The United Arab Emirates (UAE) has become one of the most preferred locations for entrepreneurs and investors to launch their businesses. However, sustaining and maintaining continuous growth of a business in such a dynamic and competitive market can be challenging. Such challenges, along with other unforeseen circumstances, often leads to the liquidation of a company in UAE.
Liquidation refers to the winding up of a business and redistribution of its assets to clear the debts. There are two types of liquidation: voluntary and compulsory, both of which must be carried out by a court-certified liquidator in UAE. Whatever the reason might be, understanding the process of company liquidation in UAE is essential for ensuring a smooth and compliant closure of your business. Let us have a look at the process of liquidation of a company in UAE.
Back to topCompany Liquidation Process in UAE
You must follow these steps for a successful liquidation of a company in UAE -
Step 1 - Inform all creditors about company liquidation for your business setup in UAE. Creditors can issue a claim for any outstanding payments.
Step 2 - Issue a public notice of company liquidation in a local newspaper and on your company’s website.
Step 3 - Hire a court-certified liquidator in UAE and avail of the acceptance letter.
Step 4 - Apply for license, visa and permit cancellation from the relevant authorities.
Step 5 - You must initiate the asset liquidation process by selling assets, investments and more.
Step 6 - Settle all the applicable employee dues such as salary, gratuity and more.
Step 7 - Draft the shareholder's resolution of dissolution. Some mainland companies require attestation by the Public Notary and the Ministry of Foreign Affairs.
Step 8 - Submit the application and other necessary documents, along with the dissolution letter, to the relevant authority in the UAE.
Step 9 - You will then receive the transitional liquidation certificate.
Step 10 - Serve the 45-day notice period. During this period, you can apply for work permit cancellation and clearance letters from the utility department and Road and Transport Authority (RTA), among others.
Step 11 - Submit a liquidation report to the relevant authorities and avail the License Cancellation Certificate.
Step 13 - Pay the requisite fees to complete the process.
Back to topDocuments Required for Company Liquidation in UAE
To liquidate your company, you will need to submit certain business-related documents along with the application. Some of which include copies of trade license, clearance certificates, liquidation letters, no objection certificates, copies of the Memorandum of Association (MoA), and board resolutions, among others.
Back to topHow can Commitbiz Assist You?
Commitbiz, a leading business management consultancy, provides quality services, whether for company liquidation or incorporation. Our team has assisted various businesses during the liquidation process and can guarantee a smooth and successful business closure. Through our company liquidation services, we ensure our client’s needs are understood thoroughly and provide guidance at every stage of the process. Contact us to liquidate your company.
Back to topIs it mandatory for a company to issue a public announcement regarding the liquidation?
Yes, it is compulsory to publish an advertisement or a notice in two local newspapers, one of which should be in Arabic.
What is the notice period duration for the liquidation of a company?
The notice period for the liquidation of a company is 45 days, depending on the jurisdiction.
What are the necessary clearances required before dissolving a company in the UAE?
The company needs to get clearances from the Customs Department, Dubai Development Authority’s (DDA) IT Department, DDA’s Government Services Department, and facilities management clearance, among others.
What happens to employee visas and work permits during the liquidation process?
All the employee visas and work permits are cancelled before the completion of the company liquidation process.
