With Dubai and Abu Dhabi at the forefront, the UAE has become a regional business center. However, in certain cases companies can face difficult financial situations or the shareholders decide to take their business elsewhere. This calls for the company liquidation proceedings to be initiated. This procedure will depend on the company’s financial status at the moment of the commencement of the process. Company liquidation in Dubai can also be referred to as trade license cancellation in case the owners decide to shut down their operation in the Emirate.
Types of company liquidation in Dubai
As mentioned above, a Dubai company can be dissolved voluntarily or when it can no longer pay its debts. The Company Law provides for two types of company dissolution procedures in Dubai:
- voluntary liquidation;
- compulsory liquidation.
Our company formation agents in Dubai can offer more information about company liquidation procedures under the Commercial Law.
The company dissolution procedure in Dubai
Voluntary or compulsory company liquidation can be requested by the shareholders or the creditors in Dubai. The shareholders will hold a meeting during which a resolution must be passed for the procedure to begin, in the case of voluntary dissolution. During the same meeting a liquidator must be appointed. In the case of compulsory liquidation, the procedure will begin by court order.
The company’s legal representatives will be required to file the following documents with the Dubai Trade Register:
- the document stating the dissolution of the company and the appointment of the liquidator;
- a certified copy with the signatures of the company’s directors and liquidator attesting to the liquidation;
- the company’s certificate of registration and its trade license;
- a copy after the liquidator’s license accompanied by a letter stating the approval of the liquidation.
A key aspect no matter the type of company liquidation procedure is that the Dubai company must append the terms ‘in liquidation’ to its trade name.
Trade license cancellation in Dubai
Once the company winding-up process is begun, the business must also be erased from the Dubai Trade Register and have its commercial license revoked. The following documents will be filed in order to complete this process:
- the final account related to the assets liquidated during the process approved by the shareholders or by the liquidator;
- a no-objection letter stating the approval of the cancellation of the license issued by the Ministry of Labor;
- the statement on the company dissolution and nomination of the liquidator;
- a visa revocation for foreign partners, in case they were sponsored by an UAE national.
For assistance with the company liquidation procedure, do not hesitate to contact our representatives in Dubai.