Why Choose Our Company Liquidation Services in Dubai?
Business closure in Dubai can be as difficult as a startup. If not handled properly, the process can become time-consuming and complicated, with implications that may go beyond your control. At Capital Plus, we simplify the process by providing expert assistance to ensure an efficient and hassle-free liquidation.
Experience
With years of experience in company liquidation across Dubai free zones and mainland, we deliver efficient and reliable solutions tailored to your needs.
Local knowledge
We adhere to all free zone and mainland regulations to guarantee a seamless liquidation procedure.
Personalized Support
Every business is unique, and so are the services provided by Capital Plus. We personalized our services according to the unique needs of the business.
Cost-effective solutions
Cost-effective solution while considering the liquidation process challenging for the company. Guidance on how to keep the cost low while not compromising the quality of the service.
Why Is Liquidation in Dubai Critical When Closing a Business?
Hiring and liquidating a business is necessary to avoid future regulatory and legal complications. By seeking professional help from liquidating firms, you can reduce the risk and make the process efficient.
Legal consequences result in noncompliance penalties
Regulatory authorities may impose fines when a company disregards the legal procedures.
Unresolved Financial Obligations Lead to Debt Accumulation
Without the proper debt settlements, liabilities could continue to grow and impact the business credits.Further unpaid salaries can lead to disputes and legal claims.
Assets lose their value if not managed properly.
If the assets of a company do not liquidate in an organized manner, they may lose their value. This could potentially result in disagreements among the involved parties.
Delayed Business Closure
Improper liquidation can cause delays in deregistration while finalizing the closure process with relevant authorities. Further lingering business operations may result in an accumulation of rent, utility bills, and license renewal fees.
Types of liquidation
Compulsory liquidation
The court typically orders compulsory liquidation when a creditor doesn't receive payment. It occurs when the company is insolvent and unable to pay off its debts.
Voluntary Liquidation
The company's shareholders or directors typically initiate voluntary liquidation for various reasons. It depends on the wishes of owners to liquidate a company.
Company Liquidation Process in Dubai
The liquidation process differs significantly between companies located in free zones and those located on the mainland. Both types of liquidation come with their own specific requirements. Here is the detailed overview of the process of liquidation.
Shareholder’s resolution
Free zone companies
All the stakeholders would draft and approve the resolution in a meeting. For the free zone companies, the resolution must be submitted to the authorities of the free zone, such as JAFZA or RAKEZ authorities.
Mainland companies
The UAE national sponsor or agent must notarize the resolution for the mainland. If the shareholder is not present in the country, the UAE embassy and the ministry of foreign affairs must attest the document.
Appointment of a liquidator
The UAE laws mandate the appointment of a liquidator for a company’s liquidation.
Free zone companies
Keep in mind that the relevant UAE free zone authorities must approve the liquidator for the free zone.
Mainland companies
Appoint the liquidator and submit his formal acceptance letter to the relevant authorities.
Publication of the notice
Free zone companies
The specific authority of the free zone determines the publication of notices for companies operating within its boundaries. For instance, the free zone authority determines whether to publish notices in an official journal or in the local media.
Mainland companies
For mainland companies, the liquidation requires publishing a notice in two local newspapers, one Arabic and one English. The purpose of this notice is to notify the creditors that they have 40 days to present their claims.
Settling liabilities and clearing debts
In free zone companies
In free zones such as Dubai International Financial Centers (DIFC), the companies must follow the DIFC employment laws that include the final settlement and notice periods.
In mainland companies
For mainland companies, they must settle all their outstanding debts to creditors and suppliers. Additionally, it is mandatory to cancel any ongoing contracts.
Cancellation of Employee Visas and Work Permits
For free zone companies
In the free zone, companies’ employee visas are directly canceled by the authorities. This process includes the obtaining of the necessary No Objection Certificates that confirm that the company has settled all obligations related to its employees.
For mainland companies
For mainland companies, submit the visa cancellation form to the immigration department in order to terminate their residency permits. Additionally, the company must cancel the MOHRE labor cards. The company also needs to fulfill responsibilities related to the end-of-service benefits and any outstanding payments.
Submit a VAT deregistration application and tax clearance
For free zone companies
Some free zones impose additional regulations while considering the VAT deregistration process. Follow these rules to get the clearance certificate.
For mainland companies
For the liquidation of companies in the mainland, submit the VAT deregistration application to the Federal Tax Authority. Make sure all VAT payments are cleared; after that, the FTA will issue a Tax Clearance Certificate.
Clearance from the government authorities
For free zone companies
Some free zones required the additional NOCs from the authorities operating there, such as the internal custom authority.
For mainland companies
The next step involves getting clearance from the utility providers, such as water, electricity, and telecom. Additionally, the clearance from the RTA authority is required for the company vehicles.
Final liquidation report
For free zone companies
In the case of a free zone, the liquidation report is submitted to the free zone authorities such as RAKEZ, JAFZA, or DIFC. They will verify the report and company closure in the records.
For mainland companies
The final liquidation report that will be prepared by the liquidator will be submitted to the relevant regulatory authorities. For the mainland it is submitted to the Department of Economic Development (DED).
License cancellation and clearance certificate
For free zone companies
The relevant authority will follow the license cancellation for free zone companies.
The liquidation process will conclude thereafter. And the company no longer exists in the UAE’s records.
For mainland companies
After reviewing, the clearance certificate will be issued, which confirmed the liquidation of a company.
Documents Required for the Liquidation of a Company in Dubai
General Company Documents
- Trade license: Memorandum of Association (MOA) and Articles of Association (AOA).
- Certificate of Incorporation or Formation: Shareholder resolution approving liquidation (notarized and attested if applicable). Power of Attorney (if applicable).
Financial Documents
- Audited financial statements (up to the liquidation date).
- Bank closure statement or certificate confirming account closure.
Tax and Clearance Certificates
- VAT & CT deregistration certificate from the Federal Tax Authority (FTA).
- Clearance certificates from utilities and other service providers.
Employment and Visa-Related Documents
- Employee visa cancellation proof (for all employees under the company).
- Labor and immigration clearance certificates.
Free Zone-Specific Documents (if applicable)
- Clearance certificates from the respective free zone authority.
- Lease cancellation confirmation from the free zone.
Liquidator-Related Documents
- Liquidator’s appointment letter.
- Liquidation report prepared by the appointed liquidator.
Miscellaneous Documents
- Proof of settlement of outstanding debts or obligations.
- NOC (No Objection Certificate) from relevant authorities or stakeholders, if required. Company stamp (for cancellation).
Responsibilities of a liquidator
Identification of a company's assets:
The liquidator identifies the assets, such as property, equipment, and intellectual property.
Sale of the assets
These assets will then be sold to raise the funds for the debt settlements. The liquidator will ensure that these debts are paid in accordance with the importance of payment.
Clearance of Employee Dues
Liquidators are responsible for ensuring that all the employee dues are cleared before the company is officially dissolved.
Audit Report
The audit report is then prepared by the auditor detailing the liquidation process, such as asset sale, debt settlement, and clearance.
Our Service Areas in Dubai
Free Zone Areas
Our expertise covers Dubai’s major free zones, including:
- Dubai Airport Free Zone (DAFZ)
- Jebel Ali Free Zone (JAFZA)
- Dubai Multi Commodities Centre (DMCC)
- Dubai Silicon Oasis (DSO)
- Dubai International Financial Centre (DIFC)
- Dubai Healthcare City (DHCC)
- Dubai Internet City (DIC)
- Dubai Media City (DMC)
- Dubai Design District (d3)
- Dubai Production City (DPC)
- Dubai Science Park (DSP
Mainland Areas
Our expertise covers Dubai’s major mainland areas, including:
- Business Bay
- Deira
- Bur Dubai
- Sheikh Zayed Road
- Al Quoz
- Jumeirah
- Al Karama
- Dubai Marina
- Al Barsha
- Ras Al Khor
- Al Qusais
The top-rated Business Setup Consultancy in the UAE
Frequently Asked Questions
During liquidation the company ceased its operation and was no longer allowed to continue functioning.
Regarding the company debt during the liquidation process, the liquidators sell off assets to pay outstanding debt. If there are insufficient funds, some debt may remain unpaid, and creditors may not receive the full amount.
For the employee during the liquidation process, the company must settle all the employee dues; that includes salaries and end-of-service benefits.
The liquidation certificate is a final step indicating that the legal, financial, and operational matters have been handled.
If you are a creditor, you can file for the company liquidation in Dubai by taking legal actions through Dubai courts. In case of insolvency, the court will appoint a liquidator to handle the process.
There is no reverse to the liquidation process; you would need to go through the entire company formation process.
