Company liquidation in Dubai is the process through which a business ends its commercial activities. The procedure is also known as company winding up and it depends on several factors, among which the type of entity being closed.
If you plan to close a company in Dubai, this article covers most of the procedures and explains the requirements for ending a business activity. From a practical perspective, the procedure can be completed with the assistance of our Dubai company formation agents.
Types of company liquidation in Dubai
From the perspective of the procedure of winding up a company in Dubai, it is the same as in other countries, namely:
1- the voluntary procedure, where the decision to close the company is made by the shareholders;
2- the compulsory procedure, where the decision is in fact a ruling of a Dubai court of justice.
From this point of view, foreign investors who want to close LLC companies in Dubai, for example, will have a sense of familiarity.
Our company formation agents in Dubai can offer more information about company liquidation procedures under Commercial Law.
Company liquidation considerations in Dubai
Business owners interested in closing a company in Dubai must consider the following:
- the type of enterprise, and here we are looking at its legal personality, which can be non-corporate or corporate;
- the place of registration, which in Dubai can be a mainland or afree zone;
- the type of company liquidation procedure, which can be voluntary or compulsory.
Since shutting down a sole proprietorship is simpler than closing an LLC company in Dubai, we will focus on the second scenario, considering this legal form is the most popular in the UAE. Our local agents can also help if you want to terminate other business forms.
Company liquidation steps in Dubai
Here are the steps to follow in order to close a company in Dubai:
- drafting the liquidation resolution and its adoption by the shareholders in the case of voluntary dissolution;
- the appointment of the liquidator, who is usually selected from the company’s management board;
- filing of the resolution with the Dubai Commercial Register and its publication in the media;
- filing for the revocation of the business license with the Dubai Department of Economy and Tourism.
In the case of a compulsory company liquidation procedure in Dubai, the decision is issued by a judge. During the same stage, the liquidator will also be appointed. An officer of the court is usually nominated.
In the case of free zone companies, an additional step implies the notification of the free zone authority about the business going into liquidation.
At this stage, our Dubai company registration consultants can handle the preparation of the documents needed for the closing of the company.
The company dissolution procedure in Dubai
Voluntary or compulsory company liquidation can be requested by the shareholders or the creditors in Dubai. The shareholders will hold a meeting during which a resolution must be passed for the procedure to begin, in the case of voluntary dissolution. During the same meeting, a liquidator must be appointed. In the case of compulsory liquidation, the procedure will begin by court order.
Winding up a company in Dubai implies the gathering and submission of the following documents:
- the standard de-registration application form;
- the shareholders’ resolution;
- a copy of the company’s business license;
- copies of the shareholders’ identification papers (IDs or passports, depending on their nationalities);
- a copy of the company’s Articles of Association;
- a power of attorney, in case of external representation.
Since we mentioned the possibility for companies to have foreign shareholders, we also inform you that our services also include company formation in Dubai.
A key aspect no matter the type of company liquidation procedure is that the Dubai company must append the terms ‘in liquidation’ to its trade name.
Trade license cancellation in Dubai
Once the company winding-up process is begun, the business must also be erased from the Dubai Trade Register and have its commercial license revoked. The following documents will be filed in order to complete this process:
- the final account related to the assets liquidated during the process approved by the shareholders or by the liquidator;
- a no-objection letter stating the approval of the cancellation of the license issued by the Ministry of Labor;
- the statement on the company dissolution and nomination of the liquidator;
- a visa revocation for foreign partners, in case they were sponsored by an UAE national.
How long does it take to close an LLC or any other business in Dubai?
Closing a company in Dubai does not take long when it comes to the voluntary procedure. Here is what to expect:
- the entire procedure takes between 60 and 65 days;
- out of these, the notice period alone takes 45 days.
Our local specialists can also offer other services, among which one of the most requested is support in immigration to Dubai. If you decide on entrepreneurial relocation, we can also help you set up a business in Dubai.
For assistance with the company liquidation procedure, do not hesitate to contact our representatives in Dubai
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