Liquidation (or “winding up”) is a process by which a company’s existence is brought to an end.
First, a liquidator is appointed, either by the shareholders or the court.
The liquidator represents the interests of all creditors.
The liquidator supervises the liquidation, which involves collecting and realizing the company’s assets (turning them into cash ), discharging the company’s liabilities, and distributing any funds left over among the shareholders in accordance with the company’s constitution.
After these steps have been carried out, the company is formally dissolved.
It is important for relevant government entities to know that you are no longer in the business so you will avoid any accumulated fines and penalties incurred upon your license , when it is not renewed upon expiry date.
If you are in a shareholding company, it is important to discharge your liabilities towards creditors and partners and protect your interests and shares. It is also wise to put your goodwill and business reputation in perspective, if you decide to open a business again.
Freezing a license is different than terminating a license completely. In Dubai, companies may keep their trade license inactive for three years by paying a certain freezing fee. However, they cannot extend it beyond that specific period.