A company who wishes to intentionally liquidate or wind up, needs to follow a due process as provided by the Law. This is to help alienate bad practice where company owners exit the country without settling huge debts they owe to customers, creditors, employees and banks.
If you are a business owner who wants to wind up your company, you need to appoint a company liquidator who carries the burden of legally winding up your company. This blog post is to familiarize you with the necessary steps and expectations linked with the process of company winding up in Dubai.
Why do Companies Wind Up?
There are several reasons why companies may voluntarily choose to wind up a company but here are few top reasons why business owners wind up their companies;
- The company is constantly suffering financial stress
- Increase in Debt rate
- Massive or constant loss of profit
- Purpose of the business is achieved
- Changes in market conditions
- Products no longer demanded in the market
And a host of other reasons.
Pivotal Steps in Winding Up a Company
- A resolution passed by the shareholders of the company
- Have the resolution notarized by the notary public
- Appoint a liquidator or a licensed audit firm to carry out the winding up
- The liquidator is to accept and present an acceptance letter
- The documents as mentioned should be submitted to the appropriate authority
- Broadcast a notice of winding up in a public newspaper
- If you are a foreigner, get clearance from the UAE immigration
- Clearance from the Labor department
- Clearance from customs
- Get your bank to issue you a bank account closure
- Get clearance from Electricity and water authority, RTA and the likes
- Have the final liquidation report along with the clearance letters submitted
- The licensing authority will then issue you a cancellation certificate and the company is removed from the Registrar
What Documents do you Need for Company Winding Up
- The company’s original trade license
- Original establishment card
- Bank account closure letter
- Original share certificate
- Original certificate of registration
- Original memorandum of association
- Company stamp
- Original lease agreement
- Corporate account statement
- The company’s E-Sign card
The process of liquidating a company in Dubai has more steps like de-registration of value-added tax and ESR notification, and report filing before liquidation. All these processes can be tedious and complicated which is why it is advised for you to appoint a liquidator to take care of the whole process.
As a leading corporate firm, you can contact us for more information on liquidating a company in Dubai, you can reach out to us for a free consultation.
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We at eLegal Consultants look forward to meeting you and are ready to have a hitch-free journey with you to actualize your dreams. Contact us today!