There can be reasons why a company needs to be deregistered, and most of the time, it’s due to liquidation. However, it can still remain as a company even if it’s not operating anymore unless it’s deregistered and the license is cancelled.
Why is it Important to Cancel the License?
A company is under the legal requirements of the government. Therefore, it’s for the good of business owners to cancel the license and related permits or take help of any consultant firm offers top Company Liquidation Services in Dubai, UAE so that the concerned government departments will be aware that they wouldn’t need to be fined for non-renewal of license on its expiry date. Once deregistered, a company will not be present in the registry anymore, keeping them from trading and doing anything under its name.
Steps to Take Before Deregistering
Outstanding Payment Collection
The outstanding accounts receivable that you need to collect from your clients need to be done so with good strategy. It’s not a good idea though to announce that you’re closing down. An insistent collection strategy might work by calling them yourself to demand payment.
Job Completion
You will need to inform your clients about your business closing down. With this, you also need to finish any pending jobs that you have to avoid lawsuits. You can also repay or refund them for the outstanding jobs that you cannot possibly complete on time.
Selling of Inventory and Assets
You can announce to your customers as well that you are selling your assets and put a discount on them. If there are still remaining assets, you can sell them online.
The revenue that will be obtained from this will then be distributed to the owners of the company (if there are more than one) according to the agreement that is signed by all shareholders in the beginning of the venture.
Payment for Employees
In notifying them of the situation, you can either tell them ahead of time for them to have a chance to find another job or tell them in the last minute to avoid any resignations. Since you are the owner and you know your employees well, the judgment on what the best thing to do lies in your hands.
Aside from their salary, you need to pay them of any reimbursements and collect company cars, cell phones, laptops, etc. that are still in their possession.
There are legal documents that are needed in deregistration of company. Depending on the jurisdiction that you belong to, different requirements are necessary to be presented before a company is completely deregistered.
You should also know more information regarding this to be sure that you are on the right page when you start to close down your business. It helps to have some assistance from consultants because they are knowledgeable about this.
There are a lot of company liquidation services available in any country that you are in. If you are in the United Arab Emirates (UAE), there are liquidators in Dubai who can assist and advise you on this matter.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin