- May 28, 2020
- Posted by: Aswani
- Category: Blog
Starting a business in UAE is not a daunting task anymore with numerous experienced business consultants at your service. Let your requirement and location be any, these business consultancies in UAE will have the expertise to customize their services according to your specific needs. But not many can assist you on liquidating your company, once you plan to shut down your business. Here we will guide you through the company liquidation in Dubai and UAE mainland.
A company is liquidated in the UAE either compulsorily or voluntarily and it involves plenty of procedures, which should be taken care of with extreme care. Regardless of the type of business you do in the country, all business licenses and related permits associated with it must be cancelled once you make up your mind to liquidate your company in the UAE.
Cancelling license is of utmost importance, as it will inform the government authorities about the closure of your business and helps in avoiding getting penalized, once you stop renewing your license. People in a shareholding company should see to it that all liabilities towards creditors and partners are discharged.
Cancellation of business license in UAE depends on the form of company you own. Establishments and partnerships need to apply for cancellation via DED and get clearances from the following departments;
Ministry of Human Resources and Emiratisation
Directorate of Residency and Foreigners Affairs
The relevant water and electricity authority
The leasing entity etc.
In the case of companies with shares, the process is not that simple. It involves formalities that include liquidating the shares, collecting the debts and paying the creditors, prior to finalising with DED.
Companies which require a liquidator
A liquidator is mandatory if your company falls in any of the below legal forms;
Simple Limited Partnership
Public Joint Stock Company
Private Joint Stock Company
Steps involved in dissolving companies
The process involves two stages:
Notarised minutes of the general assembly that authorizes the liquidation of the company and the appointment of a liquidator must be prepared.
An official letter by a registered liquidator willing to accept the duty must be attained.
Filling the required form for cancellation through DED or other accepted channels.
Following this, DED will issue a liquidation certificate. The notice of liquidation must be published in two local newspapers, which gives debtors a grace period of 45 days to submit their claims.
Stage 2: Involves the following steps;
Submitting a no objection declaration letter to DED from the liquidator and the partners
Getting approvals from other government bodies
Cancelling the firm card at Ministry of Human Resources and Emiratisation and the visas of foreign partners sponsored by the company at the respective General Directorate of Residency & Foreigners Affairs
Upon submitting the documents and paying the requested fees, you can receive the certificate of deregistration (cancellation).
When you have made the decision to liquidate your company, it is always advisable to do it the right way. Failure to fulfil the formalities will not only land you in trouble, but it can affect any plans of starting a business in UAE again.