Liquidation of a business is an activity that will put an end to a company’s operation and its life.
Closing a business on the Mainland
Regardless of what sort of company you own in the UAE, you must cancel your company license and all associated licenses when you decide to close it down.
Checklist before liquidating your company in the UAE
- Settling down all utility bills
- Paying off Telecommunication Bills
- Closure of Bank Accounts
- Preparing the Final Audit Report
- Cancellation of all the visa under the license
Cancelling the license is a requirement upon business closure
Knowing that you are no longer in the company is essential for relevant government entities so that you will prevent any accumulated fines and penalties imposed on your license if it is not renewed on the expiry date.
It is essential to discharge your liabilities to creditors and associates and safeguard your interests and shares if you are in a shareholding company.
It is also wise to bring your goodwill and business reputation in perspective, if you decide to reopen a company.
Formalities for cancelling your business license
Cancelling the license depends on the form of your company. For establishments and sole proprietorships, the process is simple because all you need to do is to apply for cancellation through DED and acquire all relevant clearances from:
- Ministry of Human Resources and Emiratisation
- Directorate of Residency and Foreigners Affairs
- the relevant water and electricity authority
- the leasing entity etc.
However, for companies with shares, the process is longer because it requires liquidating the shares, collecting the debts and paying the creditors’ before finalizing with DED.
Companies which require a liquidator
You need to appoint a liquidator if the legal form of your company is one of these:
- General Partnership
- Limited Liability Company
- Simple Limited Partnership
- Public Joint Stock Company
- Private Joint Stock Company
Freezing a trade license
Freezing a license is different than terminating a license completely.
Companies in Dubai can keep their trade licenses inactive by paying a certain freezing fee for three years. They cannot, however, stretch it beyond that particular period.
The documents required initially for Liquation of Company in the UAE
- License Copy
- Memorandum of Association Copy with all the changes
- Power of Attorney if any
- Shareholders Resolution
- Shareholders passport Copy
- Emirates ID Copy
- Deregistration Application Form
Liquidating a business in the UAE can be challenging throughout the process, and it is also a step-wise method in which time is gradually consumed.
We at PMC Solutions DMCC can guide and support you to complete all the legal formalities and procedures to liquidate your company in the UAE.
For more details log on to www.pmcsolutions.me or contact us at +971 588 631 656 or email at firstname.lastname@example.org