Judicial principles and studies
Company Liquidation, Employee Rights, Liquidator as Defendant, Effect of Acknowledgment
The study summarizes rules for creditors’ claims during liquidation and the impact on employee claims, explains when suing the liquidator is proper or unfounded, and addresses the effect of an acknowledgement-and-undertaking instrument.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The points set out rules for filing creditors’ claims in voluntary liquidation under Article 264 of the Companies Law (as applied to LLCs by Article 76), the relation between liquidation procedures and employee claims under Article 138(b) of the Labor Law, and the legal effects of suing the liquidator and of an acknowledgement-and-undertaking instrument.
Summary
- Creditors must submit claims to the liquidator, whether due or not, within two months for residents and three months for non-residents from the publication of the liquidation notice; the liquidator or the court may extend by up to three additional months for a valid excuse. - Late claims may still be presented but are ranked after claims filed within the statutory periods. - The periods in Article 264 are not peremptory or statutes of limitation that bar litigation; liquidation procedures do not displace the labor-law limitation (two years from the cause of claim under Article 138(b)). - A sole partner’s signature on an acknowledgment-and-undertaking to satisfy current and future obligations renders him a proper defendant even if he was not a partner during the employee’s tenure. - Once the company’s legal personality ends with completion of liquidation and the liquidator’s mandate expires, suing the liquidator is not legally founded and such joinder should be dismissed.
Practical significance
- Creditors should file claims within the prescribed windows to preserve priority, while employees retain the ability to bring labor claims before competent courts subject to their specific limitation period. - An acknowledgment-and-undertaking can create a party that may be properly sued for company obligations. - Claims against a liquidator after the company’s formal dissolution risk dismissal for lack of proper adversary. This content is a general educational summary and is not a judicial text or legal advice.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.