to the legislation, the authorities keep the UAE Commercial Companies Law, the Civil Law, and free zone regulations in line with the bill and make sure that the books meet standards at every operating level of the liquidation procedure.
2.Checking and paperwork: All accounts and documents, e.g., tax returns, valuation of assets, contracts, financial statements, ledgers, etc., are strictly examined and verified as accurate and legal. Most of the time, these accounts need to be supported by the documents and capture the required endorsements, e.g., No Objection Certificate (NOC).
3.Legal and Tax Checks: It may result in the payment of fines during a business closing, the rationale being the outcome of a poor closing audit that lets the business tax returns and VAT returns go unattended, along with the Federal Tax Authority and certain other counters, so it is a good idea to close the audits before the close-up.
→Promoting Transparency
1.Communication to the Stakeholders: Auditors provide the auditors with the pertinent information on a timely basis and update all the interested parties (shareholders, creditors, and authorities) and report on the audit and the status of the assets distribution.
2.Proper Asset appraisal: The last report shows that an appropriate asset and liability appraisal will avoid a dispute and ensure equitable allocation.
Final Audit Report: Final audit report is a report that summarizes all the discoveries, dealings and distributions as a legal document and basis of regulatory approval and deregistration of a company.
→Reducing Risk and Credibility:
1.Fraud Prevention: The auditors who guard the interests of both the company and the stakeholders search all the asset disposals and the financial transactions, auditing them in order to find out poor controls and signs of fraud.
2.Independent Oversight: In addition to this, the independent audit firms ensure that the liquidation process is met, which means that there is a degree of trust and confidence in the regulatory process and the stakeholders due to the independence, objectivity, and certainty in the audits conducted.
Here are some common questions about Liquidation Audit
An audit of liquidation is compulsory review and audit of firm financials during the process of closing the business. It confirms that all assets and liabilities are duly recorded, it verifies their settlement with creditors and assurance of the adherence to the laws and authorities of the UAE prior to the possibility to dissolve the company.
Department of Economic Development (DED) or Relevant Economic Department: To the DED, the mainland companies should present official liquidation applications, resolutions, and necessary paperwork. The companies in the free zone inform the corresponding Free Zone Authority.
Liquidation audits may only be performed by the licensed audit firms pre-registered with the corresponding UAE authorities (the Department of Economy and the free zones). It is these firms that prepare and file the liquidation audit reports that are necessary.
Important papers usually consist of:
Liquidation audit is used to:
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