Liquidation/Insolvency
A trade license is the most important document for a business to establish and run in the UAE, at the time of liquidation/winding up of a company, the trade license needs to be canceled as per the regulations governing the closing of a company.
When any business of a 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 this purpose, liquidators are appointed either by the Court in case of bankruptcy or by the stakeholders.
The cancelation of the license begins when the company passes a resolution for the dissolution of the company and appoints a liquidator. The above-mentioned resolution needs to be notarized.
All the legal documents like MOA, Trade license, Shareholders’ passport, and EID are submitted to the Department of Economic Development and a liquidation certificate is issued which is proof that the company has started the procedure of closing down of the company. After receiving the liquidation certificate, the company is required to get an advertisement printed in the newspaper. Limited Liability Companies are required to publish two advertisements in the Arabic Language. A 45 day notice period is provided to the company.
During the notice period provided, it is mandatory that the company obtains clearance from all the government authorities. 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 in order to cancel the trade license of the company.