Liquidation is a formal procedure which involves the closing down of a company by an appointed insolvency practitioner. Businesses must cancel their license and all related permits before winding up their operations, irrespective of the type of company. Liquidation in UAE Mainland may not be easy process as it involves numerous paperwork and association with different organizations. A consultancy firm can make the procedure easy and hassle-free for you. HLB HAMT has been in the business for a while and can assist clients to liquidate their company in UAE Mainland, without any issues.
Formalities for cancelling Business License in UAE Mainland
Cancelling business license in UAE Mainland is mandatory as the relevant government authorities must be aware of it; otherwise, it can lead to files and penalties getting accumulated.
Cancelling business license in UAE is dependent on the type of firm; in the case of establishments and sole proprietorships, the process is simple. The application for cancellation must be made via DED and clearances must be obtained from;
The process takes more time for entities with shares, as it requires liquidating the shares, collecting the debts and settling the creditors, prior to finalising with DED.
Companies which
require a Liquidator
A liquidator is mandatory for the below-given forms of companies;
- General Partnership
- Limited Liability Company
- Simple Limited Partnership
- Public Joint Stock Company
- Private Joint Stock Company
Private shareholding companies in UAE should obtain approval from the Ministry of Economy and public shareholding companies must take approval from the Securities and Commodities Authority. Sole proprietorships must obtain a no-objection letter from the Ministry of Human Resources and Emiratization along with residence cancellation proof for non-Gulf nationals.
The liquidation process for UAE mainland companies involves two stages:
Stage 1
- Prepare notarized minutes of the general assembly mentioning about the closure of the entity and the appointment of a liquidator to carry out the process.
- Get an official letter by a registered liquidator accepting his responsibility as the liquidator.
- Fill the cancellation form.
- Obtain the liquidation certificate from DED.
- Inform the decision to liquidate via notice in two local newspapers. The notice provides debtors with a 45-day grace period to submit their claims.
Stage 2
- Obtain a declaration letter from the liquidator and the partners stating there are nil objections from any other parties during the grace period and submit this to DED.
- Take the necessary approvals from other government authorities to cancel the license.
- Cancel the firm card at the Ministry of Human Resources and Emiratisation and visas of foreign partners sponsored by the entity at the respective General Directorate of Residency & Foreigners Affairs.
Once the required documents are submitted and the fee determined by DED is paid, businesses will be granted with the certificate of deregistration (cancellation).
Company liquidation in UAE involves several legal procedures and it can be quite complex and time-consuming. HLB HAMT has an expert team of liquidators who can assist with the liquidation procedure in UAE and the legal matters related to it. We will help with the documentation process, utility cancellations, bank account closure, audited financial statements for liquidation and acquiring the final liquidation report.