What is liquidation of company?
Liquidation or winding up of a company is an activity whereby the operation of a company and its existence will come to an end.
The liquidation or winding up of a company is commonly known as closing of a company or cancellation of a company in the UAE.
What are the Steps & procedures for cancelling License of Entities in UAE?
Notice of Company’s Dissolution & Appointment of a Liquidator: As a first step the company has to pass a resolution for dissolution (closing) of the company in the shareholders meeting. This resolution has to be attested by Notary Public in the case of Limited Liability companies registered in the UAE. If the shares holders are not available in the UAE, then the resolution has to be notarised and attested from the UAE embassy of that country and has to be attested and legalised from the Ministry of Foreign Affairs and Ministry of Justice in UAE. In the case of companies registered in most of the Free Zones attestation from Notary Public is not required. In this statement of resolution, the appointment of liquidator should also be included with the name of the liquidator along with their address. Further, in the case of sole establishments this step is not applicable.
What are the documents required initially for Liquidation of Company in the UAE?
REQUIRED DOCUMENTS – link
- License Copy
- Memorandum of Association Copy with all the changes
- Power of Attorney if any
- Shareholders Resolution
- Shareholders passport Copy
- Emirates ID Copy
- Deregistration Application Form
Notice Period for Liquidation of company.
Once the above documents are submitted and the initial payment is also done to the concerned Authority (Department of Economic Development), a liquidation certificate (primary) will be issued. It is a documentary evidence from the Authority for the company to proceed with winding up of a company.
Once the liquidation certificate (primary) is obtained the company can proceed for advertisement in the newspaper. In the case of Limited Liability Companies and some of the Free zone companies such as Dubai Creative Cluster Authority, etc requires forty five (45) days’ notice of liquidation advertisement in the public newspaper . In the case of LLC companies four advertisements are to be published in Arabic language.
What are the actions to be taken during Notice Period?
- Clearance from Immigration Department
- Clearance from Labour Department
- Clearance letter from Electricity and Water Departments
- Clearance letter from Telecom Authority (DU or Etisalat, etc)
- Clearance letter form Landlord
- Bank account closure letter
Final Step for Liquidation of company?
Once the notice period is over the following documents are to be submitted along with the above-mentioned documents:
- Liquidation report
- Copy of Newspaper advertisement
Once the above documents are submitted, the authority will review and upon approval of the same final payment to the authority has to be done. Thereafter, the final certificate called License Cancellation Certificate will be issued by the concerned Authority.
CANCELLATION PROCEDURE :
Cancellation of Limited Liability Company License
- 1. Cancel all existing employees, if any
- 2. Resolution of Director Board for dissolution and appointment of a liquidator and it has to be attested from Notary Public.
- 3. Letter from the Liquidator along with their License Copy, Auditor registration certificate, Authorized signature certificate attested by Notary Public.
- 4. Payment of the fees at Department of Economic Development to issue company liquidation certificate.
- 5. Liquidation advertisement in two local Arabic newspapers for one day and wait for 45 days to check whether any client has financial claim against the company
- 1. Present original newspaper Ad and final audit report of the company to the Department of Economic Development.
- 2. Confirmation of the Liquidator and Partners that there is no any objection/claim from the third party during the Ad period.
- 3. Cancel visa of partners, if any, and get clearance letter from Ministry of Labour and Immigration,DEWA,Etisalat.
- 4. Copy of Director Board resolution and copy of liquidation certificate..
- 5. Pay fees at Department of Economic Development.
Cancellation of Sole Establishment companies
- 1. Cancel all existing employees, if any.
- 2. Type Labour Establishment Card Cancellation form from Tas’heel Center. No government fees there.
- 3. Get seal and authorized signature of the company on the application and submit at any of the Labour Office branch. Labour office will issue their NOC by putting a stamp on the application you submitted.
- 4. You should prepare the above mentioned cancellation form even if your company didn’t make a Labour Establishment Card.
- 5. Then type license cancellation form of Department of Economic Development, get signature of the owner and submit at DED.
- 6. Pay fees at Department of Economic Development for cancellation
- 7. Economic Department will issue a file number and take it to Department of Protective Systems to get clearance from Police authority. If there are no violations in Police records, they will send clearance message soon to DED electronically.
- 8. Pay fees to ded to get Cancellation Certificate.
- 9. Take this certificate to Immigration Head office in Jaffliya along with a request letter in Arabic and original Immigration Establishment Card. If the card is lost, you will have to get Certificate of Loss from Police. To get this certificate, prepare a request letter in Arabic and submit it at your nearest police station. Certificate will be issued after two days
Cancellation of free zone companies
Different free zone has different procedures for liquidation but most of them have the same process
Resolution from Board for liquidating the Company and appointment of liquidator (registered and approved liquidators in UAE)
Immigration and labour departments clearance from free zone authority. All visas should be cancelled and cleared.
Liquidation letter by registered auditor for FZE & FZCO only to be submitted
All fees and charges are to be settled with the free zone.
Clearance Certificate from free zone authority (For companies transferred from free zone) to be submitted.
Clearance Certificate from Business Unite (NOC).
Clearance Certificate from CLD Government section
How can Standard Accountants Group Help you with Company Liquidation in UAE?
Liquidating a company in the UAE can encounter lots of challenges during the entire process and it is also a step wise process where time is consumed gradually.
- We can guide and support you to complete all the legal formalities and procedures to liquidate your company in the UAE.
- Support and Guidance will be provided to Deregister for VAT in UAE.
- As we are approved Auditor of all the Free Zones in the UAE, we will extend our support to prepare the final audit report.
- Plan a cost-effective Company Liquidation by avoiding unnecessary expenses.