The UAE is a thriving business region with numerous business hubs and free zones that encourage commercial activity. Companies and investors from around the world come here to establish businesses and pursue opportunities. New businesses are constantly being formed in such an advantageous location.
A company’s survival and success are determined by a variety of factors. Many businesses fail as a result of their inability to keep up with these factors. A failing company can quickly become a liability for its owner. In UAE it’s not easy to walk away from the falling business, there is a formal procedure for closing a company, just as there is for forming one. This is known as liquidation, and it is very important in the UAE.
Company Liquidation in UAE
Liquidation means winding up a business. A company can become insolvent by going through a process called Company Liquidation, in which its assets are assessed and liquidated to pay off any obligations it may have. The liquidation process in the UAE can also be complicated because there are numerous authorities, each with its own set of rules for liquidation.
In UAE there are two types of Liquidations:
When Business owners are not interested to run the business or unable to run business. They jointly take a decision to move out of business.
In this case, the Licensing authority or UAE court orders to liquidate the company, when the company does something wrong which is not permitted in their line of business.
Documents required for the liquidation of a company in Dubai
It is mandatory to submit documents and information for the liquidation of the company. The requirements are nearly identical for companies established on the mainland and in free zones. Our qualified team offers the best company liquidation services in Dubai and prepares all documentation in accordance with UAE laws.
- Copy of your business license. If your business license has expired, you will have to get it renewed before you can begin the process
- AOA/MOA (Memorandum of Association) with a copy of any changes that have been made
- Share Certificate
- Power of Attorney (if the owner/shareholders are outside the country)
- Copies of all shareholder’s passports
- Copies of emirates ID
- Shareholders’ Resolution
- Deregistration application form
Procedures for liquidation processes in the UAE
The seven steps involved in the dissolution of enterprises under the Dubai Development Authority (DDA), formerly known as the Dubai Creative Clusters Authority, are listed below
Step 1- One month before the liquidation, the firm must notify the DDA free zone authority of the reason for the entity’s closure.
Step 2- A board decision (or shareholder resolution in the case of FZE/FZCO) must be attested in front of free zone officials in order to de-register.
Step 3- All keys and transponders for the office must be returned to the company (It is not applicable for the companies in Leasehold or Freehold).
Step 4- The corporation is required to provide a copy of the new print advertisement in both English and Arabic.
Step 5- Original company license, certificate of incorporation, share certificates, leasing agreement, and original Department of Economic Development license (if it is issued through DDA).
Step 6- Various agencies must provide the following permissions: Customs clearance from the Dubai Customs Department\sDDA Finance Department approval, approval from the DDA Government Services Department, DDA IT Section approval, etc.
Step 7- The liquidation report must be prepared by an approved Auditor registered in UAE.
Company Liquidation in Free Zones
There are various free zones in the UAE, and each has its own set of procedures to follow when liquidating a company in the UAE Free Zone, but almost all free zones have the same set of procedures for Company Liquidation. The following are the basic requirements for Free Zone Company Liquidation:
- The Board’s Resolution is required to liquidate the Company in free zones.
- Only registered and approved liquidators in the UAE must be appointed to liquidate a company in a free zone.
- All the visas of employees should be cancelled and cleared while liquidating a company in a free zone.
- A liquidation letter has to be submitted only to a registered and approved auditor for free zones in the UAE.
- Clearance Certificate from free zone authority.
- No Objection Certificate from the Business Unit.
- Clearance Certificate from CLD Government section.
- All fees/charges/expenses are to be settled within that particular free zone in the UAE.
How Elevate is different from others:
As experienced Auditors & Liquidators, we know the finance linkage of any company from any domain. This understanding helps us to outline the Company closer process easily. Elevate has liquidated many companies those were Limited Liabilities Companies, Free zone Company & Off Shore Companies. We help Business Owners to move out of business legally and smoothly.
As a Liquidator our projected role to
- Drafting the Board Resolution
- Publishing Advertisement in English and Arabic News Paper
- Settling with Employees
- Settling with the Debtors/suppliers
- Visa Cancellation
- Bank Account Closing
- Obtaining NOC from Dewa, NOC from Local telecom Company & Custom
- Registered Tenancy Agreement Cancellation
- De-Register with FTA
- Preparation of the Liquidator’s Report
- Submission of the final Report to the Authority to get the De-Registration