Dh34m in debts, no assets left: Dubai court dissolves transport company

Dubai: The Dubai Commercial Court has ordered the dissolution and liquidation of a land transport company after finding that its capital had been fully eroded and its liabilities had climbed to nearly Dh34 million, leaving it unable to continue operating.

The ruling followed a lawsuit filed by one of the company’s partners, who argued that mounting losses had effectively paralysed the business. According to Al Khaleej newspaper, the firm had ceased operations altogether, with financial obligations far exceeding the capital stated in its founding contract.

To determine the company’s true financial position, the court appointed an independent accounting expert to review its records, assets and liabilities. The expert’s report concluded that the company was no longer active, held no real estate, movable assets or cash reserves, and had accumulated losses that had wiped out its capital entirely. Its financial position, the report said, was deeply negative.

After reviewing the findings in open court, and in the absence of the other defendants, the court ruled that the company could not realistically resume its business activities. It ordered the firm to be dissolved and placed into liquidation, citing provisions of the UAE Commercial Companies Law that allow for judicial dissolution when losses reach a level that makes continuation impossible.

The court also appointed a liquidator to oversee the winding-up process. The liquidator has been tasked with registering the court’s decision in the commercial register, taking custody of the company’s books and records, inventorying any remaining rights or obligations, and notifying creditors to submit their claims within the legally prescribed period. Public notices of the liquidation are to be published in two local daily newspapers, one of them in Arabic.

Any movable assets identified during the process are to be sold at public auction, with the proceeds distributed to creditors in line with legal priority. The liquidator must submit periodic reports to the court before the company is formally struck off the commercial register at the conclusion of the liquidation.