To officially close (dissolve/liquidate) a limited liability company in the UAE, it is recommended that you follow each step to ensure that all elements and licenses related to the limited liability company are closed to avoid any problems in the future. If you If the company’s operations are suspended without a formal cancellation of the business license and full liquidation, fines and fines will accumulate without renewal.
If you own a company that has multiple shareholders, this process will take longer because you must discharge the debt to any partner or creditor, and you need to liquidate the shares. Some types of companies require formal Liquidators and liquidators’ reports, including:
- General partner
- limited liability company
- Simple limited partnership
- Public corporation
- Private joint-stock company
Upon completing the steps to close a UAE Continental company formally, all company partners must be available in that country (or its authorized and certified authority to sign a shareholder resolution to close the company). Through the Ministry of Economic Affairs (DED) After applying to cancel the company, you must follow these steps:
Step 1: close the company bank account
Any valid bank account must be formally closed in the name of the company. After closing the account, you must request a statement for the previous financial year, and the liquidator report will require this statement. Also, you must ask the bank to confirm the bank account confirmation Certificate of closure.
Step 2: Entry and exit inspection
Except for any dependent visa sponsored by any employee, any valid visa sponsored by the company must be canceled.
Step 3: liquidation from required regulators
The regulator must obtain permission for the company’s activities. For example, if you want to close a trading company, you should ask the customs and chamber of commerce for a permit.
Step 4: third party clearance
All fees for any commercial space leased to the company must be paid to the landlord, and approval should be obtained. Also, you will be required to obtain a final bill, such as DEWA or ADDC, and confirm the termination of the utility service registered under the company name.
Step 5: Cancel Registration Post
The company must issue a notice in the local newspaper/gazette stating that the company is in liquidation. In Abu Dhabi, this will take 45 days to allow any creditor to ask any questions before the settlement is approved.
Step 6: company assets
Any property owned by the company or shares held by other companies held in the name of other entities must be sold or transferred. The liquidator’s report will require proof of the transfer or sale.
Step 7: liquidator report
An approved audit company must be used, which is permitted to prepare liquidator reports for the company.
Step 8: Confirm the certificate
Once you have completed all the mentioned steps, you can apply for a confirmation certificate to confirm the termination of the company license and the cancellation of the company.
No matter what type of business you have in the UAE, you must cancel your business license and all related permissions associated with it after you decide to close it. This page provides a summary of the procedures for closing the business and adequately canceling its license.
Why do I need to cancel my license to close my business?
It is essential that the relevant government entity knows that you are no longer engaged in the business so that you can avoid any accumulated fines and penalties due to the license when the validity period has not been renewed.
If you are in a joint-stock company, you must pay off debts to creditors and partners and protect your rights and shares.
If you decide to open again, you should also consider your goodwill and business reputation wisely.
Procedures for Canceling Business License
The cancellation of the license depends on the form of your company. For institutions and sole proprietorships, the process is simple, because all you have to do is apply for cancellation through DED and obtain all relevant licenses from:
Ministry of Human Resources and Emirates Residence and foreign affairs office Related Hydropower Bureau Leasing entities, etc.
However, for a company that owns shares, the process is longer because it requires liquidation of shares, collection of debts, and payment to creditors before it can be finalized with DED.
Companies requiring liquidators
If your company’s legal form is one of the following, you need to appoint a liquidator:
- General partner
- limited liability company
- Simple limited partnership
- Public corporation
- Private joint-stock company
What are the steps to dissolve various companies (except private companies)?
The process involves two phases:
Phase 1:
- Prepare notarized minutes of the conference to confirm the company’s liquidation and appointment of liquidators.
- Formal letters will be arranged by the registered liquidator accepting this responsibility.
- Fill in the required form through DED or other approved channels to apply for cancellation.
- DED will issue a liquidation certificate.
- Clearing notices published in two local newspapers.
- The notice gives the debtor a grace period of 45 days from the date of issue to file its claims.
Phase 2:
- A statement from the liquidators and partners to the DED indicates that there were no other objections during the grace period.
- Collect necessary approvals from other government agencies to cancel licenses.
- Cancellation of the corporate card for Human Resources and Emirates.
- Cancellation of the company’s visa for a foreign partner sponsored by the General Residence and Foreign Affairs Office
- Submit all the above documents for approval of the final removal.
- DED will determine the cost.
- After paying the required fee, you can receive a cancellation (cancellation) certificate.
Frozen trade permit
Freezing a license is not the same as a wholly terminated license. In Dubai, companies can keep their three-year inactive trade license by paying a certain freezing fee. However, they cannot extend it beyond that particular period.