The UAE has a set of regulations and rules when it comes to the business sector. Any businessman in the country knows the high importance of abiding by the regulations in order not to be subjected to any fines or penalties. This even applies to when you are closing down your business in the UAE. If you are closing your business in any city in the UAE, it is of high importance to notify the government entities that your company is closing to avoid any financial penalties such as fines upon license expiry.
As the procedure might be long and complicated, here we explain what documents you need for your company liquidation and the steps you should follow.
Closing a business, which is also known as Company Liquidation, has 2 types: voluntary or compulsory. A creditor’s voluntary liquidation refers to when business owners decide voluntarily to end their business. In this case, a liquidator is appointed after a meeting is held by the company’s shareholders. A compulsory liquidation refers to when the liquidation is commenced by court order. This is a procedure where the creditors of the company request for dissolution of the company and the assets of the company are distributed among the creditors and the company is dissolved.
Requirements and Procedures for Company Liquidation:
In order to cancel an existing company, you will need the following documents:
In Case of a Mainland Company:
Notarized minutes of the meeting held by shareholders confirming company liquidation and appointment of liquidator.
An official letter by the appointed and licensed liquidator accepting the duty.
Application document from DED to apply for cancellation.
Receive liquidation certificate form DED.
Publish notice of liquidation in two local newspapers, (after receiving primary liquidation certificate)
Notice Period: After the issue date, a notice period of 45 days is given to debtors to submit their claims regarding company liquidation.
Procedures after Notice Period:
After the notice period, you will be required to submit the following documents:
Declaration letter to the DED indicating that there is no objection from any parties regarding liquidation, (letter to be submitted by liquidator and partners).
Approvals from other government entities for license cancellation.
Cancellation of firm card at Ministry of Human Resources and Emiratisation.
Cancellation of Foreign partner visas sponsored by the company.
Pay fees determined by DED.
In Case of a Free Zone Company:
In case of a free zone company, the procedures are different. You will need to notify the free zone authority:
Apply for closing business through member portal.
Submit company termination application.
Publish an announcement in one local newspaper, (after processing of application).
After submission of the above documents, DMCC will file a final termination and a company termination letter.
Cancellation of Employees Visas:
Cancellation of employees’ visas is also a requirement for company liquidation. According to the UAE Labor Law, you are required to give your employees a two-month notice period before terminating their contracts.
Company liquidation can be very complicated. Global Link offers its services regarding closing a business. Contact us if you are looking for any advice or assistance.