Liquidating your company on UAE Mainland

Lavin Nalinababu, Business Consultancy

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HLB HAMT - Accounting Firm in UAE

Phone:- +971 4 327 7775
Mobile:- +971 55 160 1291
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com

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    Liquidating your business in the UAE might seem like an easy process when compared to starting one. But this is just a misconception as liquidation process is quite complicated and the process usually takes 1-3 months depending on the jurisdiction and the activity. The process requires you to comply with numerous legal procedures. The government authorities concerned in the UAE should be notified about the liquidation of your firm and licenses must be cancelled.

    Here we will discuss in detail on the steps involved in the liquidation of your company on UAE mainland.

    Cancelling your business license
    This is one of the primary steps when it comes to liquidating a company in UAE, as it will inform government entities that you are no longer in business. Hence, unnecessary fines and penalties won’t be incurred on the license, which is usually the case if license is not renewed on time.

    In the case of a shareholding company, discharging the liabilities towards creditors and partners is mandatory.

    Formalities for cancelling your business license
    The procedure for cancelling a license is different for sole proprietorship (single shareholder companies), and companies with multiple shareholders. In the case of the former, cancellation must be applied via licensing authority and required clearances must be obtained from  various departments depending on the activity;

    • Ministry of Human Resources and Emiratisation
    • Directorate of Residency and Foreigners Affairs
    • The relevant water and electricity authority
    • The leasing entity
    • Customs
    • Federal tax authority

    Whereas, companies with shares need to liquidate their shares, collect the debts and pay creditors, prior to finalising with LICENSING AUTHORITY .Any company in UAE need to appoint a liquidator to carry out the liquidation process

    Steps to dissolve all kinds of companies 

    The process begins with preparing notarised minutes of the general assembly that confirms the company liquidation and the appointment of a liquidator. The next step requires you to arrange an official letter by a registered liquidator accepting his responsibilities.

    A form must be filled via licensing authority LICENSING AUTHORITY or other approved channels to apply for cancellation, following which a liquidation certificate will be issued by the licensing authority. You will have to publish the notice of liquidation in two local newspapers, which gives the debtors a grace period of 45 days to submit their claims.

    The next stage involves the following steps;

    • Submitting a declaration letter from the liquidator and the partners to LICENSING AUTHORITY . This is to ensure there isn’t any sort of objection from any parties during the grace period.
    • Getting necessary approvals from certain government departments and cancelling the firm establishment card at Ministry of Human Resources and Emiratisation. The visas of foreign partners sponsored by the company must also be cancelled at the respective General Directorate of Residency & Foreigners Affairs.
    • All the documents should be submitted to get approval for cancellation and for this, a fee stipulated by LICENSING AUTHORITY must be paid.

    One will be granted with the certificate of deregistration upon payment of fees.

    Another option, other than terminating your license, is to freeze the same. But this is applicable only if you plan to close your business for a short period of time and not permanently. Freezing of trade license is allowed for a period of three years and one need to pay certain amount of fee for this.

    In the case of civil works company, the notary public must authenticate a partnership cancellation. For sole proprietorship companies, a no objection letter must be obtained from the Ministry of Human Resources and Emiratisation, in addition to a residence cancellation proof for non-Gulf nationals.

    There are many who don’t bother to follow the procedures while planning to liquidate their company in UAE. This might not just get you into legal trouble, but will also affect any future plans to setup a company in the country.

     
    Did you find the blog informative?         

     

    Varun R Chandra
    Varun R Chandra
    07:38 25 Apr 21
    HLB Hamt is highly recommended! They have the quality of services that would satisfy your needs. I'm glad I found them.
    Giuseppe Assi
    Giuseppe Assi
    06:20 31 Jan 21
    I HAD A GOOD EXPERIENCE WITH HLB HAMT DUBAI. THEY HAVE A VERY PROFESSIONAL TEAM, GOOD QUALITY OF SERVICES, GOOD VALUE... FOR PRICE.I RECOMMEND THIS COMPANY.read more
    Mohamed Sheriff
    Mohamed Sheriff
    16:16 28 Jun 20
    Experience with HLB Hamt in audit experience is great pleasure. They deploy well qualified accounts team for audits.... And the amount of checking they perform give the management of the company confidence that internal controls are well in place. We are glad to see they have high standard of audit practices.read more
    218141 JOSEPH THOMAS
    218141 JOSEPH THOMAS
    16:20 23 Jun 20
    Professionally managed firm with commitment to the engagements taken. My company and its group are assigning our... requirements for last 12 years to HLB and we don’t have any negative remarks on any assignments.read more
    PMI
    PMI
    07:14 23 Jun 20
    In my opinion, HLB Hamt is one of the best professional firms in UAE after big4. Excellent client service, professional... and competent staff and timely delivery are their strength. Over the years they have developed the infrastructure and skill set to handle multiple verticals ie, audit, tax services, consulting, IT support etc.Wishing HLB Hamt team all the very best.read more
    RAVI CHOKSI
    RAVI CHOKSI
    08:28 21 Jun 20
    Thank you Team HLB hamt...Your internal auditing team put the good amount of time and inputs in helping the... organisation making considerable improvements throughout the organisational working structure and helps in building the better business.Thanks.read more
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    Maharajan Subramaniam
    18:17 06 Jun 20
    High-Performing IT Teams, I'm impressed with the knowledge level of their deputed staff, audit procedures, and... checklist adopted. Mr. Vimal especially understand the requirement and provide solution not only technical feasibility and also considered budgeting. We’re confident in their abilities.read more
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    Mohammed L
    08:07 05 Jun 20
    We have been working closely with them on payroll services for quite sometime.They provide very professional... services,experts in domain and excellent support. Would recommend them.Cheers.read more
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    ROY ROSHAN VIVIAN
    06:32 04 Jun 20
    Very professional team. Vimal has always given us good solution advice for various Software and IT Infra projects. We... are very Extremely satisfied working with him and his team. Wishing them success.read more
    Basil Daniells
    Basil Daniells
    05:55 03 Jun 20
    I have worked with HLB as a partner of Sage for about 2 years, they were dedicated to the success of the partnership... and kept aligned with the business plan that was agreed between our two companies. They are always ready to go the extra mile for a customer and don’t shy away from challenging circumstances. Keep up the good work and wish you all the success in the future.read more
    Amar Kashyap
    Amar Kashyap
    19:28 02 Jun 20
    Team of well qualified and organised professionals. Their reports are not based on numbers first they will understand... their client and their business. They are highly recommended and trust worthy.read more
    Radz de Jesus
    Radz de Jesus
    16:03 02 Jun 20
    We're glad to have found HLB Hamt to conduct the IT audit and risk assessment for our organization. We have learned a... lot from their team during that first project. And since then, we've continued to be in touch with them. Mr. Vimal especially is very good at presenting technical concepts in simple yet interesting ways that non-IT and business people alike would easily catch. We are very happy with the professionalism and quality of service they provide. They leave their clients nothing short of satisfied. Highly recommended.read more
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