Liquidation Services in Bahrain
Company liquidation is a hectic task. The liquidation of a company is not just about closing it down; there are many factors to be considered while doing so. The government authorities have to be notified, the business licenses will have to be canceled, assets need to be distributed and the list goes on and there is a need for Best Bahrain Liquidators. The legal formalities included in company liquidation are the most tedious task among them all and must be performed by Top Liquidator in Bahrain.
There can be diverse reasons for liquidation, the major ones are;
- The expiry of license/ duration stated in the articles of incorporation/ association or the accomplishment of the objective for which the entity was set up
- The loss of all or a major portion of the entity’s assets
- Shareholders’ approval that the entity’s term of existence can be brought to an end as per stipulated majority, etc.
- When the company fails to pay the debts and dues, the creditors file a suit in court demanding the liquidation of the company. . If the company is not able to pay the dues within the date issued by the court, the company’s accounts will be frozen and the assets will be liquidated and divided among the creditors.
In the case of voluntary liquidation, when the company fails to pay its debt, the directors, owners, and shareholders will take a unanimous decision to liquidate the company. The r-process will be handled by the liquidator necessarily appointed by the shareholders. About ten years ago, GSPU, a Top Liquidator in Bahrain started providing the Best Liquidation services in Bahrain for corporate liquidations. As one of Bahrain’s best liquidators, we promise to help you through the full company liquidation procedure. The majority of a company’s liquidation procedure consists of legal requirements, and without the assistance of a Best Bahrain Liquidators, it could be taxing and take longer. The entire procedure will be walked through by our team of corporate liquidation specialists.As Best Bahrain Liquidators we can help you both as a liquidator and as a provider of liquidation services.
Canceling of licenses and seeking approval from different government authorities will be done by our professionals and will help you attain the liquidation report as soon as possible. Cancellation of the license, advertising in at least two newspapers about the company’s liquidation, submission of declaration papers at the Department of Economic Development (DED), obtaining objection letter from the partners, cancellation of the partner’s visa, liquidating the assets, can all be done by us. We offer company liquidation services across the country and we aim to make things easier for our clients with our prowess. With our extensive experience in offering company liquidation services, we have been able to keep our relationship with the government authorities and agencies alive, which will make things a lot easier.
Company liquidation may be of the following two types:
In a voluntary liquidation, the shareholders of a company opt to shut it down because they lack the resources to pay off the creditors. Priority is given to creditors in this kind of liquidation.
2. Compulsory Liquidation
When a court orders a company's liquidation, it is known as compulsory liquidation. The assets of the corporation are allocated among creditors and donors according to the priority of claims.
The liquidation process for free zone companies is similar to that of mainland companies, except concerning the notice period, the time frame required to liquidate the company, etc.
The Bahrain government sets out different types of documents to be submitted for the liquidation process. These documents are required for company liquidation both in free zones as well as the mainland. The essential documents are listed below:
- A copy of the license
- The copy of the Memorandum of Association (MOA), with any changes
- Power of Attorney (if any)
- Passport copies of all the shareholders
- Copy of the Emirates ID
- Shareholder’s resolution
- Application form of de-registration
When it is determined that a company will be unable to continue operating, it must shut down. Several things could cause this to occur. A company that must discontinue all of its business operations goes through a procedure called liquidation.
The business can have far more obligations than assets, which would result in losses. The business will have to close down if it cannot survive. A firm may choose to liquidate itself voluntarily if the management decided to do so for reasons they were aware of.
Upon completion of the liquidation procedure, the company's entire asset base is used to cover all of its liabilities. If even after all of the company's liabilities have been paid, some assets remain, they are sold, and the proceeds are then divided between the company's directors and shareholders
Company liquidation is the last resort that any management resorts to.
This means that the business cannot conduct any more business and has to shut down. There are many benefits of company liquidation to the business, such as:
1.It will allow the proper distribution of the assets of the company. In the liquidation process, all the assets of the company are first used up to compensate for the liabilities of the company, and after this, the remaining assets are then sold off, and the proceeds are then distributed among the shareholders.
2.Liquidation can be done if the companies want to make a new start in the business or do not want to associate themselves with a certain brand in any way.
These two are the most important benefits of company liquidation, which are available to a business. But the management should keep in mind that these advantages can be availed only if they utilize the services of professional and reputed auditing services.
An important decision-maker in the liquidation process is the liquidator.
As the Best Bahrain Liquidators our responsibilities are as follows:
1.Starting the Winding-Up Procedure
When the Board of Directors/Shareholders passes a resolution for liquidation or winding up and the appointment of a liquidator, the liquidator issues an acceptance letter upon receipt of such decision.
2.Publication of the Liquidation Notification
The liquidator publishes the liquidation notice in two local newspapers, one in Arabic and one in English, once the liquidation procedure has begun.
3.Overview of Business Asset Collecting and Distribution
The company's assets may be gathered, distributed, and settled of liabilities under the liquidator's supervision, if necessary.
4.Creating the Statement of Affairs
The liquidator draughts the statement of affairs and the liquidator's report as the final steps in the liquidation procedure.
We as the Best Bahrain Liquidators and the rest of the UAE provides the following Company Liquidations services :
- Assistance in preparing the Board of Directors/Shareholders resolution
- Auditing financial statements for the purpose of liquidation
Preparing the Statement of Affairs and the Liquidator’s Report, including the No Liability Letter
- Liaising with the licensing authorities for the submission of documents and liquidation of the company
The liquidation of a company in Bahrain is a complex and time-consuming process. At GSPU,Best Bahrain Liquidators we help our clients in following the procedures to wind up a company in Bahrain, should the need arise. GSPU being a financial consultant in Bahrain and Best Bahrain Liquidators, offers a wide range of services including accounting, auditing, software consultancy, and management. We have been providing the best audit services in Bahrain and the rest of the UAE for over a decade.
The liquidation period depends on the licensing authorities. For mainland companies, it is normally 45 days. For some free zones, it is 15/21 days. There is a 45-day notice required for certain free zones like Dubai Creative Clusters Authority, etc.
Yes, it is mandatory to publish the liquidation notice in any 2 newspapers (one in Arabic and the other in English).
Including the notice period, it may take 60-90 days to liquidate a company in Bahrain.
Yes, a company must cancel all visas and get a clearance letter from Immigration Department to complete the liquidation process. The company has to pay end-of-service benefits and other statutory dues, such as unpaid leave salary, air ticket, and unpaid salary, etc. to the employees.
In Bahrain, a company can be established in the Mainland as well as the Free Zone. It should be kept in mind that only the Approved Auditors are allowed to conduct an audit of the companies which have been established in the Free Zone. Every management should avail the services of reputed and professional auditors so that all the documents of the company are properly managed.
There are more than 37 free zones in the United Arab Emirates which cater different services to businesses. These free zones provide a platform to the companies and will help them to grow and develop in the Middle East.
These are the procedures for liquidating a corporation, and all businesses should adhere to them. The following list of stages is not a set list and can be altered to suit the demands and specifications of the business.
Step 1: Notifying the relevant authority
Step 2:All corporate documentation, including the lease agreement, formation certificate, and company license, must be revoked.
Step 3: From the authorities, the Firm must request the relevant clearances
Step 4:A Gazette must be published informing the public of the company's liquidation..