Liquidation Of Company In Dubai | Procedures And Steps…
Liquidation of a company in Dubai is a long and tiring process. Every company is not able to adapt to the changing economic conditions. This will often result in dissolving the company. However, you must inform the government as well as the employees once you plan to close your company to avoid any penalties.
To start with, one must file an application for the de-registration process. It is easy if one contacts the consultancy that offers the company liquidation services in Dubai, UAE.
When is the Liquidation is necessary?
- Firstly, when the company fail in paying the creditors. In other words when the company debts are more than the value of it’s total assets.
- Or if one does not have enough funds to carry on with the day-to-day activities.
- Further, if any wrong activity is done by the company.
- If there is continuous decrease in the number of people working in an organization.
- Or if the company has failed to register itself as a public, private or public company.
- If the company fails to trade for one year from the formation.
Pre-requisites before liquidating the company:
- Firstly the settling down all the used bills.
- Secondly paying off the communication Bills.
- Thirdly the closing of all the bank accounts.
- Fourthly prepare the final audit report.
- And lastly cancel all the visas issued under the business license.
The role of the liquidation services:
A liquidator is a person who manages the process of the company liquidation. He / She also deregisters the company while selling its assets. The major duties are:
- Firstly, sell the assets and pay the creditors with the money from the sale.
- Secondly, share remaining money with the shareholders.
- Thirdly, represent the business in courts if required.
- Fourthly, provide a report providing the assets of the business and the settlement of the liabilities.
- And lastly managing the final closures.
The documents required for the process:
- The completed cancellation form.
- The attested partnership cancellation contract.
- The Notarized general assembly minutes, confirming the company liquidation and appointment of the liquidator.
- An official letter from the liquidator accepting the duties.
- There are other requirements depending upon the entity your company is registered with.
The Check list for the Free Zones in UAE
- The letter of resolution of the board.
- A registered liquidator must be appointed.
- Cancel visas of all the employees.
- Submit liquidation report prepared by a registered auditor.
- The clearance certificate from the free zone authority.
- The no objection certificate from the company.
- In some cases, clearance certificate from RTA, Dubai Customs etc.
- Settling of all the fees, charges and expenses within the free zone.
The Check list for the LLC Companies:
- Firstly the board’s resolution from the company.
- Further the letter from the appointed liquidator accepting his appointment.
- Next registration for the first phase of license cancellation in Dubai Economy.
- The company’s original license and the legal documents.
- The release letter from property owner.
- The NOC letter from the ministry of labor and immigration and other departments if required.
- The Bank account closure certificate.
- Resolution by the shareholders to dissolve the business from the Public Notary.
- And finally advertisement of license cancellation in newspaper.
The Stages of the Liquidation Of Company In Dubai include procedures:
- Firstly, the disinvestment of the assets.
- Secondly, the recovering debt and paying off the creditors.
- Thirdly, preparing all the documents.
- Fourthly, the arrangement of the accounts for liquidation.
- Fifthly, the termination of the contracts.
- Next settlement of the payments.
- The notice and the publication.
- And finally the de-registration.
The Steps in the process of the Liquidation Of Company In Dubai
The License cancellation is the first step in the process and it may vary based on the form of the company. In the case of establishments and the sole proprietorships, one have to apply for the cancellation through the DED. Also, the clearances are needed from the various departments:
- The ministry of Human Resources and Emiratization.
- The General Directorate of Residency and Foreigners Affairs.
- The Relevant water and electricity authority.
- The leasing entity.
For companies with the shares, the process of winding up a company is not easy. It involves in the liquidation of the shares. Next comes collecting of the debts and paying of the creditors’ before winding up with DED. It will be easy to take help from a company that offers business liquidation services. These are the companies which may need them:
- The General Partnership
- The Limited Liability Company
- The Simple Limited Partnership
- The Public Joint Stock Company
- The Private Joint Stock Company
The Steps involved in the process of liquidation in the Dubai Development Authority (DDA):
- Provide the notice to the DDA for the reason behind the closing. This should be done one month before the liquidation.
- The board resolution or shareholder’s resolution in case of FZE/FZCO.
- Hand back the office keys and the transponders.
- Announce by publishing in two newspapers that is in one in English and another one in Arabic.
- Submit the original documents required to the DDA.
- Get the clearance from the authorities:
- The Dubai Customs Department
- The DDA Finance Department
- The DDA Government Services Department
- DDA IT Section, and the Facilities Management Clearance.
So in conclusion, Professional license requires less time and effort to liquidate than limited liability and Free zone companies. LLC and Free zone companies require a lot of documentation so its better to hire someone who is experienced in company de-registration service. We will always hope that you don’t have to reach at that point, but if you do, We at Beyond View have a team of professionals who also provide services for the liquidation of the company. You can always contact us for more information.