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Winding Up a Company in Dubai
To close down a company in Dubai or anywhere else in the United Arab Emirates, you need to first appoint a liquidation firm. According to UAE Company Law, only approved liquidators or liquidation firms can be hired to oversee the process of de-registering a company.
A company can be dissolved by its owners or it can be forced to close down when it can no longer meet its debt obligations to its creditors. Accordingly, there are two types of company liquidation.
There may be multiple reasons why a company is liquidated of its own accord. This may be due to the death of the owner / primary shareholder and the absence of a succession plan, shareholders liquidating the company because it has achieved its business objectives or because the original purpose for which the company was set up is no longer in existence, its merger with another company, financial losses which make it difficult for the company to continue business operations, or other reasons.
Sometimes, a company is forcefully closed down by the authorities because it has violated the laws of the UAE, or because it is insolvent, ie. it no longer has any money to continue and cannot meet its existing debt obligations to its creditors. In case of the latter, it is to be remembered that the authorities take cognizance only following complaints from creditors and not of their own accord. With the help of an approved liquidation firm, the assets are liquidated and the creditors paid back as much as possible.
How to Wind Up a Legally Limited Company (LLC)
Board of Directors meeting
The Board of Directors must unanimously decide to close down the company. All Directors must agree to this, the document which specifies this must be attested by a Notary Public. At the meeting, the decision to appoint an approved liquidator must also be taken, and too must be mentioned in the legal document.
Submission of Application for Liquidation
A Liquidation Form needs to be filled in and duly submitted to the Department of Economic Development in the emirate where the company has been registered. For company liquidation in Dubai, there is the Department of Economic Development, while in Sharjah, the corresponding authority is the Sharjah
Economic Development Department.
Publication of the Dissolution Decision
The decision to dissolve the company must be published in a local Arabic paper, so that all existing creditors are notified and can lodge their claims with the company. This must be published at least 45 days prior to winding up the company, so that creditors have sufficient to make their full and final claims upon the company.
Liquidator Acceptance
The approved liquidator or liquidation firm must agree to take on the responsibility of liquidating the company and its assets. This must be given to the company in writing, so at the time of taking the decision to wind up the company, the liquidator must be kept informed that he/she is being appointed as the official liquidator to oversee the process of closing down.
Notice Period
The Department of Economic Development in the emirate where the company is registered, such as the Department of Economic Development – Abu Dhabi for firms registered in Abu Dhabi or the Department of Economic Development of Ras Al-Khaimah for companies incorporated in Ras Al Khaimah, mandates a 45 day notice period for all companies that have decided to close down.
Visa Cancellation & Settlement of Dues
During the 45-day grace period granted by the Department of Economic Development, all company-related visas must be cancelled. This includes both the work visas of employees / partners as well as the residence visas of their spouses and children, if any. A No Objection Certificate must subsequently be obtained from the Ministry of Labour and Ministry of Immigration.
All outstanding utilities and communications bills must be settled and NOCs obtained from the utilities provider, such as DEWA for Dubai and communications provider, such as Etisalat / du.
Liquidator Report
The Government approved liquidator submits a Final Audit report stating that all outstanding dues owed to creditors have been settled and there are no pending claims upon the company after the end of the 45-day grace period. To prevent any further delays, it is always recommended that dues owed to creditors, clients, or other third parties are settled before the decision to close down the company is taken.
Liquidation Certificate
Once the Department of Economic Development where the company is located, such as the Fujairah Department of Industry and Economy for companies registered in Fujairah, or the Ajman Department of Economic Development for companies based in Ajman, is satisfied that the company has met its creditors' claims and all other outstanding dues upon the company, it issues a Final Liquidation Certificate stating that the process has been completed successfully.
Why Choose Us For Company Liquidation?
We are a Government-approved liquidator and have experience with company liquidation in Dubai and elsewhere in the United Arab Emirates. Our expertise ranges from Sole Establishment / Sole Proprietorship to Legally Limited Company (LLC) to Legally Limited Partnership (LLP) to Civil Company. Whether it is located on the mainland, in a free zone FZE, or offshore (such as in the Jebel Ali Free Zone, abbreviated as JAFZA; or Ras Al Khaimah International Corporate Centre, abbreviated as RAKICC or RAK Offshore), we can be of assistance. We have assisted in the liquidation of over 100 companies and possess years of experience in the field. So choose us.