Compulsory Liquidation of Commercial
Compulsory liquidation of a commercial company in Qatar is a legal procedure in which the business ceases to exist. This process is referred to as creditors liquidation and occurs when a company cannot fulfill its contractual obligations. This can occur due to several factors, including insolvency, changes in the market, outdated technology, or tight regulations. Regardless of the reason for the liquidation, there are certain procedures that must be followed.
When a company dissolves, all outstanding debts become due immediately. A liquidator will send registered letters to all creditors, acknowledging receipt. The notice will be published in at least two local daily newspapers, one of which must be Arabic. The notice contains a 45-day deadline for the creditors to submit claims. If no claims are received after this period, the unclaimed debts should be deposited with the treasury of a competent court.
Once the liquidator has collected the money owed, the value of the debts will be deposited in a court of competent jurisdiction until creditors are able to claim it. However, this deadline is three years after the date of the company’s announcement of liquidation. After the liquidator has collected the money, he will distribute it among creditors in priority order. This means that employee salaries and government payments will be paid before rent due to landlords of real estate and other debts owed by the company.
Compulsory Liquidation of Commercial Companies in Qatar
When the company goes into liquidation, the liquidator will be appointed. The Registrar must receive notice of the liquidation in Arabic. The commercial registry will approve the liquidation request. The liquidator will need to collect the assets of the company, pay the debts, and pay employees as per their employment contracts. During liquidation, the business bank account will be closed and a legal appointed auditor will prepare a final balance sheet for the company. In addition to this, the liquidator must obtain a tax clearance from the Ministry of Finance.
The Amending Law of 2020 has repealed the restrictive provisions for private shareholding companies trading on the Qatar Stock Exchange. The Amending Law makes changes to the Companies Law and enhances the legal and regulatory framework in Qatar. It was published in the Official Gazette on 16 August 2020 and will come into effect thirty days after publication. This publication is not legal advice. Please consult a lawyer before acting upon any information in this article. The views expressed herein are those of the author and do not reflect those of his law firm or those of any client.
how to liquidate a company in Qatar
The OR’s main objective is to bring in the highest possible returns for the creditors. After the liquidation process is complete, the company will be struck off the Companies House register and cease to exist. This process may take up to a year, depending on the company’s circumstances. This process is difficult and often takes a significant amount of time. However, it is worth it in the long run.
