Company Liquidation in World Trade Centre (DWTC) Dubai is a formal procedure that ends the legal existence of a company in the DWTC free zone. The procedure is regulated by UAE Federal Law No. 2 of 2015 and DWTC-specific regulations.
This article thoroughly explains the process of company liquidation in Dubai World Trade Center, the prerequisites required to meet, and the relevant steps to avoid incurring penalties and ensure compliance.
In DWTC, the company liquidation process is guided by the UAE Federal laws and the directives of the DWTC Free Zone Authority. The Dubai Department of Economic Development (DED) is in charge of the deregistration of mainland entities, but free zone companies are governed by the DWTC Authority.
In instances of compulsory liquidation, the UAE courts intervene, notably during the cases of creditors who bring actions for their debts exceeding the statutory minimum.
Failure to comply with the laid-down liquidation procedures may attract harsh penalties such as daily fines and travel restrictions imposed on shareholders.
This is the procedure established by the courts, most commonly in cases where creditors petition for debts unpaid totaling more than 100,000 AED or in scenarios where audits have not been submitted as required by the Ministry of Economy.
A liquidator is named by the courts; it usually takes about 6 to 12 months to finish the procedure.
Also read: Voluntary Liquidation in UAE
Pre-Liquidation Preparation:
The shareholders pass a notarized resolution to liquidate the company and at the same time appoint a liquidator.
The resolution must cite the reason for liquidation and also mention the signed liquidator.
Collect the original trade license (if it has expired, renew it).
Draft any amendments for the MoA (if needed).
Obtain Emirates ID and passport copies of each shareholder.
Arrange a third-party financial audit to find out the solvency status of the company.
The directors of SVL must sign the declaration of solvency that confirms the company can pay its debts within a year.
Official Notification:
It is necessary to publish a liquidation notice in two newspapers (one in Arabic and one in English), like Al Bayan and Gulf News.
This action commences 45 days after which the creditors can submit their claims.
The liquidation intent needs to be filed with the DWTC Free Zone Authority and DED.
The required processing fee (about 2,500 AED) must be paid.
Debt Settlement and Asset Distribution:
The liquidator is responsible for validating creditor claims and orchestrating the auction or sale of assets.
Secured creditors are the first to be repaid; the leftover amount goes to shareholders.
Employee dues, visa cancellations, and end-of-service benefits must be paid by the UAE labor law.
The final audited financial statements should be submitted to the DED.
Deregistration:
To deregister the company, it is key to first settle all utility bills (DEWA, telecom) and present bank closure certificates.
Cancel all visas that are linked to the company.
You are to get a No Objection Certificate (NOC) from the DWTC Free Zone Authority.
After auditing the company, the DWTC gives a closure certificate within 10 working days, officially closing the company.
The process of company liquidation in Dubai World Trade Center requires careful planning, adherence to legal and regulatory requirements, and timely action. By following the outlined steps and ensuring all requirements are met, businesses can avoid penalties and ensure a smooth exit from the DWTC-free zone.
Early preparation, professional guidance, and clear communication with stakeholders are essential for a successful liquidation process in the Dubai World Trade Centre.
Contact us today, and we shall be glad to assist you.