Company Liquidation – License Cancellation in Dubai
Company Liquidation in Dubai is a process in which an LLC company (or branch of a company), a sole establishment, a free zone company, or an establishment closes its operation and the assets and property of the company or establishment are shared with the Company’s creditors and shareholders. Liquidation is also known or labeled as “winding-up or dissolution of a business”, although technically dissolution corresponds to the final phase of the liquidation process.
Company Liquidation in Dubai
Before you close down your business in Dubai, there are many things to be considered such as company and business name cancellation, employee payments, cancellation of taxation registrations, and other related legal requirements. Sometimes, selling a business is not a remedy.
Types of Liquidation
Liquidation may either be compulsory (sometimes referred to as a creditors’ liquidation) or voluntary (sometimes referred to as a shareholders’ liquidation, although some voluntary liquidations are controlled by the creditors.
- Voluntary Liquidation
In case of voluntary liquidation, the shareholders of a company will decide to wind up the company as they have no money to pay for creditors. In this type of liquidation, priority is given to the creditors.
- Compulsory Liquidation
Compulsory liquidation is a type of company liquidation which is put forward by court order. Here, the assets of the company are distributed to the creditors and contributors based on the priority of claims.
Company Liquidation Process
Once it has been established that the liquidation will begin, the company’s board gathers in a special meeting that will outline the development of the liquidation procedure. A liquidator is appointed at this time and any requests from the company’s creditors will be fulfilled.
First of all, the company must present the official documents that verify that the decision to liquidate the company has been taken. This document will also include the name of the appointed liquidator. The original registration certificate must also be provided, along with the liquidator’s credentials. All these documents should be notarized. After the first steps of the liquidation have been accomplished, the business must also cancel any special permits or licenses it might have obtained to perform various economic activities in Dubai. Branches in Dubai will also need to provide original documents from the parent company.
Documents Required for Free Zone Company Liquidation
- Board resolution for liquidating the corporate and appointment of a liquidator
- Immigration and labor department’s clearance from free zone authority (FZA)
- All Visas ought to be canceled and cleared by Immigration and labor department.
- Submission of Liquidation letter
- Clearance Certificate from free zone authority
- Clearance Certificate (NOC) from Business Unite
- CLD Clearance Certificate from Government section
- Original free zone company license
- All fees and charges need to be settled with the free zone
Above mentioned procedures and document requirements are common in most of the free zones of UAE, However, requirements may differ due to continuous change in it may vary from the free zone.
Documents Required for LLC Company Liquidation
- Notarized Board Resolution to liquidate/ wind up of LLC Company and appointment of liquidators.
- A letter from the appointed liquidator who accepts his appointment as a company liquidator.
- Registration & Licensing Application (Form No. BR/1) from the Economic department of the Emirates.
- Company’s Original License and legal documents.
- Release letter from the property owner.
- NOC letters from the ministry of labor & immigration and RTA.
- No liability and Bank account closure certificate
- Resolutions by shareholders to dissolve the businesses from the Public Notary
- Letter of Company Dissolution by the Economic Development Department (DED)
Documents Required for Dissolution of Branch
- Notarized Resolution by the board of Parent Company for liquidation of the Branch office
- Original License
- Require NOC from the bank, ministry of labor & immigration and RTA
Documents Required for Cancellation of Industrial Unit
- Certificates issued within the different Emirates indicating the cancellation of license(s).
- Original copy of accounts liquidation approved by the partners and stamped by the legal liquidator.
- NOC regarding cancellation issued by the Ministry of Labour and Social Affairs.
- Visa Cancellation of the partner(s) if they are sponsored by their license.
- Copy of the notice of the company’s dissolution and appointment of liquidator to be printed in two local newspapers.
- Partner’s letters for the agreement of the liquidation of the corporate.
Company Liquidation Services
Liquidation of a business can be stressful. At Riz & Mona Consultancy, we will assist you in the process of closing down your business. Our team delivers professional guidelines that can help you minimize your legal liabilities and possible financial losses during license cancellation in Dubai. We coordinate with the concerned authorities and administer all the processes involved to ensure smooth and hassle-free completion of the liquidation process.
We offer various alternative ways that can be adopted for business closure such as winding-up or statutory liquidation and simply deregistering the business. Each way has certain legal and cost implications, on which we guide you in detail. We can also find a third party for you that will purchase the liquidating Company and also deal with all related matters.
We help you consider all the aspects of liquidation a business such as:
- Business liquidation preparation
- Owner’s responsibilities
- The cost of closing down
- Insolvency and Bankruptcy
- A detailed review of all compliances
If you are seeking for professional advisers and specialist, and want to know more regarding company liquidation, please feel free to contact us. We will be happy to assist you.
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