Bin Hindi Law Firm provide liquidation services to all types of companies, including Limited Liability Companies, Sole Establishment, and Free Zone Companies that are closing their operations legally. This includes all services a company requires while winding-up or under dissolution, which refers to the final stage of liquidation. We also handle the liquidation of a part of the company that has ended.
Bin Hindi has always taken a qualified approach when handling the liquidation of a company by taking a strict adherence to the formal procedures. Our exhaustive understanding and in-depth knowledge of the existing legislation during the liquidation will benefit our clients. We will handle the process with less stress for the clients and in a seamless fashion.
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How Liquidation can be done?
Liquidation can be done either voluntarily or under compulsion, as explained below:
- Voluntary Liquidation or liquidation by agreements is the type where the shareholders themselves decide to cease the company’s operation due to:
- Diminishing or negligible profits
- Non-accomplishment of delivery of projects
- Non- accomplishment of the purpose of company creation
- Compulsory Liquidation is the liquidation that has been forced upon the company by a court ruling due to neglect or non-fulfillment of obligations undertaken.
The main characteristics of liquidation are:
- Individuals within the company are not affected, however, the company is.
- An appointed Liquidator takes care of the management of the liquidation, in turn, sparing the directors and other individuals of the company of the stress involved.
- After a company is liquidated, creditors cannot pursue the directors for payment.
- Debts that are unsecured are typically written off
All legal cases that are presently facing the company will be halted when the company is liquidated
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With reference to the new Companies Law issued by Royal Decree No. (M/3) on 28/1/1437AH that refers to the reasons for a company’s termination include:
- A company’s termination through partners’ agreement to dissolve a company and terminate it before its expiry.
- Issuance of a final judicial decision for dissolving or invalidating a company at the request of one of the partners or stakeholders and any condition that deprives the use of this right is considered void.
- In cases of disputes between the partners that become difficult and non-amicable, recourse to the judiciary and demanding judicial liquidation is unavoidable.
Our team of experienced lawyers will assist our clients in fulfilling the following for the company’s liquidation,
- Filing of a Request for Liquidating the business attached to the partners’ decision and signed by the partners and agreeable to the form of the Ministry of Commerce.
- Preparation of an Updated Financial Report, accredited by a chartered accountant who is licensed to practice the profession in Saudi Arabia. This is to prove that the company is able to meet its obligations at the date of liquidation.
- Payment of the Outstanding Debts to the creditors or entering into a reconciliation agreement with them. This is to help in the winding up process of the company when the court declares it bankrupt either upon request by creditors or the company.
- Announcement of the Company’s Liquidation and Appointment of a Liquidator that could be one of the partners, the lawyer or an accountant as per the form of the Ministry of Commerce. The Liquidator is supposed to manage the affairs of the company until the liquidation process is completed and will also have to mention that the company is is liquidation in all of its correspondences regarding the company.
- Presentation of the Business Liquidation’s Final Account after accreditation from the partners and authorized by the chartered accountant.
- Presentation of Clearance Certificate from both Income and Zakat Department. This is to allow the cancellation of the company’s commercial registration.
- Presentation of Certificate from Labor Office to show that the company is cleared of any sponsored employee.
- Announcement of Completion of the Liquidation Process.