Businesses shut up shop for all kinds of reasons. When it comes to business in Qatar, some companies will choose to close their doors simply because they have completed the project they came here to do. Meanwhile, other companies may close down operations in Qatar to follow opportunities elsewhere.
But, just as there is a correct way to start a business in Qatar, there is also a correct way to end one. When it comes to the liquidation of a company here in Qatar, there are certain procedures that have to be followed. Fortunately, Fusion Group Holding has many years of experience in assisting with both company formation in Qatar – and company liquidation.
While each case will vary according to circumstance, this guide should give you an idea of what to expect when you go through the process of liquidation and dissolution of your Qatar business with Fusion Group Holding by your side.
What is liquidation?
First things first. What is liquidation? Liquidation is a formal insolvency procedure that brings a company to an end. During this process, all of the company’s assets are liquidated and the proceeds from the sale are distributed among creditors and shareholders, based on the priority of their claims.
Firstly, there is liquidation by agreement. As a voluntary process, this is sometimes referred to as a shareholders’ liquidation, as the decision is made by shareholders to put the company into liquidation. The reasons behind the liquidation can vary. It may be because the company has delivered the projects it was set up to deliver, because it has achieved the purpose for which it was created, or because it is no longer profitable.
Alternatively, a company may face compulsory liquidation. In this case, the liquidation of the company has been ordered by the court as a result of neglect or non-fulfillment of the company’s obligations. Certainly, every business is to avoid such process.
How do you proceed with liquidation?
No matter the reason for liquidation, the liquidation process needs to be carried out according to Qatari law. If your Qatar business is to go through the process of liquidation, you will need to ensure that the Articles of Association and Commercial Registration of eth company are kept valid throughout the process.
The Shareholders’ Resolution is to be executed resolving, liquidation, and dissolution of the company, as well as appointing a Liquidator. It is recommended to appoint a liquidator who holds a valid Qatar ID and who will take on and be available to finalize all of the proceedings.
After this documentation has been prepared, signed and, a request will be filed to the Ministry Commerce and Industry to put the Commercial Registration under liquidation. Then according to Qatari procedure, adverts will be published in local newspapers stating the company is under liquidation, giving instruction to creditors on how to claim their dues.
Meanwhile, all employees should receive their end of service and any other payments. They will then have their residence permits cancelled and must leave Qatar within 30 days, or transfer sponsorship to another company in order for the company to obtain immigration clearance for closure.
Finally, the company’s bank account shall be closed and the audit firm will go ahead to prepare and finalise the final account balance sheet, which is submitted to the Tax Department, along with the request of liquidation and dissolution of the company. From there, the company should receive its non-objection certificate from Tax Department to proceed with dissolution process.
What happens next?
The company will then follow the process of dissolution, providing the following:
- The valid Commercial Registration of the company.
- Originals plus copies of both newspapers with the advert notifying creditors of the company’s liquidation.
- Letter from the Liquidator declaring responsibility of the liquidation process, confirming all dues and obligations of the company have been cleared in accordance with Article (304) of the Commercial Companies Law 11/2015, stating that there are no more liabilities pending towards the shareholders or third parties.
- Resolution from the company’s shareholders stating that they accept the results of the liquidation, confirming receipt of their payments/dividends, and dissolving of the company.
- Copy of the Audit Report, signed/stamped by the Audit firm and the Liquidator, along with the non-objection certification from the Tax Department.
- The Commercial Registration form stating the request to cancel the Commercial Registration.
Commercial Registration, Trade License and Establishment Card of the company will be cancelled, thus finalizing the closure process.
Who can help?
As you can see, paperwork and procedure for this liquidation process are not in short supply. However, help is at hand. Fusion Group Holding are experts in guiding companies through the liquidation process, ensuring all documentation is filed correctly, and all procedures are followed according to Qatari law.
To find out more about Fusion Group Holding can help you, contact us today.