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Liquidation and De-registration Services

In the dynamic world of business, decisions often lead us down unforeseen paths. For those who have determined that it’s time to bring their entrepreneurial journey to a close in the United Arab Emirates (UAE), a crucial step awaits—the liquidation of your business. Whether you’re an establishment, sole proprietorship, or a company with shares, the process of formalizing your exit from the business landscape is essential, and we’re here to guide you through it.

  • The Importance of Closure

Closing a business in the UAE goes beyond the mere act of shutting down operations. It’s a formal process that carries legal and financial implications. When you’ve made the decision to cease your business activities, it is imperative to cancel your business license and all related permits associated with it. This action serves as a notification to relevant government entities that you are no longer in operation, helping you avoid any accumulated fines and penalties that may be incurred if your license is not renewed upon its expiry date.

For shareholders in a company, liquidation also holds the key to discharging liabilities towards creditors and partners while protecting your interests and shares. Moreover, it allows you to preserve your goodwill and business reputation should you decide to embark on a new entrepreneurial venture in the future.

  • Formalities of License Cancellation

The process of canceling your business license depends on the legal structure of your company. For establishments and sole proprietorships, it’s relatively straightforward. You need to apply for cancellation through the Department of Economic Development (DED) and obtain the necessary clearances from various authorities, including the Ministry of Human Resources and Emiratization, Directorate of Residency and Foreigners Affairs, and relevant utility providers.

However, for companies with shares, the process is more intricate. It involves liquidating shares, settling debts, and paying creditors before finalizing the cancellation with DED.

Companies Requiring a Liquidator

Certain company types necessitate the appointment of a liquidator. These include:

  • General Partnership
  • Limited Liability Company
  • Simple Limited Partnership
  • Public Joint Stock Company
  • Private Joint Stock Company

The Liquidation Process: A Two-Stage Journey

Dissolving a company, with the exception of civil companies, typically entails a two-stage process:

Stage 1:

  1. Prepare a notarized minutes of the general assembly confirming the company’s liquidation and appointing a liquidator.
  2. Arrange an official letter from a registered liquidator accepting the duty.
  3. Apply for cancellation by submitting the required form through DED or other approved channels.
  4. DED will issue a liquidation certificate.
  5. Publish a notice of liquidation in two local newspapers.
  6. The notice provides debtors with a grace period of 45 days from the date of issue to submit their claims.

Stage 2:

  1. Submit to DED a declaration letter from the liquidator and the partners, indicating no objection from any other parties during the grace period.
  2. Obtain necessary approvals from other government bodies for license cancellation.
  3. Cancel the firm card at the Ministry of Human Resources and Emiratization.
  4. Cancel the visas of foreign partners sponsored by the company at the respective General Directorate of Residency & Foreigners Affairs.
  5. Submit all required documents to secure approval for the final cancellation.
  6. DED will determine the fees.
  7. You will receive the certificate of deregistration (cancellation) upon payment of the requested fees.
  8. Freezing a Trade License

It’s important to note that freezing a license is distinct from terminating it entirely. In Dubai, businesses have the option to keep their trade licenses inactive for up to three years by paying a specific freezing fee. However, extension beyond this period is not permitted.

In conclusion, navigating the intricacies of business closure in the UAE is a journey best undertaken with professional guidance. Liquidation and de-registration services are pivotal in ensuring a smooth and legally compliant exit from the business landscape. Contact us today to explore how our expertise can be your trusted companion on this path to closure, safeguarding your interests and preserving your reputation.