We’ll take the complexity and hassle out of all your accounting, audit and tax needs.
If you’d like to talk to our consulting team, contact us via the form and we’ll get back to you shortly.
Liquidation audits are comprehensive examinations of a company’s finances, such as transactions and assets if its business is being liquidated. Audits serve to ensure assets and liabilities are correctly recorded, liabilities disclosed accurately, and distribution to creditors and shareholders meets applicable regulations and legal requirements. Verifying that all information provided in the financial statements is accurate, as well as determining their value, as well as settling any outstanding loans and distributing any remaining funds equally and fairly among stakeholders during company closure is vitally important to ensure completeness and protect creditors, shareholders and other key players’ rights.
Liquidation for a company is the procedure of stopping the business’s activities and giving its assets to creditors typically when the company is insolvent and cannot meet its financial obligations. The process involves the securing of the assets of the company, as well as obligations, paying them off and then disbursing the funds that are left for the shareholders. It can be a voluntary decision that is initiated by directors of the company and shareholders, or it can be a mandatory process that is imposed by the court’s order typically because of the submission of a request from lenders. The main objective of liquidation audit service is to ensure the company’s finances are restructured promptly and the assets are properly and legally distributed, and that the company is declared officially dissolved.
In this instance, Failing to comply with a liquidation request can lead to serious consequences for a company, including the potential blacklisting of its current owners, which may hinder their ability to incorporate future businesses. Initiating the liquidation process in Dubai begins with appointing a liquidation audit service, a step reserved for approved businesses. The regulations clearly outline the duties and responsibilities of the appointed liquidator.
In the past 10 years, the UAE area has established the pace of business development that is modern. It has played the model as well as a location for many local and international companies to establish their own businesses. The primary reason for the success of this region is due to the development of "tax-free business zones" as well as the formalized and strict but affluent regulations and legislation that have boosted confidence in this business sector. to be integrated into the city.
Although many companies are out to reap the benefits of these methods, there will be certain instances where the beginning of an organization may not yield the anticipated benefits. There will occur instances of closing companies where investors are seeking to recuperate their investment because of poor performance, or due to an alteration in economic conditions which led to losses, or other similar reasons.
There are many reasons why companies choose to liquidate assets to close the company. It's not simple as simply removing an existing phone line or turning down the lights.
To ensure fairness of all the parties that are affected SOPs that are subject to strict legal frameworks that govern these closures to ensure that all obligations and fees are paid, and that everyone is in the dark when the process is complete. Another reason for these closures is the need to assure the rights of UAE citizens that they are not being unfairly treated when companies shut down. In addition to that, authorities from the UAE Govt ensures that there enough regulations set in the first place.
If you observe the first signs of insolvency, it is recommended to conduct an extensive internal audit of your company to identify the cause of your company’s inability to perform. Liquidation audit firms conduct an extensive analysis to pinpoint areas for improvements. It has been proven that companies with an internal audit department that is well-established are 10 times more likely to of not going through bankruptcy than firms who don’t have robust internal procedures.
The liquidation audit is vital to guarantee complete transparency and legal compliance when it comes to the task of winding down a company. It is an in-depth review of the accounting records for the company along with assets and liabilities to assure that financial transactions have been properly documented and that assets are valued precisely. The audit assures creditors are paid in a timely fashion and that shareholders are paid the remainder of the money in an equitable way and that legal obligations are met. In providing an objective analysis of the financials and records of a company, and ensuring that liquidation audits are conducted, an auditor can warrant that the interests of creditors, shareholders as well as other stakeholder by ensuring any liquidation process is executed in an efficient and fair manner.
A liquidation audit Dubai must be conducted by a licensed and independently certified liquidation auditor, or an Insolvency Practitioner accredited and licensed to perform the reviews. They are usually Certified Public Accountants (CPAs) and chartered accountants with abilities and experience in the insolvency and liquidation processes. They are selected by the directors of the firm, as well as shareholders, or the court, according to the type of liquidation being considered. Their impartiality and expertise are vital to making sure that an audit is performed in a fair way that is precise, accurate and in line with the applicable laws and regulations. They will make sure there is fairness and honesty in the process of liquidation.
No objection certificate (NOC) required by Dubai Electricity and Water Authority (DEWA) and Etisalat or DU for-utility clearances from the Company, in cases where applicable.
Shareholders of the firm are required to submit an official letter on the letterhead of the company that states that the firm’s auditors were named liquidators. The letter must be sealed and signed by the shareholders.
The trial balance which includes all transactions before day of liquidation. This document as well as other accounting records that go back until liquidation occurs, are required.
Another option for the trial balance to maintain up-to-date entries of transactions on your Excel spreadsheet.
If there were bank loans that were paid back, then it is expected that the bank(s) will issue a No-Liability Certificate upon the repayment of their obligation to the bank.
The business must provide an official no liability. Certificate that is printed on the letterhead of the corporate.
Letters of closure to banks are required to conduct an audit of liquidation.
The lack of liquidity is a result of lack of cashflow monitoring.
Audit.ae is a liquidation audit firm in Dubai. Audit.ae can help you with a liquidation audit by providing highly qualified services that will ensure an uninterrupted and reliable winding-up process. With an expert team of experts in auditing and the insolvency process, Audit.ae can meticulously review and validate financial records, precisely assess assets, and ensure that all liabilities are appropriately accountable in a timely manner. We prepare precise reports and provide guidelines on the way assets are distributed to creditors and shareholders in addition to ensuring that they are following regulations and legal requirements. With our expertise, Audit.ae helps safeguard the rights of all stakeholders through providing an effective, transparent and efficient liquidation process.
Answers to your most common queries are as follows:
It ensures transparency and accuracy in the distribution of assets to creditors and stakeholders and verifies that the company’s financial obligations are met.
A liquidation company audit involves reviewing all financial records, verifying the valuation of assets, ensuring the proper settlement of liabilities, and confirming the equitable distribution of remaining assets to creditors and shareholders.
The duration of a liquidation company audit varies based on the complexity and size of the company’s operations, but it generally takes several weeks to a few months to complete.
Essential documents include financial statements, asset inventories, creditor claims, bank statements, and any records of liabilities and assets.
