Company Deregistration & Liquidation Services in UAE
Both the terms – Liquidation & deregistration – indicate bidding goodbye to a business. Closing your beloved business can be the worst nightmare you would ever want to see. However, when you have to shut down your business operations in the UAE for any reason, you must follow certain procedures by law. And we’ve got you.
Liquidation Vs. Deregistration
Liquidation is the process of bringing a business to an end either voluntarily or mandatorily (through a court order). Voluntary Liquidation typically occurs when the shareholder(s) decide to liquidate the company, and in case of dispute between the shareholders, Mandatory Liquidation is requested by the competent court.
Deregistration or ‘license cancellation’ is the process of removing a company from the register of companies. This can happen when a company is dissolved, which means it has come to the end of its legal existence, or when a company is struck off the register, which means it has been inactive for a certain period and has not filed the required documents with the relevant authorities. The requirements of deregistration in the UAE are usually governed by the internal rules and guidance issued by the appropriate licensing authorities. In a typical scenario, the primary prerequisites for company deregistration are:
- Company-issued resolution approving the cancellation of the license and closing it down
- Clearances from the relevant authorities (i.e., telecommunication provider, DEWA, Emirates Post, Customs, etc.) and
- Cancellation of the MoA (Memorandum of Association)
Upon submitting the completed application (as detailed above) with the required deregistration fees, the authority will grant a final certificate confirming the deregistration and cancellation of a company’s license.
Company Liquidation Process in the UAE
The process for liquidating a UAE-registered company depends on its type of legal structure and the jurisdiction in which it is registered. If the company is a limited liability company (LLC) or a Public Joint Stock Company (PJSC), the process for Liquidation is governed by Federal Law No. 2 of 2015 Concerning Commercial Companies (the “Commercial Companies Law”). According to this law, the process for liquidating an LLC or a PJSC involves the following steps:
- The company must convene a general meeting of shareholders to vote on a resolution to liquidate the company. The resolution must be passed by a majority of the shareholders present at the meeting or by proxy.
- The company must appoint a liquidator to manage the liquidation process. The liquidator may be appointed by the general meeting of shareholders or by the board of directors.
- The liquidator must prepare an inventory of the company’s assets and liabilities and submit it to the shareholders for approval.
- The liquidator must distribute the company’s assets to its creditors and shareholders in accordance with the Commercial Companies Law and the company’s articles of association.
- If applicable, the liquidator must submit a final report to the shareholders and the competent authorities, including the Ministry of Economy and the relevant free zone authority.
If the company is a branch of a foreign company located in one of the UAE free zones, the process for Liquidation is governed by the rules and regulations of the free zone in which the branch is registered.
Company Deregistration Process in the UAE
Obtain the consent of all shareholders
In order to deregister a company, you will need the consent of all shareholders. This typically involves holding a shareholder meeting and obtaining a resolution to deregister the company.
Settle all outstanding debts and liabilities
Before deregistering a company, you will need to ensure that all debts and liabilities have been settled. This may involve paying outstanding taxes, settling outstanding loans or other debts, and transferring assets to another entity.
Company Deregistration Process in the UAE
Obtain the consent of all shareholders
In order to deregister a company, you will need the consent of all shareholders. This typically involves holding a shareholder meeting and obtaining a resolution to deregister the company.
Settle all outstanding debts and liabilities
Before deregistering a company, you will need to ensure that all debts and liabilities have been settled. This may involve paying outstanding taxes, settling outstanding loans or other debts, and transferring assets to another entity.
Obtain the consent of any creditors
If the company has any creditors, you will need to obtain their consent before deregistering the company. This may involve negotiating a settlement or payment plan with creditors.
Notify the relevant authorities
Once you have obtained the consent of all shareholders and creditors, you will need to notify the relevant authorities of your intention to deregister the company. This may involve filing a notice with the relevant government agency or submitting a deregistration application.
Submit any required documentation
Depending on the type of company and the specific emirate in which it is registered, you may need to submit various documents in order to complete the deregistration process. This may include financial statements, tax returns, and other documents.
Obtain the consent of any creditors
If the company has any creditors, you will need to obtain their consent before deregistering the company. This may involve negotiating a settlement or payment plan with creditors.
Notify the relevant authorities
Once you have obtained the consent of all shareholders and creditors, you will need to notify the relevant authorities of your intention to deregister the company. This may involve filing a notice with the relevant government agency or submitting a deregistration application.
Submit any required documentation
Depending on the type of company and the specific emirate in which it is registered, you may need to submit various documents in order to complete the deregistration process. This may include financial statements, tax returns, and other documents.
Voluntary Closure of the Business in UAE
In some cases, a company may choose to liquidate voluntarily, while in other cases, it may be forced to liquidate by its creditors. In the United Arab Emirates (UAE), the process for voluntary Liquidation of a company is governed by Federal Law No. 2 of 2015 Concerning Commercial Companies (the “Commercial Companies Law”), as well as the rules and regulations of the relevant free trade zone or local jurisdiction where the company is registered. The process of Liquidation and deregistration can be complex. It may require the assistance of a lawyer or a professional corporate service provider like us. Here are the main requirements for the voluntary Liquidation of a company in the UAE:
Resolution to liquidate
The company’s board of directors must pass a resolution to initiate the liquidation process and appoint a liquidator to oversee the process.
Notice of Liquidation
The company must notify the relevant authorities and its creditors of the decision to liquidate. This can be done through a notice in a local newspaper or by sending a letter to each creditor.
Approval of liquidation plan
The liquidator must prepare a liquidation plan outlining the steps to be taken to settle the company’s affairs and distribute its assets. The plan must be approved by the company’s board of directors and submitted to the relevant authorities for approval.
Payment of debts
The liquidator must take steps to settle the company’s debts, including paying creditors and employees.
Distribution of assets
Any remaining assets of the company must be distributed to the shareholders in accordance with their rights and interests.
Dissolution of the company
Once all debts have been paid and the assets have been distributed, the company can be dissolved by the relevant authorities.
Voluntary Closure of the Business in UAE
In some cases, a company may choose to liquidate voluntarily, while in other cases, it may be forced to liquidate by its creditors. In the United Arab Emirates (UAE), the process for voluntary Liquidation of a company is governed by Federal Law No. 2 of 2015 Concerning Commercial Companies (the “Commercial Companies Law”), as well as the rules and regulations of the relevant free trade zone or local jurisdiction where the company is registered. The process of Liquidation and deregistration can be complex. It may require the assistance of a lawyer or a professional corporate service provider like us. Here are the main requirements for the voluntary Liquidation of a company in the UAE:
Resolution to liquidate
The company’s board of directors must pass a resolution to initiate the liquidation process and appoint a liquidator to oversee the process.
Notice of Liquidation
The company must notify the relevant authorities and its creditors of the decision to liquidate. This can be done through a notice in a local newspaper or by sending a letter to each creditor.
Approval of liquidation plan
The liquidator must prepare a liquidation plan outlining the steps to be taken to settle the company’s affairs and distribute its assets. The plan must be approved by the company’s board of directors and submitted to the relevant authorities for approval.
Payment of debts
The liquidator must take steps to settle the company’s debts, including paying creditors and employees.
Distribution of assets
Any remaining assets of the company must be distributed to the shareholders in accordance with their rights and interests.
Dissolution of the company
Once all debts have been paid and the assets have been distributed, the company can be dissolved by the relevant authorities.
Get in Touch with Your Liquidation or Deregistration Services Provider in UAE
The liquidation process in the Emirates can be complex and time-consuming, and it is highly advisable to seek the assistance of a legal professional or engage one of the business service providers like Ingenious Corporate Services in Dubai to ensure that all crucial steps are taken in line with the law. Click here to book an online consultation with our Liquidation & Deregistration experts in Dubai.
Get in Touch with Your Liquidation or Deregistration Services Provider in UAE
The liquidation process in the Emirates can be complex and time-consuming, and it is highly advisable to seek the assistance of a legal professional or engage one of the business service providers like Ingenious Corporate Services in Dubai to ensure that all crucial steps are taken in line with the law. Click here to book an online consultation with our Liquidation & Deregistration experts in Dubai.
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