Everything You Need to Know About Company Liquidation in UAE
Everyone makes huge plans and forecasts when it comes to opening a business. There are myriad brainstorming sessions, business plans, and goals set up. However, there are not many people who anticipate the de-registration and liquidation of their business.
There are many reasons for needing to close a business. Some are voluntary, and some are mandated by a third party, such as the government, bank, or creditors. However, no matter what the reason is, it is important that you have all the facts when it comes to company liquidation in Dubai.
That is why we have put together this guide for company liquidation in the UAE. This way, you can avoid any legal complications and quickly dismantle your operations without a hitch!
What is Company Deregistration and Liquidation in UAE?
Is its simplest form, liquidation refers to closing a business. It is a solvency process in which a company’s assets are valued and sold off to clear any debts that it may have. Larger companies may have a more complex liquidation process due to the larger amounts of debts and assets to calculate for.
There are two major types of liquidation in UAE: mandatory and voluntary. Mandatory liquidation occurs when a company is forcibly dissolved in order to pay off debts. On the other hand, voluntary liquidation occurs when the closure of a business is not imposed upon by a third party. It is a decision taken by the company to clear its debts.
Process of Company Liquidation in Dubai
If you are planning on shutting down your business in the UAE, you may be confused as to where to start. Luckily, the Emirates government has a clear-cut, defined process to help companies with de-registration and liquidation.
Here is a quick overview of the steps involved in the business liquidation process:
- Submit the notice of closure to the DED (for mainland businesses), or the relevant free zone authority. The notice should state the reason for closure.
- Apply for cancellation by filling the required form through DED or other approved channels.
- DED will issue a liquidation certificate.
- Submit to DED a declaration letter from the liquidator and the partners indicating no objection from any other parties during the grace period.
- Collect required approvals of other government bodies to cancel a license.
- Cancel the firm card at Ministry of Human Resources and Emiratization.
- Submit all required documents to get the approval for final cancellation
- Submit the required cancellation fees in order to successfully liquidate your business
As part of the process, you will be required to submit paperwork and specific documentation. Here is a breakdown of the documents that you will be obligated to provide:
- ‘Notarized Board Resolution’ to liquidate
- A letter from the appointed liquidator accepting the position
- Registration & Licensing Application (Form No. BR/1) from the Economic Department of the Emirates
- Company’s Original License and legal documents
- Release letter from the property owner
- NOC letters from the ministry of labor & immigration and RTA
- No liability and bank account closure certificate
- Resolutions by shareholders to dissolve the businesses from the Public Notary
- Letter of Company Dissolution by the Economic Development Department (EDD)
- Official notice of liquidation printed in 2 local newspapers within 45 days of receiving the official liquidation certificate
De-Registering Your Dubai-Based Company
De-registration is a word that you will hear used frequently when talking about liquidating your company. It involves the official process of revoking your business license in Dubai and signifies the official cancellation of your business operations. It involves:
- Resolution to be issued by the company approving the cancellation of the license
- Clearances issued by the relevant authorities
- Cancellation of the Memorandum of Association.
The Best Company Liquidation Services in Dubai, UAE
The amount of stress that can be involved in closing a business can only be understood by someone who has gone through the process. And here at Blue Kryon Consulting, we have helped numerous people successfully and smoothly shut down their business operations.
We believe in making the de-registration and liquidation process as stress-free as possible! Contact us today for a free consultation on how to get started!
