Whether the type of business you own in the UAE is an LLC, Partnership, or Sole Proprietorship, cancelling your LLC trade license and all the permits related to it is an essential aspect to consider when making the decision to close a business down.
Importance of LLC Trade License Cancellation in UAE?
The reasons for trade license cancellation in UAE can be bankruptcy or the decision of the shareholders to step back and shut down the company (liquidation).
Furthermore, according to Federal Law No.2 of 2015, articles 306 to 326, it is valid to dissolve a company for the following reasons; its duration has expired, it has completed its objective, and it has lost all or most of its assets.
It is also equally crucial that all the related government authorities know that your company is no longer in business so that fines and penalties that are incurred when the license isn’t renewed are avoided.
Steps for LLC License Cancellation in UAE
Cancelling an LLC trade license is a comprehensive two-step process and involves the following:
- Begin by passing a resolution for dissolution which involves preparing notarized minutes of the general assembly confirming that the liquidation of LLC company has been done and a liquidator has been appointed.
- A registered liquidator needs to provide an official letter confirming that he has accepted the duty.
- Application for cancellation must be undertaken by filing the Department of Economic Development (DED) form or through other approved mediums.
- Issuance of a liquidation certificate by the Department of Economic Development (DED).
- Publishing of notice of liquidation in two local widespread daily newspapers, one issued in Arabic and the other in English.
- A grace period of 45 days from the date of issue is provided by the notice to the debtors to submit their claims.
- After the notice period is complete, a liquidation report needs to be submitted by the company.
- The liquidator and the partners need to submit a declaration letter to the Department of Economic Development (DED), specifying that no objection exists from other parties during the grace period.
- Get clearance from all government authorities. These government authorities include the ministry carrying out cancellation, immigration, banking, water and electricity.
- Cancellation of the firm or establishment card at the Ministry of Human Resources and Emiratization.
- Cancellation of the foreign partners’ visa sponsored by the company at the respective General Directorate of Residency & Foreigners Affairs.
- Get approval for final cancellation by submitting all the above-mentioned documents.
- Department of Economic Development (DED) will then determine the fees for the LLC trade license cancellation, after which you can pay the requested fees and receive the certificate of de-registration or cancellation.
Documents Required for Liquidation Process in UAE
- Copy of License
- Power of Attorney (if any)
- Copy of the Memorandum of Association (MOA) with complete alterations.
- Resolution of shareholder
- Emirates ID
- Shareholders Passports
- Application Form that is Filled for Trade Cancellation.
Cancelling a trade license or company liquidation in Dubai is an important decision and one that requires the assistance of an expert throughout the entire process. An error in obtaining approval from several government entities can increase your risk of significant fines when winding up your LLC company.
At Farahat & co, our experts have helped several companies by serving as liquidators, curating well-prepared liquidation reports and accomplishing legal documentation for trade license cancellation for LLC in Dubai and all-around UAE.