For a new entrepreneur, getting his business into success would be the first and foremost goal. Such business people build their strategy around business expansion, gaining more sales and attracting more investors. However, starting a business without an exit strategy is a sign of a weak business plan. It is important for you to know when and how to stop the business, or you will end up as the victim of unforeseen situations. The recent liquidation of Gulf Greetings LLC is a stark reminder for companies to have a sound exit strategy in place.
Most companies consider company liquidation in Dubai, UAE, as the best strategy to exit their business due to the simplicity and cost-efficiency of the process. In the post-pandemic world, it makes sense to have a solid exit strategy such as company liquidation as COVID-induced economic uncertainty has hit the revenue of many businesses. Read ahead to understand why company liquidation in the UAE is the most viable exit strategy for businesses of all sizes.
You can Minimise Debt Repayments
As an entrepreneur, liquidation allows you to wind up the company without a huge debt repayment burden. Depending on your specific situation, some debts may be written off, and the rest can be settled through the sale of assets. The option to settle the creditors through asset sale makes the company liquidation in the UAE a robust exit strategy for you.
You are Saved from Court Actions
Once you appoint a company liquidator to wind up your UAE business, any legal action pending against the company will be halted. The creditors can’t take managers or directors to court for outstanding debts once the liquidation process commences. However, this is applicable as long as you haven’t any personal liability towards the company debts. Hire approved company liquidators in Dubai to wind up the company seamlessly.
Owners Need Not Oversee Liquidation Process
The business owners, directors or shareholders need not be personally involved in the UAE company liquidation process. When they pass the board resolution to appoint a liquidator, the power of the board shifts to the liquidator. Company liquidators in the UAE will complete the process of winding up the company without bothering the owners or directors.
Ability to Cancel Lease Agreements without Hassle
Company liquidation is considered an effective exit strategy not only because it helps minimise the debt repayments but allows you to stop any further payments going forward. Normally, all lease or hire purchase agreements will be terminated when you commence company liquidation in Dubai. It means you are no longer liable for any further payment that may have constituted a part of your original agreement. The best company liquidators in Dubai can oversee the liquidation process to enable you to cancel the lease agreements without any hassle.
Liquidation Safeguards the Rights of Employees
Company liquidation in Dubai grants the provision for employees to claim redundancy pay and other entitlements. The employees are entitled to receive compensation for the redundancy as per Article 115 of UAE labour law. Your UAE company liquidation expert will look into the matter to ensure that the employees get their pending salaries and entitlements after selling the assets.
Relatively Low Costs Involved
Company liquidation in Dubai is all about winding up a company by distributing its all assets to the claimants; therefore, the owners need not worry about incurring great expenses. Since all the dues are settled through asset selling, UAE company liquidation remains to be a simple and cost-effective exit strategy. Consult with the best company liquidators in Dubai to wind up your company cost-effectively.
Talk To the Best Company Liquidation Experts in Dubai
Liquidation, in layman’s terms, means closing the operations of the company and distributing its assets to the creditors. Company liquidation in Dubai gained traction recently, especially after the COVID-19 pandemic. Companies such as Sprii, Gulf Greetings LLC and Arabtec opted for liquidation in the UAE due to cashflow issues created by the pandemic. All of these companies found liquidation as the best exit strategy due to the factors mentioned here in the blog such as low costs, provision for cancelling lease, no court actions etc.
The process of liquidation is lengthy, and the owners and shareholders need to find the top company liquidators in Dubai, UAE to make it hassle-free. In terms of experience and qualified professionals, Jitendra Business Consultants (JBC) remains to be the leader in undertaking company liquidation in the UAE. JBC’s dedicated company liquidation services in Dubai is key to ensure that your company is wound up in the best interests of the creditors, employees and authorities.