Liquidation Of Companies In The United Arab Emirates
Winding up a business is a hectic task. Winding up a business is more than just closing a business. There are many factors to consider when winding up a business. Notification to public authorities, revocation of business licenses, distribution of assets – the list is endless. The legal procedures involved in winding up a business are among the most onerous.
What is the liquidation of a company?
Company liquidation is a legal insolvency procedure that ends a company’s activities. When a Company Liquidation Services In Dubai, its assets sold to pay its debts, liabilities, and obligations. In liquidation, sometimes called winding-up, the company’s trading licenses suspended, its name is removed from the trade register and the company deemed to have ceased trading.
There are several possible causes of liquidation, the most important of which are
When the authorization/period stipulate in the company’s articles of association expires or when the purpose for which the company established is achieved.
Loss of all or a substantial part of the company’s assets.
Merger.
The approval of the shareholders to terminate the existence of the company by an established majority, e.g.
If a company is unable to pay its debts, it wound up voluntarily or by order of the authorities. Under UAE law, there are two types of liquidation of a company
Voluntary liquidation
A company voluntarily wound up for several reasons, including the expiry of a term.
cessation of the company’s objects, abandonment of its objects, merger with another company, continuing financial difficulties or inability to pay the company’s debts.
Compulsory or statutory winding-up
Compulsory liquidation of a company is a necessary step taken when a company is in serious breach of the law or is unable to continue its business activities. It also takes effect when a customer files a claim with the public authorities to recover assets. The local authorities then take steps to wind up the company.
Who is the liquidator?
The person responsible for carrying out the winding-up procedure called the liquidator. Liquidators appointed by the court or by the company’s shareholders, depending on the type of liquidation. Once a liquidator appointed, a formal approval form is submitted. Once they have carried out all their duties, they prepare the necessary statements and the liquidator’s report for use in the winding-up procedure.
Revocation of licenses
Revocation of a license is one of the most important steps in the winding-up procedure and the procedure varies according to the type of company. If the company is a firm or a sole trader, the cancellation applied for via the DED. Approval obtained from the following departments
Department responsible for human resources development and Emiratization
Department for Residence Permits and Aliens
The competent water and electricity authorities.
Leasing companies
What are the seven steps in liquidating a limited liability company in Dubai, UAE?
1: The first step in liquidating a company is to file a notice with the Dubai Development Authority (DDA) stating the reasons for the liquidation.
2: The Commission’s decision to cancel the registration must be certified by the owners to the DDA authorities.
3: An announcement of the liquidation of the company published in newspapers in Arabic and English.
4: Company license, company certificate, and share certificates, lease contract.
and original license from the Department of Economic Development (DED) submitted to the DDA.
5: DED grants a 45-day waiting period if a creditor or business partner has a financial claim against the company. It also cancels all visas for employees and partners and obtains a NOC from the Department of Labor.
6: After the termination period, a liquidation report prepared by an accountant in Dubai.
7: Send the completed report with all supporting documents and the applicable cancellation fees to the relevant authorities.
who will assess it and, if approved, issue a “Certificate of Cancellation of License”.
What are the six steps for canceling a free zone?
in the United Arab Emirates?
Almost all free zones have their own procedure for liquidating companies. The most standard and common procedure for liquidating a free zone company in the UAE is as follows:
1: Minutes of the board meeting declaring the company in liquidation and appointing a liquidator AND sending a notification to the Dubai Development Authority (DDA) explaining the reasons why the company is being liquidated.
2: Letter from the register liquidator stating that he/she assumes responsibility for the liquidation of the company, along with the fees sent to the relevant free zone authorities.
3: Publication of an advertisement in newspapers regarding the liquidation of the company, in Arabic and English.
4: The free zone authority grants a waiting period of 45 days to creditors or customers who have financial claims on the company.
5: Once the notice period expires.
the liquidation report prepared by an accountant in Dubai and also obtain the approval certificates from the free zone authority (FZE/FZCo).
6: Cancel all employee and partner visas.
obtain the NOC from the Ministry of Labor and Immigration and send all documents to the Free Zone Authority, which will issue a final clearance certificate after reviewing all documents.
There are some things you need to be aware of when you decide to liquidate a business. It would be wise to entrust this task to a professional who provides business liquidation services.
How can Bestaxca Consultants help with business liquidation in the UAE?
Bestaxca Consultants has been providing business liquidation services for over a decade. As one of the best liquidators in Dubai, we make sure to help you throughout the business liquidation process. The business liquidation process mainly involves legal formalities and without the support of a liquidation service provider, it can be tedious and time-consuming. Our team of business liquidation experts will guide you through the process. We can help you both as a liquidator and as a liquidation service provider.
The cancellation of licenses and seeking approval from various government agencies handled by our professionals and will allow you to receive the liquidation report in a timely manner. License cancellation, publication in at least two newspapers of the company liquidation, submission of reporting documents to the Department of Economic Development (DED), obtaining letters of objection from partners, cancellation of partner’s visas, and liquidation of assets, all done by Bestaxca Consultants. We offer business liquidation services all over the country and we aim to facilitate our clients with our expertise.
Due to our extensive experience in offering business liquidation services, we have been able to maintain our relationships with the authorities and government agencies, which will make things easier.
If you are looking for corporate liquidation services in Dubai or a liquidator, contact us today.
