It is one of the sad parts of a venture when there is no way to go but simply close the business because of a number of reasons. It can be because the company has suffered bankruptcy, it has been involved in a serious offense, mishandled by owners, or the owner himself does not think it is worth his time to continue it further. But the usual reason is the first one.
There are things that business owners should take care of when they have decided to end their business (compensation for employees, a collection of receivables, etc.) in Dubai Mainland. Aside from canceling the other permits and visas of their employees, the Dubai Mainland License needs to be canceled as well. This requires certain documents and approvals from concerned authorities, and this depends on which kind of business license you are holding.
Why Do You Need to Cancel Your License When You Close Your Business?
Once a company has registered itself as a legal entity to the concerned authority of its location, it is expected to meet the government’s requirements regarding its duties and responsibilities as a legal entity. This is why the government fines any business that does not renew its license annually. And because this is part of the rules and regulations of the government, a business will still be fined even if it declared that they are already closed. This is why it is essential to cancel Dubai Mainland License and any permits that are related to the company so it is not to be fined because they are not renewing them at the right time. Having your license canceled means that the registry with the names of all the businesses in the United Arab Emirates (UAE) will not have your company’s name on it. This will sustain your company to trade under that name.
When the government is aware that you have closed down your business and have canceled your licenses, you will dodge a lot of fines and penalties that could accumulate because of the non-renewal of your license.
How to Cancel Trade License in Dubai
It is quite easy to cancel your license but it still depends on what form of company you possess. The establishments and sole proprietorships have it easy because of the simple process that they only need to do, which is to merely apply through the Department of Economic Development (DED) for the cancellation of their business.
There are clearance forms that should be obtained and completed from concerned departments, such as the following:
- DEWA or any relevant water and electricity authority
- Ministry of Human Resources and Emiratization
- the leasing entity etc.
- Directorate of Residency and Foreigners Affairs
On the other hand, a company liquidator is needed for those companies that have shares. Since the liquidator needs to collect the debts, liquidate the shares, and pay off creditors, it is indeed lengthier than normal. These are all needed to be done before the business owners can finalize everything about their business with DED.
A liquidator is needed to be appointed in the event that the legal form of a company is any of the following:
- Limited Liability Company
- Public Joint Stock Company
- General Partnership
- Simple Limited Partnership
- Private Joint Stock Company
Read More : The Process for Deregistering a Company in UAE.
Steps in Dissolving These Kinds of Companies
The following below is a general guide to dissolving a company that has any of the above-mentioned legal forms. The only exception to this is civil companies.
There are two stages that are involved in this kind of process. A company deregistration consultant can help you out with the aforementioned steps and the following ones.
- Minutes of the general assembly that contains the information about liquidating the company and appointing a liquidator. It should be prepared and notarized.
- An official letter that has the confirmation of a registered liquidator stating that he is accepting the duty should also be prepared.
- A cancellation application with the required form should be applied through DED or other concerned authorities.
- A liquidation certificate will then be issued by DED.
- Notice of liquidation of your company will then be published in two local newspapers.
- The debtors (company or its owners or shareholders) are only given a 45-day grace period to submit their claims from the issuance date.
- A declaration letter from the appointed liquidator of the company and its partners should be prepared. This declaration letter contains the statement that during the grace period, there is no objection whatsoever from any other parties. This letter of the declaration is then submitted to DED.
- The required approvals in canceling a license should be obtained from concerned governmental departments.
- The firm card will then be canceled at the Ministry of Human Resources and Emiratization.
- The visas of the foreign partners that are sponsored by the company that is being liquidated will also then be canceled at the General Directorate of Residency and Foreigners Affairs.
- The deregistration certificate will be received when the fees are already paid.
Top Company Liquidation in Dubai
There are a number of documents and approvals that should be prepared and obtained, respectively, when deregistration is in place. This is why it is important to have a consultant on your side to do those jobs for you so you will only have to provide the documents that are needed from you and simply wait for it all to be done.
For more than 30 years, Farahat & Co. has been in the liquidation industry. We are one of the top company liquidators in Dubai, and that simply gives you an assurance that we only give quality services to our clients, nothing less. We can answer any question that you may have the sleeves that can help you in dealing with your cancellation or the legalities that it ensues.
You can find out for yourself if we are indeed one of the best in the country by booking a consultation with us today.