Liquidation means winding up a business. Simply put, company liquidation is a solvency process in which a company’s assets are valued and sold off in order to clear any debts that it may have. The larger a business is, the more complex the liquidation process becomes since more assets and liabilities need to be taken into account. The liquidation process in the UAE can also be tricky because there are loads of authorities with their own rules for liquidation. Knowing the rules and regulations that apply to your company is important.

There are two kinds of liquidation i.e. mandatory and voluntary. Mandatory liquidation (also known as creditor’s liquidation) is carried out when a company is forcibly dissolved in order to pay off its debts. Voluntary liquidation isn’t forced upon a company by a third party. It is a decision taken by the company in order to clear its debts.