When closing a business, you want a hassle-free experience. Company liquidation services in UAE simplify the complicated procedures, saving you time and effort. At Bestax, our expert team assists with each step of the company liquidation process in Dubai and Abu Dhabi, ensuring compliance with all legal requirements and offering cost-effective solutions.
Why Opt for Company Liquidation in UAE?
Company liquidation may be required for two main reasons:
- Business Purpose Fulfilled: If the company has achieved its original purpose, liquidation may be appropriate.
- Insolvency: Liquidation is necessary if a company can no longer pay its debts.
Even if there are no debts, it’s best to formally liquidate a company rather than just allowing the trade license to expire. Ignoring this could lead to fines, blacklisting, and restrictions on setting up future companies.
Company Liquidation Process in UAE: Key Considerations
The company liquidation process in UAE depends on several factors, including company ownership, the type of liquidation, and the registration jurisdiction (whether in mainland UAE or a free zone).
1. Type of Ownership
- Sole Establishment or Proprietorship: Cancel the business license through the Department of Economic Development (DED) and acquire approvals from the Ministry of Human Resources and Emiratisation, Directorate of Residency and Foreigners Affairs, and utility providers.
- Limited Liability Company (LLC) or Partnerships: Appoint a liquidator and secure permits from relevant authorities.
2. Types of Liquidation
- Voluntary Liquidation: Shareholders of a solvent company can voluntarily initiate liquidation. Insolvent companies can also choose to liquidate assets to repay creditors.
- Compulsory Liquidation: Creditors may apply to the court to liquidate a company if debts remain unpaid. The court can impose liquidation and require the sale of assets to settle outstanding obligations.
3. Jurisdiction of Registration
- Mainland UAE: In the mainland, companies must appoint an official liquidator to conduct the liquidation of a company.
- Free Zone: Free zones may have different procedures and may not require an official liquidator. However, notifying the Free Zone Authority and obtaining No Objection Certificates (NOCs) is essential. Free Zone companies need to follow steps like closing bank accounts, canceling visas, and obtaining clearances from departments such as water, electricity, and telecom.
Detailed Company Liquidation Procedure in Dubai and Abu Dhabi
The company liquidation process in UAE involves specific steps:
- Resolution & Liquidator Appointment: Conduct a board meeting to resolve liquidation. A resolution must be notarized by a notary public, and a licensed insolvency practitioner or liquidator is appointed to oversee the process.
- Submit Documents to Relevant Authority: Submit the resolution, company’s trade license, Memorandum of Association, Power of Attorney, shareholder IDs, and a de-registration application to the appropriate licensing authority.
- Public Notice (45 Days): Publish a liquidation notice in an Arabic newspaper, allowing 45 days from the date for creditors to make claims.
- Clearances & Bank Account Closures: Obtain clearance letters from departments such as Immigration, Labor, and utility providers. Cancel employee visas, close bank accounts, and cancel trade licenses if applicable. Bank account closures must be completed before submitting final documents.
- Final Liquidator’s Report and Liquidation Certificate: After the 45-day notice period, the liquidator submits a final report confirming no outstanding claims. Once approved, the authority issues a liquidation certificate, marking the official company closure.
Types of Company Liquidation in Dubai and UAE
- Limited Company Liquidation (LLC): Dissolving an LLC involves board meetings, liquidator confirmation, and a public notice for creditors. The process is concluded once the liquidator’s final report is submitted, and necessary clearances are obtained.
- Free Zone Company Liquidation: Free zones have specific procedures, often requiring an initial notification to the Free Zone Authority. The authority issues a formal termination letter upon completion of all required clearances, marking the end of the company.
Whether it’s an LLC liquidation or a Free Zone company dissolution, our company liquidation services in UAE are designed to simplify every step. From initial documentation to the final liquidation certificate, our team will handle all aspects, making the company closure process in Dubai and Abu Dhabi as smooth and compliant as possible.
Costs and Tax on Liquidation of a Company
The cost to liquidate a company varies depending on the jurisdiction, type of company, and extent of liquidation services needed. In some cases, tax on liquidation of a company may apply, particularly if assets are sold. Our affordable company liquidation services cover all aspects to minimize your expenses.
Essential Documents for Liquidation of LLC Companies and Free Zones in Dubai
When preparing for liquidation of a company in Dubai, ensure these documents are ready:
- Power of Attorney (if applicable)
- Copy of the business license
- De-registration application form
- Shareholders’ resolution for dissolution
- Emirates ID and passport copies of shareholders
- Memorandum of Association (MOA), including amendments
. Bestax provides top-notch assistance for all company liquidation needs across UAE, making the process simple, secure, and fully compliant.
Why Choose Bestax for Company Liquidation Services in UAE?
When it comes to closing a business in the UAE, the process can be complex and time-consuming. Bestax simplifies this journey, handling every step of the company liquidation process efficiently and professionally. Here’s why Bestax is the best choice for company liquidation services in Dubai, Abu Dhabi, and across UAE:.
Licensed Insolvency Practitioners
Bestax has licensed insolvency practitioners who oversee and manage the liquidation process, ensuring your company meets all legal requirements. From filing paperwork to final clearance, our experts handle it all, so you can rest easy knowing your business is in capable hands.
Cost-Effective Solutions
We understand that closing a business can be financially challenging, which is why we offer affordable and transparent pricing for all our company liquidation services. Our team provides guidance on how to keep costs low without compromising compliance.
Comprehensive Support Across UAE Jurisdictions
Bestax offers liquidation services for companies registered on the mainland, in free zones, and in offshore locations. Whether you need company liquidation services in Dubai, Abu Dhabi, or any other part of the UAE, our team is ready to handle all jurisdictional requirements with ease.
Timely Compliance and Documentation
Bestax manages all documentation, including resolutions, power of attorney, and clearance letters from relevant authorities. We ensure all documents are notarized, processed, and submitted in a timely manner, preventing delays and potential penalties.
Experienced in Both Voluntary and Compulsory Liquidation
Whether your company requires a voluntary liquidation or a compulsory liquidation due to insolvency, our team is experienced in both scenarios. We handle everything from creditor negotiations to court-mandated liquidation processes, giving you confidence in compliance.
Customer-Centered Approach
We believe in clear communication, transparency, and a client-focused approach. You’ll always know where you stand in the process, and our team is available to answer any questions about the company liquidation process in Dubai, from beginning to end.
Choose Bestax for Stress-Free Company Liquidation in UAE
When you choose Bestax, you’re selecting a partner who handles every step of liquidation with expertise, efficiency, and transparency. We take care of the details, so you can move forward with peace of mind, knowing your business closure is in the best hands.
FAQs on Company Liquidation in Dubai and UAE
1. How long can a company stay in liquidation?
The length of time a company can remain in liquidation depends on its complexity and the company liquidation process. Typically, the process in Dubai, including the required 45 days notice period, can range from a few months to longer if there are unresolved claims or asset issues.
2. Can a director resign from a company in liquidation?
Yes, a director can resign from a company in liquidation. However, the director’s duties during company liquidation may require their involvement in the liquidation process, especially if there are pending liabilities.
3. Can I be a director of a company after liquidation?
Generally, a director can serve in another company following liquidation, unless the liquidation resulted from misconduct or breaches of duty, which could lead to disqualification. Working with licensed insolvency practitioners ensures compliance and helps directors protect their eligibility.
4. How to liquidate a company?
To liquidate a company in Dubai or UAE, you must pass a shareholder resolution, appoint a licensed insolvency practitioner, submit required documents, publish a public notice for 45 days, obtain all clearance letters (from utilities, banks, and government departments), and file the final liquidator’s report for the liquidation certificate.
5. What do you mean by voluntary liquidation of a company?
Voluntary liquidation refers to the decision by shareholders or directors to close a financially sound or insolvent company. It allows directors to initiate the liquidation process themselves, either to fulfill remaining obligations or cease operations.
6. What happens to employees when a company is liquidated?
In liquidation, employee contracts are typically terminated, and outstanding wages are treated as a priority claim. Employees may receive compensation from asset sales, depending on the company liquidation services and asset availability.
7. What happens to shareholders when a company is liquidated?
Shareholders are the last to receive any remaining funds after creditors are paid during the liquidation process in Dubai. If assets cover all liabilities, shareholders may receive a portion of the remaining capital. Otherwise, they may not recover any investment.
8. What happens when a company has been liquidated?
After liquidation, the company ceases to exist legally. A liquidation certificate confirms this, and all assets are either sold to pay creditors or returned to shareholders if funds remain. Directors and shareholders are then officially discharged.
9. What happens when an insurance company is liquidated?
In the liquidation of an insurance company, assets are sold to pay policyholders and creditors. Policyholders may lose coverage, though they may receive a portion of their claims. The licensed insolvency practitioner manages the process to distribute remaining assets.
10. What is the liquidity ratio in a financial company’s liquidation?
The liquidity ratio indicates a company’s ability to cover short-term liabilities during liquidation. It’s an essential factor in determining how much creditors might recover in a company liquidation.
11. What is voluntary liquidation of a company?
Voluntary liquidation is when shareholders choose to liquidate a company, either due to insolvency or completion of its purpose. This process allows orderly closure, asset distribution, and compliance with legal requirements.
12. Why are so many companies liquidating in Dubai?
Factors such as market changes, regulatory updates, and economic conditions lead many companies to liquidate in Dubai. With professional company liquidation services in Dubai, companies can navigate these challenges efficiently and avoid penalties while formally closing operations.
