Company Deregistration & Liquidation Services In Dubai & The UAE
UAE Company Liquidation & Deregistration
Although both serve the purpose of closing down the business, the ways, procedures, documentary requirements, time frame for both the processes are different. However, ultimately it is important that proper procedures are followed by the company to avoid legal implications and penalties.
What is Business Deregistration?
Deregistration is the process of cancelling the business or license of the company or in other words “de-registering a company which was previously registered from the registry of the licensing authority”. De-registration is more of a practical approach formulated by the licensing authorities for companies which are solvent and have completed the objective for which they have set up.
The whole de-registration process is comparatively quicker than liquidation and basically involves the shareholders of the company carrying out a couple of procedures and steps.
Business Deregistration Process in The UAE
The Department of Economy & Tourism (DET) in the mainland and the relevant Free Zone Authority in free zones are the licensing authorities which issue the procedures and documentary requirements for the deregistration of a company in the UAE.
Mainland Company Deregistration
Free Zone Company Deregistration
On completion of the relevant procedures and submission of documents, the licensing authority issues the De-registration or Cancellation Certificate- which means the Trade License issued to the company has now been cancelled.
Liquidation of a Company in The UAE
Federal Decree-Law No. 32/2021 On Commercial Companies (the Commercial Companies Law) deals with the liquidation of a company in the UAE. As per the Commercial Companies Law, liquidation can be either voluntary or compulsory (through a court order).
- Voluntary liquidation is when the partners of the company agree to dissolve the company and agree on the method of liquidation, name of the liquidator, etc. The assets of the company being liquidated will be divided among all the partners upon payment of all outstandings and debts.
- Compulsory liquidation is when creditors seek court intervention for the closure of the company due to financial struggles. The court can mandate liquidation of the assets of the company to settle the debts and appointment of a liquidator directly or through a resolution by the shareholders.
James Berry & Associates Licensed Liquidators
Licensed audit firms are normally appointed as liquidators. Liquidators play a responsible role and are normally required to evaluate the assets and liabilities of the company prior to making an asset sale, correspond with the creditors properly and update them on the liquidation steps being taken, distribute the assets properly to achieve payment of debts, and prepare the liquidation report confirming all procedures have clearly been complied with.
James Berry & Associates Law have years of experience with handling company de-registration and liquidation. Be it a free zone company or a mainland LLC, our lawyers are competent and experienced to handle the process in a very seamless and compliant manner. We work with regulated and experienced auditors who assist our clients with the liquidation process.
Company Deregistration & Liquidation FAQs
How long does the liquidation process take in the UAE?
Can I liquidate a company with outstanding debts?
What are the costs involved in liquidation and deregistration?
What happens if a company is not deregistered properly?
If a company is not deregistered properly, the shareholder(s) are still liable for any debts, financial obligations, liabilities, and fines imposed by the licensing authorities. You may also need to watch out for possible legal action by creditors and also anticipate an impact on any future business in the UAE.
Are the procedures different for free zone companies?
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