No matter what type of company in Dubai, you must properly cancel your business license. If you are a shareholder of a limited liability company (LLC) in Dubai, you need to follow a more complex liquidation process.
Why to properly cancel a business license?
If you want to close your company in Dubai, it is important to let all relevant authorities know that you are no longer in business. If you do not start a license cancellation process, you will have to pay huge penalties for not renewing your business license.
If you are a shareholder in a company, it is important to discharge your liabilities towards creditors and partners and protect your interests and shares. It is also wise to put your goodwill and business reputation in perspective. You never know if you may open another business in the future.
A large part of closing a business in Dubai deals with the final compensation for the employees. The sole owner or the shareholders of the company will have to cancel the employee visas and work permits. It is also necessary to formally cancel any subscribed utilities, including DEWA, Etisalat and Du as well as to terminating your office or warehouse lease.
How to cancel a license in Dubai?
The license cancellation process depends on the form of your company. For establishments and sole proprietorships, the cancellation process is simple. All you need to do is to apply for cancellation through Department of Economic Development (DED) and acquire all relevant clearances from:
• Ministry of Human Resources and Emiratisation
• Directorate of Residency and Foreigners Affairs
• the relevant water and electricity authority
• the leasing entity etc.
However, for companies with shares, the process is more complex. You need to do a proper liquidation, including liquidating the shares, collecting the debts and paying creditors etc.
You need to do a company liquidation and appoint a liquidator, if the legal form of your Dubai company is one of following:
• General Partnership
• Limited Liability Company
• Simple Limited Partnership
• Public Joint Stock Company
• Private Joint Stock Company
How to liquidate an LLC in Dubai?
The liquidation process for the above-mentioned companies with shares will most likely include the following steps:
• Cancel all existing employee visas and work permits, if any
• Board of Director Resolution/General Assembly for company liquidation and appointment of a liquidator, attested from the notary public
• Letter from the liquidator accepting the duty
• Application for company liquidation and fees payment at DED
• Liquidation advertisement in two local Arabic newspapers
• 45 days waiting period to check if any client has financial claims against the company
• Present DED with the original newspaper ad and final audit report
• Confirmation of the liquidator and partners that there was no objection/claim from any third party during the 45 days period
• Cancel all partner visas, if any
• Get all relevant clearance letters from Ministry of Labour, DEWA, Etisalat, Du etc.
• Submit all documents to DED
• Pay additional fees at DED and receive company liquidation certificate
It is important to properly close an LLC in Dubai to avoid high penalties. It is also substantial to liquidate your Dubai LLC to avoid visa problems and liability issues in the future.