Cost to liquidate a company


Liquidation of a company is the process of ending the company’s business and distributing its assets between the partners and other claimants. It also refers to the selling off inventories of a company, usually at steep discounts. One of the common reasons for the liquidation of a company is its insolvency.

The cost to liquidate a company depends on its size and the complexities involved in its liquidation. Liquidation of a company might incur more expenses, but it is the best method to end your business. 

KGRN provides a platform for companies to come in contact with a licensed insolvency practitioner, who will help remove the complexities involved in the process and procure a liquidation certificate at the earliest.

What does the liquidation of a company mean?

Liquidation of a company occurs when it turns insolvent. It becomes mandatory when the company doesn’t have any liquid funds to carry out its day to day transactions. By the liquidation of a company, it becomes free from all the formalities.

On deciding to liquidate your company, the first step is appointing a licensed liquidator to assist you in the same. You also have to notify the government regarding the dissolution to avoid legal issues and penalties.

Types of liquidation:

Liquidation of a company can be of two types:

  • Voluntary liquidation:

An insolvent company can call for voluntary liquidation upon getting a mutual agreement from all the shareholders and board of directors. Hence, you can voluntarily liquidate your company without the intervention of the court.

The voluntary liquidation process involves winding-up financial affairs, deconstructing the corporate structure, and distributing the assets between the partners of the company.

  • Involuntary liquidation:

Involuntary liquidation or compulsory liquidation takes place if the company receives a notice or a margin call from the investors, bank, or court. The petition for involuntary liquidation is made either by the creditor or the court. The most common ground for involuntary liquidation is the inability of a company to pay its debts.

Liquidation services KGRN provides:

  • First, appointing a liquidator
  • Secondly, administering the liquidation of a company
  • Thirdly, supervising the disposal of the assets of your company
  • Then, negotiating with the creditors
  • Furthermore, liaise with liquidation accountants
  • Processing third party cost to liquidate a company
  • Coordinating and communicating with various legal authorities and government departments
  • Filing de-registration applications and other formal documents
  • Administering the documents to liquidate a company
  • Preparing the  statement of affairs
  • Completing financial settlements to banks and partners
  • Supervising the liquidation specific accounting requirements
  • Lastly, speeding up the process of procuring a liquidation certificate

Procedure for liquidation of a company:

The steps involved in the voluntary liquidation of a company are:

Step:1  Appointment of a licensed liquidator
Step:2  Issuing a resolution that your company is under liquidation
Step:3  The liquidator must announce in two local newspapers regarding the company’s liquidation.
Step:4  The creditors and investors can submit their objections within the given period of 45 days.
Step:5  They can also apply to extend the period
Step:6  On completing the liquidation process, the liquidator must file a report regarding the same.
Step:7  After distributing the assets and closing the liquidation, the liquidator must apply for the deregistration of the company. On approval, the company will receive its liquidation certificate. 
Step:8  You will have to publish your liquidation certificate in at least two local newspapers.

Cost to liquidate a company:

The cost to liquidate a company in UAE depends on its size, type, and its location. It costs around AED 8000 to AED 12,000. 

The cost to liquidate a company in the UAE includes the cost of appointing a licensed liquidator. The following companies require the mandatory appointment of a licensed liquidator:

  • General partnership company
  • Limited liability company
  • Simple limited partnership company
  • Public joint-stock company
  • Private joint-stock company

KGRN’s licensed liquidators help you reduce the cost of liquidation to an extent. Our services are affordable and reasonably priced.

Documents required for liquidation of a company:

  • Firstly, the Board resolution for the liquation of a company
  • Secondly, the clearance certificate from authorities concerned
  • Thirdly, the Power of attorney
  • Furthermore, the audit report
  • Additionally, companies may need a liquidator’s statement
  • Companies also need the original business trading license
  • Bank account closure letter
  • Corporate account statement
  • Furthermore, the original share certificates of all shareholders
  • Lastly, their original establishment card

Advantages of liquidation of a company:

The following are the advantages of liquidation of a company in UAE:

  • Firstly, the company’s unsecured debts are written off.
  • Secondly, the creditors cannot follow a liquidated company’s director for payment.
  • Thirdly, all the legal activities of the company come to a halt.
  • Lastly, management of the liquidation process is passed on to a licensed liquidator, lifting the weight from the director’s shoulders.


KGRN is a reputed service provider in the UAE. We provide a platform for companies to get in touch with a licensed liquidator, who will guide you through the process of liquidation. We help you procure your liquidation certificate at the earliest.

Here are a few reasons why KGRN makes a perfect choice:

  • Firstly, we are committed to bringing 100% customer satisfaction.
  • Secondly, our services are affordable and reasonably priced. You can select a plan from the range of options available.
  • Thirdly, we provide timely service. 
  • Additionally, our services are transparent, and we maintain neutrality and impartiality during audits.
  • We also maintain 100% confidentiality. All your private details are encrypted during transactions to avoid privacy breaches.
  • Lastly, we are available 24/7 to clear your queries and assist you.

Frequently asked questions:

  1. What are the reliefs claimed by a company after its involuntary liquidation?
  • Firstly, the company can use its assets to repay its debts and make other financial settlements after its involuntary liquidation.
  • Secondly, the company can make a mutual agreement with the creditor ( who had filed the petition) for voluntary dissolution.
  1. What is a liquidation certificate?

A liquidation certificate is an official document issued by the DED after the company fulfils all its obligations. Hence, the certificate is issued after the liquidator files the report to the DED regarding the liquidation. The company must publish the same in at least two local newspapers.

  1. What happens when a company turns insolvent?

If a company turns insolvent, it hires a liquidator who auctions the company’s assets to repay its debts. The partners share the collected amount among themselves. The business closes, and the registrar strikes off the name of the company.

  1. Can a shareholder file a petition for the liquidation of a company?

Yes. A shareholder can file the petition for dissolution if he forecasts the company’s insolvency. He also can file a petition for liquidation if the company is taking part in illegal activities.

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