The liquidation process of companies in Qatar is a legal procedure stipulated in the Commercial Companies Law No. (11) of 2015 and its amendments for 2021, which aims to terminate the existence of the company in a manner that preserves the rights of all parties.
According to Article (307), the liquidation process begins with a decision by the partners or the general assembly, or by a Court ruling, through which a legal liquidator is appointed to manage the company's affairs throughout the liquidation period. The liquidator supervises the inventory of the company's assets and the repayment of its financial obligations according to the priorities of the creditors. The net remaining assets are then distributed to the partners or shareholders in proportion to their contributions.
Article (312) also stipulates that the liquidator shall notify all creditors of the commencement of company liquidation by registered letter or by publishing an announcement in two daily newspapers, with a grace period of not less than forty-five days for the submission of claims. After completing all procedures, the company shall be permanently removed from the commercial register and deemed legally dissolved.
What Does Liquidation Mean for a Company?
The company liquidation is defined as the stage following a company's legal dissolution. It aims to convert the company's assets into cash to pay off debts and distribute the surplus to partners. This procedure is considered an organized closure of the company's financial and legal status to preserve the rights of creditors and shareholders.
According to Article (307) of the Commercial Companies Law No. (11) of 2015, liquidation begins with the appointment of a legal liquidator to represent the company before third parties during the liquidation period, whose powers are precisely defined in the appointment decision. Article (312) specifies the procedures to be followed to notify creditors and submit their claims within a specified period, with the requirement to publish announcements in local newspapers.
Liquidation ends with the company being struck off the commercial register in accordance with Article (319), whereby it is considered completely dissolved and loses its legal personality. Liquidation is therefore the final stage in terminating the legal existence of a company in the State of Qatar.
Company Liquidation Cost
Liquidation of companies is a necessary step when company owners wish to end their commercial activities in a legal and organized manner. The purpose of liquidation is to settle all of the company's obligations before it is permanently removed from the commercial register, which guarantees the rights of all parties, whether the company owner, shareholders, or creditors and the cost of company liquidation is due to several factors, including:
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Fees: The basic fees for registering for the liquidation process start from 300 QR, according to the Ministry of Commerce and Industry.
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Lawyer or Legal Liquidator Fees: Fees depend on the size of the company and the nature of its activities. The liquidator or lawyer completes the paperwork needed to liquidate the company, follows up on the liquidation steps, and communicates with government agencies to officially complete the procedures.
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Employee Entitlements: This is one of the most important steps in the liquidation process, as all employee payments, including late salaries or end-of-service benefits, must be paid in accordance with Qatari law.
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Settlement of All Tax Clearance and Government Obligations by the Company: The company must settle any outstanding taxes and pay any fines or government fees that have not been paid previously.
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Termination of Contracts and Leases: To liquidate the company, the company must cancel all official licenses and permits and settle all leases and services registered in its name to ensure that all obligations are terminated before the final liquidation.
Types of Company Liquidation
Liquidation by Consent
Liquidation by consent is also referred to as “shareholder liquidation.” It is when shareholders of a company decide to end their business because of a lack of profits or the completion of projects, or because the company has achieved the purposes for which it was established.
Compulsory Liquidation
Compulsory liquidation is when a court decides to liquidate a company because of debts or negligence or failure to meet obligations.
Steps for Liquidation
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First Consultation: Checking the current status of the company and all documents.
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Shareholders' Decision: Preparing and implementing the liquidation decision.
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Legal Announcements: Publishing announcements in official newspapers.
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Settling Assets: Dealing with the company's assets and settling its liabilities.
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Government Permits: Getting all permits from the relevant authorities in a short time.
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Final Deregistration: Removing the company from the commercial register.
Company Liquidation Law
The company liquidation in Qatar is based on a structured legal system that aims to end companies' operations in a fair way to protect the rights of all parties, including shareholders, creditors, and employees. The Commercial Companies Law No. (11) of 2015 is the main reference that sets out the procedures for dissolving and liquidating companies. Part XIII of the Law is dedicated to regulating all stages of liquidation, from the issuance of the liquidation decision to cancel the company registration from the Commercial Register. The most important relevant legal articles are as follows:
Article 304
Upon dissolution, the company will be placed in liquidation and will maintain its legal personality during the liquidation period to the necessary extent. During this period, the words “in liquidation” shall be clearly added to the company's name.
Article 307
Liquidation shall be carried out by one or more liquidators appointed by the partners or the general assembly by the ordinary majority of the company's decisions.
If the liquidation is based on a court ruling, the competent court shall determine the method of liquidation and appoint the liquidator.
In all cases, the liquidator's work shall not end with the death, bankruptcy, insolvency, or incapacity of the partners, even if they were the ones who appointed him, and the liquidator shall be paid a salary as specified in his appointment document or as determined by the competent court.
Article 312 (amended by Law 8/2021)
All debts owed by the company shall become payable upon its dissolution, and the liquidator shall notify all the creditors by registered letter of the commencement of the liquidation and invite them to submit their claims.
The notice may be published in two local daily newspapers, at least one of which shall be in Arabic, and on the company's website, if applicable.
If the creditors are unknown or their nationality is unknown. In all cases, the notice to submit their claims for liquidation shall include a period of not less than forty-five days from the date of the notice for creditors to submit their claims, and the notice shall be republished twenty days after the date of its entry into force.
If some creditors do not submit their claims, the value of their debts shall be deposited with the treasury of the competent court until their owners appear or the debts lapse due to the statute of limitations.
Article 320
The liquidator shall be dismissed in the same manner in which he was appointed, and any decision or judgment to dismiss the liquidator or appoint a new liquidator must be included.
Why Choose Elite Projects to Liquidate Your Company?
At Elite Projects, we recognize that liquidating a company is not merely a legal procedure, but a delicate and sensitive stage in a company's life cycle. We have a team that combines legal expertise with administrative efficiency to ensure the liquidation process is carried out accurately and smoothly, without any complications in completing the procedures. Our most important features include:
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Full Legal Compliance: Our team has experience in following Qatari commercial company law.
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Experts in Company Liquidation: We have specialists in resolving and liquidating companies according to the law and regulations.
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Customer Support: We have a technical support team that provides customers with all updates at every stage of the process.
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Cost: We provide our customers with complete transparency of the costs at all stages of the liquidation process, with no hidden fees or unexpected costs.