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Mainland Company Liquidation

Mainland Company Liquidation

Closing a business in the UAE involves a series of legal steps to ensure all obligations are met and to avoid potential fines. Whether you’re winding down a sole proprietorship or a shareholding company, understanding the process of canceling your business license is crucial. 

At Farahat & Co., we understand that the decision to liquidate a mainland company in the UAE is a significant one. Our dedicated team of experts is here to guide you through every step of the process, ensuring a smooth and compliant dissolution of your business.

Understanding the Need for License Cancellation

Canceling a business license is a critical step when shutting down operations. This ensures that government authorities are aware of the cessation, preventing the accrual of fines and penalties on an expired license. For those in a partnership or shareholding structure, it’s essential to settle all financial responsibilities to safeguard personal interests and maintain the integrity of one’s investment. Additionally, preserving your professional reputation is beneficial for any future business ventures you may consider. This proactive approach to finalizing business affairs reflects responsible management and foresight.

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mainland liquidation

Step-by-Step Formalities for License Cancellation

The procedure for license cancellation varies based on your company’s structure:

Company StructureCancellation Procedure
Sole Proprietorships and Establishments- Apply for cancellation through the DED in Dubai or TAMM in Abu Dhabi. 
 - Obtain clearances from:

  • The Ministry of Human Resources and Emiratization,
  • Directorate of Residency and Foreigners Affairs, 
  • water and electricity authorities, and 
  • leasing entities.
Shareholding Companies- The process involves share liquidation, debt collection, and creditor payments before finalization with DED.

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UAE Mainland liquidation

Freezing vs. Terminating a Trade License

Here are some aspects to compare Freezing a Trade License & Terminating a Trade License

  • Definition
  • Duration
  • Business Activities
  • Fees
  • Extensions
  • Future Operations
  • Legal Obligations
  • Governmental Approvals

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Liquidation

Steps to liquidate a Mainland Company in UAE

Stage 1: Initiation of Liquidation

    • Notarization of General Assembly Minutes: Document the decision of liquidation and the appointment of a liquidator in notarised minutes.
    • Liquidator’s Official Acceptance: Obtain a formal letter from the chosen liquidator, confirming their acceptance of the role.
    • Application for Cancellation: Fill out the necessary forms through the Department of Economy and Tourism (DED) or other approved channels.
  • Issuance of Liquidation Certificate: Await the DED’s issuance of a liquidation certificate.
  • Publication of Liquidation Notice: Publish the liquidation announcement in two local newspapers, initiating a 45-day grace period for debt claims.

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