Company Liquidation in UAE: Why Proper Business Closure is Important
Turning of tables is a usual thing in the business, every moment is decision making and among those decision closing operation of the business can also be the one. In United Arab Emirates to keep the records in track once you think about quitting the business operations do it properly and know all the requirements of the company liquidation in UAE in order to keep the futures planning accordingly.
In United Arab Emirates, business operations are being carried out in two zones, Mainland and Free zones. It can be a Mainland Company in Dubai (DED), Abu Dhabi (ADDED), IFZA, RAKEZ, JAFZA, DAFZA, Meydan or Free Zone Entity in DMCC. Every entity has their set of rules for the company liquidation, which are important to be followed properly and accurately to keep things and future issues in order in the UAE.
What is Company Liquidation in UAE?
Company liquidation is an official announcement of closing the company operations by applying all the legal requirements, such as:
•Shareholder Decision Of Liquidation
•Appointment of a Liquidator
•Visa Cancellation of The Employees
•Closure of Financial Institutions
•Clearance Of Government Liabilities (Electricity, Water, Municipality, Telecommunication, Internet Services, etc.)
•Liquidation Report by an Authorized Auditor
•Trade License Cancellation
•Deregistration of FTA
After involving through all the above listed processes (which are subject to change by ongoing circumstances of the time) the concerned authorities will issue liquidation letter of the company which will be applicable accordingly.
Why Company Liquidation is Important in UAE.
Suppose, you are no longer interested in what you are doing, or your circumstances are not letting you to continue your business, and your name is used throughout the company documents, here comes the complication. The complications of Utility bills, Banks, Labor Departments, Immigration Department, and Municipality and so on, let me give you a little more detail, as you can fully understand the importance of the liquidation to keep your future and name safe and in order.
Avoiding Company Liquidation In UAE May Cause:
Government Issues
All the authorities involved in making a business legal and active, if not notified of the closure of the business may keep issuing the warnings and penalties which can affect the legal residency issues in the UAE.
Residency Visa Complications
Active records in Immigration department like Establishment Cards, Family Visas, Employees Visas, or other immigration services linked to company may result in heavy fines.
Travelling Outside UAE Issues
Active records under fines and complications may cause a travel ban until the issues are settled.
Banking and Regulatory Risks
Unattended Financial matters like bank accounts, and linked services may result in heavy monthly fines.
Formal Liquidation Benefits:
Formal liquidation of the business on business entity helps businessman and shareholders to avoid any unwanted future exposure relating to:
•Outstanding Liabilities Of Financial Institutions
•VAT or Tax Matters Of Federal Tax Authority
•Employee Claims In Labor Courts
•Regulatory Authorities Penalties
•Contractual Disputes of the Availed Services
Mainland and Free Zone Company Liquidation in UAE
The liquidation process carries out by the jurisdiction and company structure. Mainland company’s liquidation involves coordination with DET, ADDED, MOHRE, immigration authorities, and FTA.
Free Zone liquidation procedures differ between authorities such as DMCC, IFZA, Meydan Free Zone, RAKEZ, JAFZA, DAFZA, and Dubai South, but most require:
•Visa Cancellation From Immigration & Labor Department
•Clearance Letters From Municipality, Electricity and Other Services
•Lease Termination Attested By The Authorities
•Liquidation Report By The Authorized Auditor
•Original company documents
Required Time Period Company Liquidation in UAE?
The timeline depends on the issues related to the company matters, on average:
•Liquidation of Free Zone Companies May Take 6 Weeks To 8 Weeks (Subject to the availability of Asked Resources)
•Mainland Company Liquidation May Take 4 Weeks To 6 Weeks (Subject to the availability of Asked Resources)
Professional Liquidation Services in UAE
Looking for the liquidation process of your company in UAE, in Mainland or Free Zone of any Emirates in The United Arab Emirates, our corporate services professional team with the set of well experienced professionals can minimize all your troubles through their communication and working experiences with related authorities whose coordination will help you in the liquidation process of your business.
Proper closing of inactive companies and businesses helps you in fast tracking and maintaining your compliance records with acting authorities all over the UAE to get you access in all the available services of your interest.
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