Company liquidation in the UAE involves closing a company and settling its liabilities in accordance with local laws and regulations. Below are the main steps typically involved in company liquidation in the UAE:

1. Board Resolution

  • Pass a board resolution or partners’ resolution to liquidate the company, signed by all shareholders.
  • If applicable, notarize the resolution, especially for offshore or free zone companies.

2. Appointment of a Liquidator

  • Appoint a licensed liquidator approved by the relevant authority.
  • Obtain a liquidation letter or certificate from the liquidator to begin the process.

3. Notification of Relevant Authorities

  • Inform the relevant licensing authority (e.g., Department of Economic Development (DED) for mainland companies, or the specific free zone authority for free zone companies) about the decision to liquidate.
  • Publish a liquidation notice in at least two local newspapers (in Arabic and English) for public notification. This is required to allow creditors to come forward with any claims.

4. Settle Liabilities

  • Clear All Outstanding Debts: Pay off creditors and settle all financial obligations.
  • Close Bank Accounts: Cancel company bank accounts after ensuring there are no pending transactions.
  • Clear Employee Dues: Pay employees any outstanding salaries, end-of-service benefits, and provide them with a formal termination letter.
  • Cancel Utilities and Leases: Settle utility bills and cancel rental agreements.

5. Clearances from Authorities

  • Obtain clearance from relevant government departments, including:
    • Immigration (to cancel visas)
    • Ministry of Human Resources and Emiratisation (MOHRE) to cancel labor cards
    • Tax authorities (Federal Tax Authority) for VAT deregistration (if applicable)
    • Municipality or free zone authority clearances

6. Asset Distribution

  • Distribute any remaining assets among shareholders according to the memorandum of association (MoA) or applicable laws.

7. Cancel Trade License

  • Submit all required documents (e.g., clearance certificates, liquidation report, and board resolution) to the licensing authority.
  • Cancel the trade license officially, marking the company as closed.

8. Final De-registration

  • Obtain a de-registration certificate from the licensing authority.
  • Ensure all processes are documented and filed for future reference.

Key Considerations:

  • Timeline: Liquidation typically takes 2-3 months, depending on the complexity of the company structure and liabilities.
  • Legal Compliance: Adherence to UAE Commercial Companies Law and relevant free zone or offshore regulations is mandatory.
  • Tax Matters: Ensure that all tax returns are filed, and VAT registration is canceled if applicable.
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