Liquidation/Insolvency
When any business or company is going bankrupt in the UAE or the stakeholders decide to close the company due to any other reason, the company goes into liquidation. For the purpose of liquidation of a company, liquidators are appointed either by the Court in case of bankruptcy or by the stakeholders.
As a trade license is an important document for a business to establish and run in the UAE, at the time of liquidation, the trade license needs to be cancelled as per the regulations governing the closing of a company.
The cancelation of the license begins when the company passes a resolution for the dissolution of the company in the stakeholders’ meeting. The above mentioned resolution needs to be notarized as In The Case Of Limited Liability Company. If the establishment is a sole proprietorship, the notary of the resolution for dissolution of the company is not required.
Apart from the passing of the notarized resolution, the liquidators should also be appointed and the name of the liquidators along with their addresses should be mentioned in the resolution passed.
The following documents are mandatory for the liquidation of the company:
All the above mentioned documents are submitted to the Department of Economic Development and a liquidation certificate is issued which is a proof that the company has started the procedure of closing down . After receiving the liquidation certificate, the company is required to make an advertisement printed in the newspaper. Limited Liability Companies are required to publish four advertisements in the Arabic Language. A 45 days’ notice period is provided to the company.
During the notice period provided, it is mandatory that the company obtains the clearance from the immigration department, from the labor department, from the water and electricity departments, from the Telecom Authority, from the landlord and the bank account closure letter which is issued by the bank.
At the completion of the notice period, the liquidation report along with the newspaper advertisement should be submitted to the Department of Economic Development. ARC Associates help the businesses in the finalization of the liquidation report and assist the business in all the legal and compliance formalities to be completed at the time of liquidation.