Form of a lawsuit to liquidate a company in the Emirates: requirements and procedure

When making a decision to file a lawsuit to liquidate a company in the Emirates before the competent authorities. In this case, partners or creditors turn to a company liquidation lawyer in the UAE to provide… Form of a company liquidation lawsuit in the UAE In the right way and to guarantee their rights. Below is a detail about the conditions for accepting the lawsuit, the basic terms in the form, a proposed form, and the steps for the lawsuit to proceed after filing it, in addition to common questions of interest to every stakeholder.

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Conditions for accepting a company liquidation lawsuit in the UAE

Before the request to liquidate the company is accepted, a set of legal conditions must be present to ensure that the lawsuit is not formal, but rather legally justified and has a basis. The most important of these conditions are:

1. Jurisdiction and subject matter jurisdiction: The lawsuit is filed before the competent court in the emirate in which the company is registered or in which the actual headquarters is located. The lawsuit must be within the jurisdiction of the competent civil or commercial courts in the emirate. The lawsuit must also be the subject of the liquidation of a company and not transactions outside the jurisdiction of the judiciary.
2. There is a legal justification for liquidating the company (the reason for liquidation or the existing situation): The liquidation request is not accepted if it is not shown that the company deserves to be liquidated. Legally accepted reasons for liquidation include the expiration of the specified period, the expiration of the purpose, the decision of the partners, the loss of more than half of the capital, the issuance of a court ruling dissolving the company, or the company becoming unable to fulfill its obligations (bankruptcy or insolvency).
   If the company is insolvent or bankrupt, a claim may be brought under the new bankruptcy regime.
3. The lawsuit must be brought by a person with an interest or right (a partner, a confirmed creditor, or the company itself): No person may file the lawsuit without showing a legal capacity or interest in liquidation (such as being a partner, a confirmed creditor, or someone with a legal interest).
4. Availability of supporting documents: Documents that support the request must be attached to the lawsuit: articles of incorporation, financial records, statements of debts and rights, an initial report on the company’s financial position, partners’ decisions, or any liquidation justifications. It also requires that the lawsuit be announced to the defendant (the company, its partners, or the company’s management).
5. It does not conflict with special provisions or the company’s bylaws: If the company’s articles of incorporation or bylaws stipulate special conditions or procedures for liquidation, they must be fulfilled first. If the documents do not contain a liquidation clause, the provisions of Federal Decree No. 32 of 2021 will apply.

If these conditions are met, the court will usually consider the application initially, and may invite the opponent to submit comments or objections before commencing the actual liquidation.

The basic items that must be contained in the form of a company liquidation lawsuit in the Emirates

The following is a list of the basic elements that must not be overlooked in the form of a company liquidation lawsuit in the Emirates:

• Brief introduction: Definition of the parties (the plaintiff – the defendant – the person you are demanding to liquidate the company) and their legal status.
• Jurisdiction: Determine the competent court in which the lawsuit is located (name of the emirate and type of court).
• Legal basis: Reference to the legal texts that are adopted, such as Federal Decree No. 32 of 2021 regarding commercial companies, and Federal Law No. 51 of 2023 regarding bankruptcy (if relevant).
• Facts and circumstances: A detailed account of the facts of the situation (company formation, operations, debts, losses, default, if any, attempts to dissolve, if any).
• Request: A clearly required form, for example:
  • Judgment to liquidate the company.
  • Appointing a liquidator (either at your request or leaving the matter to the court).
  • Obligating the company to pay debts according to the legal arrangement.
  • Distributing the remaining assets to the partners according to their shares after paying the debts.
• Statement of rights and debts: A list of the rights the plaintiff owns and the debts or claims she claims, with justifications and evidence, and specifying the order of entitlement if necessary.
• Attached documents: A reference to attachments such as the articles of incorporation, financial records, debt lists, minutes of partner meetings, any previous liquidation decision, if any, and other means of proof.
• Announcement and Notice: A request that the court order that the liquidation be announced to the creditors and give the company’s employees and partners the opportunity to plead or object.
• Executive form, if necessary: ​​Request that the lawsuit be executory immediately upon its issuance if it is not given an opportunity to correct or object.
• Case, representation, and attorney fees: A statement of the legal fees incurred and the plaintiff’s right to bear attorney’s fees or a request that the defendant be obligated to pay them if his defenses are rejected.
• Signature and date: Signature of the lawyer or plaintiff, mentioning the date of filing, the name of the court, the plaintiff’s address and addresses.

Every clause in the form of a company liquidation lawsuit in the UAE is necessary to ensure that the lawsuit is complete in form and substance.

A proposed model for a company liquidation lawsuit in the UAE

Here is a suggested template for a company liquidation lawsuit in the UAE that you can use as a structure, modifying and adapting to the actual facts:

Introduction to the lawsuit
On the day of…/…/…
Commercial court in the emirate (mention the emirate)
The entity to which the lawsuit is filed: Court (… – Commercial Department)

Plaintiff: Mr…. (name of partner or creditor)
Nationality:…
Accommodation:…
ID/residence number:…
His legal address in the UAE:…

Defendant: The company “(Company Name)” is registered in the commercial registry in the Emirate of… under number…, and is hereafter referred to as “the Company.”
(If necessary: ​​the defendant partners, if the lawsuit requires this).

Jurisdiction:
I present to your esteemed justice this lawsuit before the competent court in (the emirate) for substantive and spatial jurisdiction, considering that the company is registered in this emirate and its actual headquarters is there.

Legal basis:
I base this claim on:

• Federal Decree No. 32 of 2021 regarding commercial companies, especially Article 302 onwards on the subject of liquidation and rights.
• Federal Law No. 51 of 2023 regarding financial law and bankruptcy, if the situation is considered difficult and it is considered that liquidation must take place within the framework of bankruptcy.
• What the court sees as texts or principles of justice, if necessary.

Facts:

(Here the plaintiff details the facts, such as:

• The company was established on… with capital…
• Performing a specific activity and then accumulating losses or debts.
• Attempts to settle, warn or correspond with the company.
• Proof of the company’s inability to fulfill obligations or the absence of taking financing or restructuring measures.
• Any previous decision of the partners or compensation due)

Rights and debts claimed:
I demand that the liquidation begin, taking into account that I have the right to demand the following:

Requests:
For these reasons, I petition your distinguished justice:

1. Judgment to liquidate the company “(company name)”.
2. Appointing a legal liquidator (leave the matter to your justice to choose the liquidator if it deems appropriate).
3. Obligating the company to issue a liquidation announcement to the creditors, and to announce it in local newspapers according to what the court deems appropriate.
4. Obliging the company to pay my debts according to the legal arrangement, and to pay any amounts shown in the final accounts.
5. After paying the debts, distribute the remaining assets to the partners according to their shares stipulated in the articles of incorporation or according to what the arbitrator decides.
6. Obligating the defendant to pay attorney’s fees and judicial fees.
7. Make this ruling enforceable immediately upon issuance.

Attachments:

• The articles of incorporation, bylaws and any amendment.
• Financial records and financial position statements.
• Claims documents (contracts, invoices, correspondence).
• Minutes of meetings, if any.
• Any other evidence that supports the claim.

the signature:
The plaintiff/his lawyer:…
the date: …

This is a sample form for a lawsuit to liquidate a company in the Emirates. It is a general structure and requires customization according to the actual situation, the decisions of the partners, or the circumstances of the liquidation.

Steps for conducting a company liquidation lawsuit after filing it

Once the case is submitted to the court, the matter goes through several stages until the final ruling is reached and the liquidation is implemented. Here’s the typical timeline and expected actions:

1. Initial examination of the application and study of formality: The court examines that the lawsuit meets the formal requirements (formula, jurisdiction, attachments). If a deficiency in the form or documents becomes apparent, the court may require the plaintiff to complete them or reject the lawsuit in form.
2. Issuing an order to inform the defendant: The court orders that the company (and sometimes the partners) be informed of the lawsuit, and gives them time to respond or submit observations or objections.
3. Pleadings of the parties: The defendant presents his defense before the court, and may raise objections on the legal or factual basis, offer settlements or debt repayments, or propose restructuring.
4. Investigation of evidence (if necessary): If the judge deems that there is a need for additional evidence, he may request that an accounting expert be conducted on the company’s conditions, summon witnesses, or examine the books of accounts.
5. Issuance of a preliminary ruling on liquidation: If the court is convinced that there is justification, it issues an order to liquidate the company, appoint a liquidator, and obliges the defendant to implement the declaration of debts and assets. The name of the company is added with the phrase “under liquidation” in commercial records.
6. Liquidation Announcement for Debts: The liquidator proceeds to issue a liquidation declaration to creditors to inform them of the necessity of submitting their claims, often through publication in two local newspapers (one of the newspapers is in Arabic).
   It will also be notified through known means of communication, if any.
7. Debt collection and asset transfer: The liquidator collects the company’s rights (debts owed to others), transfers them to the liquidation account, and sells the company’s assets (movable or immovable) at market value. The order of creditors should be taken into account: secured creditors first, then unsecured creditors, and lastly partners if anything remains.
8. Preparing the final account for liquidation: After completing the collection of rights and paying debts, the liquidator prepares a final account that shows the revenues, expenses, amounts paid, and remaining assets for distribution. This account is submitted to the court for final judgment.
9. Final ruling and closure of liquidation: The court issues a ruling approving the final account and ending the liquidation, with an order to notify the competent authorities (registry of companies, regulatory authorities) to officially cancel the company registration. It is then recorded in the commercial registers that the company is “defunct/defunct”.
10. Implementation of the ruling and distribution of assets: The remaining assets are distributed to the partners according to their shares, after paying the debts. An immediate execution order may be issued if the judgment is issued in an executive form. In the event of a dispute or objection after the ruling, the door to appeal or objection to implementation may be opened in accordance with the law.
11. Legal end of the company: After the execution of the ruling, the company is officially canceled and no longer has legal personality, and is withdrawn from the commercial register and any regulatory records.

This timeline may take from several months to years, depending on the complexity of the assets and debts and the presence of objections or disputes to the liquidation.

According to Federal Decree No. 32 of 2021, the liquidation period can be extended by a decision of the partners if this is approved in a general meeting, or by a judicial decision if the liquidation exceeds the expected period.

Frequently asked questions about the format of a company liquidation lawsuit in the UAE

The format of a company liquidation lawsuit in the UAE is of great importance to ensure that the lawsuit is accepted and the rights of the parties are achieved. It is necessary for a company liquidation lawyer in the Emirates to ensure that the basic provisions are included, and to ensure that the conditions for acceptance are met, and the case must be followed up until the final ruling and implementation. Regardless of the type of liquidation (voluntary or judicial), carefully following legal procedures and submitting strong documents enhances the suit’s chances of success.

Legal Note: The information below is for educational purposes and does not constitute personalized legal advice. The matter is subject to the circumstances of each case, and to obtain accurate legal advice, please contact a lawyer licensed in the UAE.

For more information, you can see: What are the types of liquidation of companies in the Emirates?, in addition to the procedures for bankruptcy of companies in the Emirates, as well as the conditions and procedures for declaring bankruptcy. Limited liability company in Dubai.

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