Why Companies are being Liquidated in Dubai: While there lie a large number of opportunities in the booming Dubai, there are some companies that are forced into liquidation. It is because of some financial and legal reasons, or because of inadequate planning or some bad choices. In such cases, companies have to undergo a compulsory liquidation. Whereas, sometimes the company board comes to a mutual consensus and conducts a voluntary liquidation.

It is important to thoroughly do market research and see what you’re getting into before you start a business so you aren’t at the brink of liquidation. Reasons for liquidation also include not being able to fun day-to-day business activities and it is best to see those signs much beforehand and prevent the actual process. Here below are some logistic reasons why a business needs to be liquidated. An understanding of this will help you stay on par with your business situation.

Location Matters

The location of your business should be strategic, depending on who you want your market to be and where you want to function. With restrictions on operating in the free zone or mainland, one must choose the location with great detail to avoid any mess.

Planning Right

The planning process begins even before the incorporation. Staying ahead of yourself will help ensure you’re making the right decisions. Impulsive decision making without careful thought can put your business in a situation where you have no option but to liquidate.

Competent Workforce

The business owner himself cannot handle all the operations of the company, hence there is a need to hire a workforce. But now, he is also responsible and liable for the actions of the workforce and any damage or faltering from their part could do huge damage to the business. Therefore, while hiring it is important that you vet the potential candidate and remind him/her of the tasks and the gravity of it that they’ll be undertaking.

Skills of the Owner

While it may be important to hire a good, competent and knowledgeable staff, it is also important that the owner is skilled enough. Having financial, managerial and entrepreneurial skills are important. He/she should be able to take on any responsibility and notice mistakes made and have good eye for detail, overseeing all tasks.

Flow of Capital

Sometimes, business expenditure may exceed your expectations and you need more than you anticipated to keep business operations going. So you either have a reliable line of credit or stashed capital to take out for your operations. If the company goes into debt, it is required to be liquidated.

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