The UAE is a prominent business destination offering numerous opportunities for corporate growth and development. However, sometimes business owners wish to relocate into another country, back home, or focus on a different business venture.
Additionally, not all businesses can succeed in the UAE’s dynamic and competitive market. The inability to predict market trends has caused the liquidations of a variety of businesses worldwide. Thus, some companies resort to liquidation.
What is a company liquidation?
If an LLC, a branch of an LLC, a free zone company, an offshore company, or a sole establishment ceases to operate, the firm’s licenses must be canceled and the assets must be divided amongst its shareholders and creditors accordingly. This blog will outline how you can cancel your trade license and liquidate your company in the UAE!
The liquidation and license cancellation processes are very complex and time-consuming due to the multitude of required documents and relevant authorities which partake in it. Dubai Business Advisors can advise and assist companies wishing to liquidate, dissolve, or wind-up in a simple, more affordable, and faster manner!
Why does company liquidation occur?
Liquidation is a great way to minimize the losses of a company that does not have the liquidity of funds to operate. Liquidity issues can arise from the firm’s inability to pay creditors off or from suffering a corporate crisis.
Is company liquidation mandatory?
Liquidation can be a proactive process where the decision-makers or the firm foresee losses and mitigate them through a market-exit strategy or a shareholders’ liquidation. However, liquidation is always compulsory (creditors’ liquidation) for companies unable to cover their costs and liabilities.
It is important to note that the failure to cancel your trade license could expose you to fines and penalties by the UAE’s authorities.
Company liquidation process
Liquidation involves the cancellation of your trade license, the payment of all utility bills, approvals from relevant government authorities (contact us for details), bank account closure, drafting the final audit report, canceling all of the work permits and company visas.
- LLC license cancellation involves:
- Appointing a liquidator (Dubai Business Advisors)
- Providing a notarized certificate containing the liquidator’s:
- Authorized Signature
- Auditor Registration Certificate
- Trade License Copy
- Drafting, Notarizing, and submitting the copy of the Resolution of the Board of Directors
- Canceling the work permits and visas of all of your company’s employees and partners
- Receiving approvals from your telecommunications provider (e.g. Etisalat), water and electricity authority (e.g. DEWA), and the Ministry of Labor
- Advertising your liquidation in at least 2 local Arabic newspapers
There is a time-frame of 45 days where your company must respond to any financial claims/objections from its clients or third parties. This process requires the confirmation of your liquidator and partners during the cancellation process.
- Submitting the final audit report and the original newspaper advertisement to the Department of Economic Development of your respective emirate
- Paying your outstanding fees
- Sole Establishment license cancellation involves:
- Cancel the work permits and visas of your employees
- Obtain an Establishment Card Cancellation form
- Obtain a seal and authorized signature your company on the cancellation form and submit it to the Ministry of Labor. This step is required even if you do not have an establishment card.
- Procure the company owner’s signature on the DED’s cancellation form and submit it for approval
- Pay the DED’s licensing fees
- Proceed to the Department of Protective Systems for Police approval
- Receive your Cancellation Certificate
- Take the certificate, original Establishment Card, and the request letter (in Arabic) to the Immigration Head Office
If your card is lost, the Police will provide you with a Certificate of Loss which also requires an Arabic request letter for submission to the Police Authority for processing which takes 2 days on average.
How can Dubai Business Advisors company liquidation services help you liquidate and cancel your trade license?
We specialize in the following:
- Drafting the Shareholders’ Resolution to liquidate the company
- Legalizing the liquidation documents
- Drafting a Power of Attorney
- Liquidating your assets
- Preparing your Liquidation Report
- Posting your liquidation advertisement in 2 local newspapers
- Canceling your Establishment Card
- Canceling your Labor Card
- Canceling your company’s visas and work permits
- Obtaining approvals from all of the relevant government authorities
- Procuring the Final Liquidation Certificate
Which documents will I need to provide to for company liquidation?
- Your original Trade License
- Original Certificate of Registration
- Original Share Certificate
- Original Memorandum of Association (if applicable)
- Original Establishment Card
- Your company’s E-sign Card
- Original Lease Agreement
- Company Stamp
- Bank Account Closure Letter
- Corporate Account Statement
What is the cost structure of a company liquidation in the UAE?
Depending on the type of your business and the emirate in which it is located, the costs range from around AED 8,000-12,000. Visa cancellations cost AED 500 per Visa.
Why choose Dubai Business Advisors when liquidating your company?
- Expertise and Experience: we are a leading market entry and exit specialists since 2002, catering to international clients of all sizes with our wide range of comprehensive corporate solutions!
- Convenience: we process all of your documents and approvals saving you time, effort, and money! With us, you can liquidate your company from the comfort of your home! Our working relationships and experience with government authorities allow us to speed your liquidation process substantially!
- Commitment to our clients: our specialized consultants will serve as your point of contact for all of our services!
For assistance and consultation contact our specialist consultant Ashwin by:
Phone: +971 54 329 7867
Ashwin Chandrashekar is a specialist in providing highly efficient liquidation services to Limited Liability Companies, branch of local/ foreign companies, Free Zone Companies & Offshore Companies including submitting newspaper ads, obtaining Audit report, obtaining clearances from government departments, cancellation of visas & obtaining final liquidation certificate.