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Liquidation in UAE: Frequently Asked Questions

Liquidation is a radical solution when your company is going through extreme financial difficulties. Because there are so many options available, it is always best to get the right liquidation advice to make the best decision for your company.

To assist you in making the ideal decision, our experts from Farahat & Co answer the six most frequently asked questions about company liquidation in UAE.

What Can I Expect to Get Out of a Liquidation Consultation?

During the consultation, our expert will analyze your current scenario and help you determine if liquidation is the ideal option for you. If yes, you will be explained the process as well as the pre-requisites.

Finally, you will be given an estimated cost for availing of the liquidation services from Farahat & Co and explained the next steps you can take to proceed.

What is a Liquidator Report and Is It Necessary?

This report contains details about any exchanges in terms of company property and transactions or preferential payments which resulted in the company’s poor financial standing. It gives an overview of the affairs of the organization, its financial journey and whether misconduct or unlawful activity had taken place by the directors in a span of 3 years and recommends to the official legal receiver whether there is a need for any further investigations.

The authorities demand a liquidator report of the business before cancelling the trading license. Thus, this report is crucial in determining whether the company gets approval for liquidation in the UAE.

How Long Does It Take to Liquidate a Company in UAE?

On average though, taking into account the notice period which is 45 days, it takes around 60-90 days to liquidate a company in the UAE.

However, in any of the cases, it is essential to realize that the way to ensure a proper liquidation is to hire a knowledgeable and reliable expert so that the paperwork and all the necessary steps are taken care of as quickly as possible. Working with a well-reputed company such as Farahat & Co is key to aiding the process.

What is the Liquidation Procedure for Closing a Company in UAE Mainland?

Closing a mainland company requires that all partners be available in the same country (or a Power of Attorney is approved and attested and signing of the Shareholder Resolution to close or wind up the company).

Next, an application needs to be submitted to the Department of Economy (DED), and the following steps must be carried out.

  1. Closing of Company Bank Account
  2. Immigration Clearance
  3. Obtaining of Clearance Letter from Ministry of Customs and Chamber of Commerce
  4. Paying off all Rent Dues and Getting a Clearance Letter
  5. Obtaining Final Bill from DEWA or ADDC
  6. Confirmation of Terminated Utilities
  7. Filing of Notification in Newspaper/Gazette Publication
  8. Selling or Transfer of Assets
  9. Liquidators Report
  10. Confirmation Certificate of Termination and De-Registration
  11. What are the Steps Involved in Free Zone Company Liquidation?
  1. Shareholder Resolution or Signed Board
  2. An Official Notification Provided to the Free Zone Authority
  3. Obtaining NOC’s and Clearance Letter
  4. Cancelling of Employee Work Visas and Sponsorship
  5. Official Notification Given in Arabic Newspaper/Gazette
  6. Termination Certificate
  7. Closure of Corporate Bank Accounts
  8. How Do I Cancel My Business or Trade License in UAE?

To cancel a sole proprietorship, here are the steps involved:

  1. Clearance from Ministry of Human Resources and Emiratization
  2. Clearance from Directorate of Residency and Foreign Affairs
  3. Clearance from Relevant Water and Electricity Authority
  4. Valid NOC from Ministry of Labour and Social Affairs
  5. Leasing Entity

Want to know how to cancel trade licenses for free zones? Read here!

Looking to Avail the Best Liquidation Services in the UAE?

Closing down a company can be an overwhelming thing as it is, but the process shouldn’t have to be. Farahat & Co brings with it years of experience and a myriad of liquidation client success stories in the UAE!

With proficient and skilled experts, you are sure to get peace of mind and a smooth liquidation experience.

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