A liquidation audit is a mandatory and crucial step in the company liquidation process in Ajman Mainland. It ensures that the company’s financial records are accurate, all assets and liabilities are properly accounted for, and the business meets its legal and tax obligations before deregistration.

The audit provides full financial transparency protecting shareholders, creditors, and employees and is required before the Ajman Department of Economic Development (Ajman DED) issues the final liquidation certificate.

Key Stages of the Liquidation Audit Process

Initial Financial Review:

The audit begins with a comprehensive examination of the company’s financial statements, including balance sheets, profit and loss statements, bank records, and VAT filings. This establishes the company’s financial position and ensures accurate reporting.

Asset Verification and Valuation:

All assets — such as equipment, property, inventory, and intellectual property — are verified and valued to ensure they are correctly listed and can be distributed according to liquidation priorities.

Liability and Debt Assessment:

The auditor reviews all outstanding obligations including supplier invoices, employee salaries, end-of-service benefits, loans, and tax dues. This helps confirm that all liabilities are identified and settled properly.

Tax and VAT Compliance Check:

Compliance with the Federal Tax Authority (FTA) is verified. The auditor ensures that all VAT returns have been filed, taxes settled, and VAT deregistration has been properly processed to avoid penalties.

Debt Settlement and Distribution Review:

The auditor monitors the fair settlement of debts, ensuring that creditors and employees receive their entitlements according to UAE Commercial Companies Law.

Preparation of the Final Liquidation Report:

Once all verifications are complete, the auditor prepares a Final Liquidation Audit Report. This document provides a detailed summary of the company’s assets, liabilities, settlements, and financial status at the time of closure.

Submission to Ajman DED and Deregistration:

The final audit report is submitted to the Ajman Department of Economic Development (DED) along with all supporting clearances. Upon approval, the DED issues the Official Liquidation Certificate, confirming the company’s deregistration from the Commercial Register.