Company Liquidation Services UAE

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Company Liquidation Services UAE

Company liquidation is a hectic task. The liquidation of a company is not just about closing it down; there are many factors to be considered while doing so. The government authorities have to be notified, the business licenses will have to be canceled, assets need to be distributed and the list goes on. The legal formalities included in company liquidation are the most tedious task among them all.

What is company liquidation?

Company liquidation is a legal insolvency process that concludes the operations of a business. When a company goes through liquidation, its assets are sold to pay off its debts, liabilities, and commitments. Often known as ‘winding down’, the business license of a company is cancelled upon liquidation, its name is deleted from the Trade Registry, and the firm is considered to have ended.

There can be diverse reasons for liquidation, the major ones are;
  • The expiry of license/ duration stated in the articles of incorporation/ association or the accomplishment of the objective for which the entity was set up
  • The loss of all or a major portion of the entity’s assets
  • Mergers
  • Shareholders’ approval that the entity’s term of existence can be brought to an end as per the stipulated majority, etc.

When a firm can no longer pay its debts, it might be dissolved either voluntarily or forcibly by authorities. There are two types of company liquidation methods under UAE law:

  • Liquidation on a voluntary basis

There are various reasons for a corporation to voluntarily wind up, including the expiration of a defined period, the achievement of the firm’s mission, abandonment of the goals, merging with another firm, ongoing commercial setbacks, and the company’s failure to afford its obligations.

  • Liquidation on a compulsory or legal basis

The compulsory winding up of a company relates to the necessary measure taken when a firm commits a major violation of the law or when the company is unable to continue its commercial activities. It also takes effect when customers submit complaints with government agencies to recover their assets. The local government then takes steps to dissolve the enterprise forcibly.

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Who is a Liquidator?

The person who is in charge of conducting the liquidation process is termed the liquidator.  The court or shareholders of an entity appoint a liquidator and it is dependent on the type of liquidation as well. Immediately after being appointed, the liquidator will provide a formal letter of acceptance. They will write a statement of affairs and a liquidator’s report once all of their responsibilities have been performed, which are required to perform the liquidation procedure.

License Cancellation

License cancellation is one of the primary steps in the liquidation process, and the formalities differ based on the form of company. In the case of establishments and sole proprietorships, you will have to apply for cancellation through DED. Also, clearances need to be acquired from the below-mentioned departments-

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

What are the seven steps involved in limited liability company liquidation in Dubai, UAE?

STEP 1: The first step of company liquidation is to submit a notice to the Dubai Development Authority (DDA) mentioning the reason for liquidation.

STEP2: The board resolution for de-registration of the company must be attested by the owners before the authorities of the DDA.

STEP 3: Place an advertisement in newspapers about the liquidation of the company in both Arabic and English language.

STEP 4: The original company license, Certificate of Formation & Share certificates, Lease agreement, and the Original Department of Economic Development License must be submitted to the DDA.

STEP 5: DED will provide creditors or clients with a 45-day notice time to wait if they have any financial claims against the company. Also, cancel all employee and partner visas and receive NOC from the Ministry of Labour.

STEP 6: Once the notice period is over, the liquidation report must be prepared by an auditor in Dubai.

STEP 7: The completed Report, along with all supporting evidence and the applicable cancellation payments, should be sent to the relevant Authority, who will evaluate it and, if accepted, issue a ‘License Cancellation Certificate.’

What are the six steps involved in the liquidation of a free zone company in the UAE?

Almost every free zone has its own process for liquidating businesses. The most typical and standard approach for de-registrating a Free Zone Company in the UAE is as follows:

STEP 1: Minutes of a board of directors meeting declaring the firm to be liquidated and appointing a regulated liquidator AND send a notification to the Dubai Development Authority (DDA) explaining why the company is being liquidated.

STEP 2: A letter from the registered liquidator declaring the acceptance of responsibility for the company’s liquidation, as well as fees to be sent to the relevant free zone authorities

STEP 3: Place an advertisement in newspapers about the liquidation of the company in both Arabic and English language.

STEP 4: The Free Zone Authority will grant a 45-day notice period to wait for creditors or clients who have financial claims against the enterprise.

STEP 5: Once the notice period is over, the liquidation report must be prepared by an auditor in Dubai and also obtain certificates of clearance from the Free Zone Authority (FZE/FZCo)

STEP 6: Cancel all employee and partner visas, receive NOC from the Ministry of Labour and Ministry of Immigration, and send all documentation to the Free Zone Authority, who will issue a final business liquidation certificate after verifying all of the documents.

There are certain things to look into when you decide to liquidate a company. Leaving the task to a professional who provides company liquidation services will be a wise choice.

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How can Jumeira Consultants help in Company liquidation in UAE?

Jumeira Consultants has been offering company liquidation services for over a decade. As one of the top liquidators in Dubai, we ensure to assist you in the entire process of company liquidation. The liquidation process of a company is mostly legal formalities and without the support of a liquidation service provider, it could be tiring and more time-consuming. Our team of company liquidation experts will guide you in the entire process. We can assist you as a liquidator and as a liquidation service provider.

Canceling of licenses and seeking approval from different government authorities will be done by our professionals and will help you attain the liquidation report as soon as possible. Cancellation of the license, advertising in at least two newspapers about the company’s liquidation, submission of declaration papers at the Department of Economic Development (DED), obtaining objection letter from the partners, cancellation of the partner’s visa, liquidating the assets, can all be done by Jumeira Consultants. We offer company liquidation services across the country and we aim to make things easier for our clients with our prowess.

With our extensive experience in offering company liquidation services, we have been able to keep our relationship with the government authorities and agencies alive, which will make things a lot easier.

If you’re interested in setting up an offshore company in the UAE, please +971 52 809 8408  right away; we’d be pleased to assist you.

Apart from business setup services, we offer business consultancy services, mergers and acquisitions, tax residency certificates, trade licenses and many other services.

Frequently Asked Questions

Need more answers? Don’t hesitate to reach out for further clarification or assistance regarding your queries through this FAQ.

WHAT SHOULD AN INDIVIDUAL DO BEFORE LIQUIDATING THEIR BUSINESS IN THE UAE?

All utility and telephone bills must be paid, all visas under the license must be cancelled, bank accounts must be closed, and a final audit report must be prepared.

WHAT IS THE DEPARTMENT OF ECONOMIC DEVELOPMENT (DED)?

The Emirate of Dubai’s Department of Economic Development (DED) is a government entity tasked with setting and driving Dubai’s economic strategy within the United Arab Emirates’ larger governance frameworks.

WHAT ROLE DOES DED PLAYS IN LIQUIDATION PROCESS OF A COMPANY?

DED will issue the liquidation certificate for deregistering a company in the United Arab Emirates.

WHEN A COMPANY IS LIQUIDATED, WHAT HAPPENS TO THE EMPLOYEES?

All employee visas have been revoked. Otherwise, the company would be unable to finish the liquidation process.All employee visas have been revoked. Otherwise, the company would be unable to finish the liquidation process.

WHAT ARE THE DOCUMENTS REQUIRED INITIALLY FOR THE LIQUIDATION OF A COMPANY IN THE UAE?

License copy, shareholder’s resolution, shareholders passport copy, Emirates ID copy, de-registration form, Memorandum of Association copy (with changes), Power of Attorney (if needed).

IS THE LIQUIDATION PROCEDURE DIFFERENT IN VARIOUS JURISDICTIONS?

Distinct jurisdictions have different liquidation procedures.

WHAT ARE THE TWO TYPES OF LIQUIDATION?

Voluntary liquidation and compulsory liquidation.

HOW DOES JUMEIRA CONSULTANTS HELP IN THE PROCEDURE OF COMPANY LIQUIDATION SERVICE?

Jumeira Consultants is an established liquidator firm. We provide top company liquidation service in Dubai. We have an experienced team of liquidators that can assist you with the liquidation process as well as legal issues relating to winding up a business in the UAE.