No matter what type of business is owned in the UAE, cancellation of the business licence along with all related permits associated with it, is mandatory. The liquidation or winding up of an organisation is a procedure where all the operations and its existence is terminated.
It is significant for relevant government units to understand that you are no longer operate the business any accrued fines and penalties incurred upon the license will be avoided, when it is not renewed upon expiry date.
If it is a shareholding company, it is vital to emit your liabilities with subject to creditors and partners and protect your interests and shares.
First and foremost, the entity must pass a resolution for closure of the company in the shareholders meeting. This declaration must be confirmed by Notary Public in the case of Limited Liability companies listed in the UAE.
However, if the share’s holders are not accessible in the UAE, then the resolution for termination must be validated and corroborated from the UAE embassy of that country and must be attested and legalised from the Ministry of Foreign Affairs and Ministry of Justice in UAE.
In case of free zone registered companies, attestation from the Notary Public is not required. Also, in this case, it is important to mention the name and address of the liquidator involved. However, in case of stand-alone entities the above-mentioned step is not required.
A liquidator is required to be appointed if the legal
structure of the company is one of the below mentioned:
As soon as the above-mentioned documents have been submitted and the initial payment made to the Department of Economic Development (DED), a liquidation certificate (primary) will be released. This certificate is a documentary evidence from DED, to confirm that the entity may proceed with their termination process.
After obtaining a primary liquidation certificate, companies can advertise for closure in the newspaper. For Limited Liability Companies and some of the Free zone companies need a notification of 45 days for liquidation advertisement in the local newspaper. LLC companies require to publish 4 in Arabic as well.
When the notice period is over, the following documents need to be presented along with the above-mentioned.
Once all the requirements have been met, the government authority reviews and sanctions approval. When the approval has been given, the final payment must be made. Finally, “License Cancellation Certificate” will be released.
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