Company Liquidation

Company liquidation in the United Arab Emirates (UAE) is the process of formally closing down a business entity. The reasons for liquidation can vary and may include the completion of a project, financial difficulties, restructuring, or a strategic decision by the owners. We, Sheikh Anwar Accounting & Auditing LLC, having vast experience in UAE, experts in this core area can help you to liquidation your companies in UAE smoothly. Here are key steps and considerations for company liquidation in the UAE:

1. Board Resolution:

• The first step is for the company's board of directors or shareholders to pass a resolution approving the liquidation. This resolution should outline the reasons for liquidation and appoint a liquidator.

2. Appointment of Liquidator:

• A liquidator is appointed to oversee the liquidation process. The liquidator can be an external professional or a designated individual within the company. The appointment must be approved by the relevant authorities.

3. Notification to Authorities:

• Notify the relevant regulatory authorities about the decision to liquidate. In mainland UAE, this typically involves informing the Department of Economic Development (DED) in the respective emirate. In free zones, notification should be made to the relevant free zone authority.

4. Clearance of Liabilities:

• The company must settle all outstanding debts and liabilities. This includes payments to creditors, suppliers, and employees. The liquidator may negotiate settlements or payment plans.

5. Cancellation of Visas and Work Permits:

• If the company has employed foreign workers, cancel their visas and work permits. This involves coordinating with the immigration authorities and the Ministry of Human Resources and Emiratisation (MOHRE).

6. Cancellation of Leases and Contracts:

• Cancel or transfer leases, contracts, and utilities associated with the business. Inform landlords, service providers, and other relevant parties about the company's impending closure.

7. Asset Liquidation:

• Liquidate the company's assets, which may include selling inventory, machinery, or other tangible assets. The proceeds from asset sales can be used to settle outstanding liabilities.

8. Audit and Financial Statements:

• Conduct a final audit and prepare financial statements for the period up to the date of liquidation. These documents will be required for submission to the authorities.

9. Publication of Liquidation Notice:

• In accordance with local regulations, publish a notice of the company's liquidation in local newspapers. This serves as a public announcement and informs creditors and stakeholders about the closure.

10. Clearance Certificate:

• Obtain a clearance certificate from the relevant authorities, confirming that all liabilities and obligations have been settled. This certificate is a prerequisite for the final step of canceling the trade license.

11. Trade License Cancellation:

• Apply for the cancellation of the company's trade license with the licensing authority. This involves submitting the required documents, including the clearance certificate, and paying any applicable fees.

12. Final Deregistration:

• Once the trade license is canceled, the company undergoes final deregistration. This involves updating the company's status with the commercial registry and other relevant authorities.

13. Distribution of Remaining Assets (if any):

• If there are remaining assets after settling all liabilities, these are distributed among the shareholders in accordance with the company's articles of association.

14. Closure of Bank Accounts:

• Close the company's bank accounts and resolve any financial matters with the banking institutions.

15. Official Certificate of Liquidation:

• Upon successful completion of the liquidation process, the authorities will issue an official certificate of liquidation, confirming the closure of the company.

It's important to note that the specific procedures and requirements for company liquidation can vary depending on the emirate in which the company is registered and the business activity. Engaging the services of a professional business consultant or legal advisor experienced in UAE regulations is advisable to ensure a smooth and compliant liquidation process.