With the ongoing frauds financial investments always pose a risk of shedding all your cost savings. There have actually been lots of situations wherein a private after purchasing some company later on learns that the company has disappeared or is liquidated. Also it shows up that lots of Real Estate Buyers or individuals/companies managing companies in the UAE are prevented to launch lawful process versus a company that went to or under liquidation.
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It usually occurs that the worried celebrations are worried with the technique that will certainly be needed to be followed in order to be included with the listing of Financial institutions and whether lawsuits or adjudication, as could be attended to in the Agreement in between the celebrations, permit such technique of healing of the financial obligation owed.
The solution to this dilemma is found in Commercial Firms Law (CCL). The CCL permits for a case to be described the court or settlement to recover a debt from a firm under liquidation. Unlike bankruptcy where court actions will stop, court activities could be submitted or can be proceeded with in situation of liquidation (Article 691 of the UAE Commercial Code). The UAE Commercial Companies Regulation No. 8 of 1984 (“CCL”) states that immediately upon its dissolution the company will be taken into consideration to be in liquidation. Throughout the liquidation period it will maintain its corporate individuality to the level needed for the liquidation rules. The authority of the supervisors or the board of supervisors shall stop with the dissolution of the firm. The business establishment will continuously exist throughout the liquidation period, as well as their authorities shall be restricted to liquidation organisation that is not within the authority of the liquidators. The liquidator shall execute all the required liquidation features, particularly to stand for the business on trial of regulation, work out the business financial debts and also offer its movable possessions or realty by auction or any other approach unless the paper appointing the liquidator stipulates that the sale must be executed in a specific technique.
Thus, as an issue of legislation, when the company is liquified as well as liquidated, the firm conserves its corporate body during the liquidation procedure and also the liquidators represent the firm under liquidation before the court of law.
Hence, as just the reps of the company adjustment, no extinction of the corporate body happens before the liquidation completion and closure. There is neither assignment neither transfer of any type of agreement that steps in between the business and the liquidators to think about the latter as a party to court or adjudication procedures.