Liquidating a Limited Liability Company in the UAE is a mandatory process. During the instance of bankruptcy, loss in capital or share value, financial fraud, or any misrepresentation of funds, etc., the company will be forced to liquidate its operations in the region.
UAE is a land of opportunities, and many companies are getting registered daily in the country. The business infrastructure in the region is top-notch. However, some businesses due to their nature of business operations, or industry downturn, experience financial difficulties.
At a certain stage, it becomes challenging for the business owners to continue their business operations. This article highlights the steps in liquidating an LLC Company in UAE. Company liquidation can proceed with the help of an expert Business Consultant such as AURION to avoid any challenges or incur penalties for non-compliance.
Our team of expert Business Consultants will facilitate the complete process of liquidating an LLC Company the right way. The team will ensure all the clearances are in place and the Trade License Cancellation Certificate is obtained at the earliest.
What are the steps in the Liquidation of an LLC Company in Dubai?
There are certain steps to follow while liquidating an LLC Company in UAE. The company liquidation procedures are almost similar across Emirates where the Limited Liability Company is registered. The respective Department of Economy of the Emirate outlines the company liquidation processes to follow.
In this article, let us have a look at the company liquidation process of an LLC Company in Dubai. It is the Department of Economy and Tourism that governs the operation of an LLC Company.
Company Liquidation Process in Dubai for an LLC Company
The company liquidation process follows certain steps that the investor must follow. It will help them in successfully liquidating the company.
Firstly, in the case of a Limited Liability Company, all shareholders must collectively conduct a board meeting and prepare a resolution for proceeding to close or liquidate the company. Notarize the board resolution and submit it along with the liquidation form to the Dubai Economy Department.
1. Obtaining the Liquidation Notice for an LLC Company in Dubai
Also, the company must appoint an authorized auditor/liquidator for clearing the accounts with creditors and other parties. Submit the required documents to the DED for obtaining the Liquidation Certificate.
Expert Business Consultants at AURION will guide you in the complete process of preparing board resolutions, appointing a liquidator, etc. Furthermore, the Consultant will coordinate with Dubai Economy, Dubai Courts for clearances, and other government departments for visa-related clearances, and other approvals for initiating the company closing process.
Publish the liquidation notice in two regional newspapers. There is a 45-day window for the debtors to submit their claims for clearance. The company is liable to clear all its dues before the liquidation is approved by the authorities.
2. Obtaining the License Cancellation Certificate for an LLC Company in Dubai
So, after the publishing of the Liquidation notice and completing the notice period, notify the DED through a declaration letter. Clear all the outstanding debts and payments.
Also, get approval from the government bodies to cancel the trade license. Terminate the Etisalat, electricity, and water connection, any other membership, etc.
The company must cancel all the visas of the employees and settle their dues in full. Proceed to cancel the company establishment card and submit all the required documents to get approval for the final cancellation.
Make the required fee payment and obtain the Trade License Cancellation Certificate. So, the LLC Company is liquidated as per legal records. Once, the License Cancellation Certificate is issued, the company cannot conduct any business activities and must close down all the business operations.
Are the Shareholders of the LLC Company required to be present for initiating the Liquidation Procedures?
To liquidate an LLC Company, all shareholders must be present for the board meeting physically or via online in case the shareholders are in different countries.
They have to collectively agree to liquidate the company and decide on the re-distribution of the shares and the losses incurred among them. Also, they must collectively agree to support the liquidation process and settle all the creditors, suppliers, government organizations, and more.
The board resolution must be passed and approved by all the shareholders of the LLC Company. Additionally, it must be notarized by the notary public and submitted along with the company liquidation form to the Dubai Economy and Tourism Department.
So, answering the question, of whether the Shareholders must be physically present for the company liquidation process, the answer is not required. Their involvement is in the initial stage where the board resolution is prepared.
Furthermore, the business Consultants will coordinate on behalf of the company owners for closing the company. They will facilitate the process of the company closing effectively so that the trade license is canceled the right way and the shareholders can exit and re-enter UAE without any hassle.
What is the role of Business Consultants in Liquidating the LLC Company in Dubai?
Seeking the assistance of an expert Business Consultant from the beginning of the LLC Company Liquidation is helpful in many ways. They will coordinate the complete process of closing the company the right way.
From the beginning of the company liquidation process, the role of Business Consultants is important. They will prepare the board resolution, get it signed by shareholders, get the document notarized, and submit it to the Dubai Economy and Tourism Department authorities.
Furthermore, the Business Consultants will help in getting clearance from the Dubai Municipality, visa cancellation, other clearances from the Customs Department, banks, and Utility providers, and more.
So, in a nutshell, the process of liquidating an LLC Company in Dubai involves many steps. By seeking the assistance of efficient Business Consultants, the company owners can proceed with the Company Liquidation the right way.