Newspaper Advertisement for Liquidation in UAE : A Comprehensive Guide

Company liquidation in the United Arab Emirates (UAE) is the formal process of winding up a business, settling debts, and distributing assets. Whether due to financial difficulties, strategic restructuring, or voluntary closure, strict compliance with UAE laws and regulations is required. One of the important steps in this process, applicable to both free zone and LLC entities, is the mandatory publication of a newspaper advertisement.

Public notice of the liquidation intent of the company is given by the advertisement by the newspaper to creditors, stakeholders, and the public at large. In such a case, this may open up a transparent information channel that would keep all parties abreast of the liquidation procedures, which may enable parties to raise claims or objections within the stipulated time. In this article, we will provide further details regarding the requirements of company liquidation through a newspaper advertisement in UAE: purpose, content, costs, and timeline.

Newspaper Advertisement Requirements

To write liquidation newspaper ads, information or requirements for English and Arabic language advertisements are as follows:

Content Requirements

1. Company Name: Write the name of the company to be liquidated clearly.

2. Liquidation Information: State the facts that are relevant such as:

• Why is the company being liquidated?
• When are they liquidating?
• Applicable instructions or notices over the liquidation process.

3. Contact Information: Write a number or email for contact in case there are queries.

Advertisement Specifications

• Language: Run separate advertisements both in English and Arabic to reach as many different people as possible.
• Publication: Choose the best local newspapers with the highest readership to obtain maximum visibility.
• Ad Type: Decide on the format of the ad:
  • Text Ads: A simple text will usually appear in the classified sections
  • Display Ads: These are larger, more eye-catching ads that can be laden with images.

Steps to Ad Publication

• Choose Newspapers: Decide which local newspapers that will best help you target your audience.
• Draft Copy: Well-written clear copy, made to the newspaper's specifications
• Ad: Use ad agency help if required to place and design an advertisement
• Publication Schedule: Decide on dates to run ads and dates to publish.

Purpose Of Newspaper Advertisement

Liquidation newspaper advertisements have the following critical purposes:

• Providing Information to Creditors and Stakeholders: A company provides a means of formal notification for creditors, stakeholders, as well as the public through liquidation. Thus, people will know of its status and the actions that may be needed.
• Public Advertisement of Liquidation: A business satisfies the formal requirements for giving public notice of liquidation through advertisement in neighborhood newspapers. It plays an essential role in publicity and will reach more people like potential customers and members of the general public whose interest might be in the company's assets or service.
• Compliance with UAE Laws: The legal requirements of the UAE have instructed the companies that are in the process of liquidation. It is issued notices relating to liquidation in newspapers. Therefore, the necessity of compliance is a very essential factor in avoiding any lawful consequences while ensuring the process of liquidation is conducted under regulatory standards.
  
  

Documentation For Liquidation

• Liquidation Resolution: A resolution of the board or shareholders to effect liquidation.
• Board Resolution: A resolution by the board of directors directing the liquidation and appointing a liquidator.
• Certificate of Registration: This is evidence that the company is registered, which could be required for determining its legal existence.
  

Other Relevant Documents:

• Declaration of solvency if applicable
• List of creditors and their claims
• Financial statements and records.
• All resolutions pertaining to the company's financial situation.

Costs And Timeframe

• Advertisement Costs: Rs 1,500 to Rs 3,000 for advertisement in local dailies for advertisements upon publishing liquidation notice.
• Publication Timeline: It usually takes around 1-2 weeks for the advertisement to come out in the newspapers to give sufficient notice to all.

Freezone v/s LLC Liquidation

The liquidation processes of Freezone companies and LLCs in the UAE are highly dissimilar. In the case of an LLC, it would have a board resolution followed by authentication through courts. There is license cancellation at the DED, which includes clear settlement of outstanding fees, cancellation of visas, and publishing notice in local newspapers, which could take approximately 45 days if executed promptly. On the other hand, free zone companies have to follow a much more streamlined procedure administered by one authority. Other than requiring a board resolution and registered liquidator, foremostly, they must obtain clearances from departments such as customs and telecommunication, amongst other things, as well as pay all dues to the free zone authority. Specific requirements of Freezone companies include zero liabilities, cancellation of all active visas, and submission of a liquidation letter by a registered auditor. Overall, while both types of companies have a structured procedure to follow regarding liquidation, Freezone companies generally experience an efficient process due to centralized governance and fewer bureaucratic hurdles.

Conclusion

The liquidation process in the UAE follows some specified steps to ensure that all the necessary procedures have been completed by the company. Among these is publishing a notice in an Arabic newspaper for at least 15 days in respect of the liquidation of such companies due to its intended or effective closure. Such a step, therefore, is taken to ensure that all interested parties in such business processes are notified and all their claims cleared before such effective closure takes place. Considering the complications involved in liquidation, especially Freezone companies, professional help should therefore be very welcome to take advantage of this and avoid the problematic non-fulfillment of legal and regulatory requirements. Reyson Badger specializes in providing comprehensive liquidation services tailor-made for business houses in free zones ensuring a hassle-free process. The experience can significantly alleviate the woes of business closure over a firm and may be able to provide more time to the owners of a business to focus on other aspects of business during such times.