The UAE company registration dissolution is often considered as the last act in a business trip. What about when the owners want to come back to the market, find an asset they want to redeem or find that the company could still be useful? Is the UAE law that allows for a company to be ‘reactivated’ after being liquidated?
In certain cases, a company could be a candidate for restoration or re-registration. But a firm that has gone through the liquidation process and is a formally dissolved company can’t just re-issue their old trade licence and get back to business. The route which is accessible will vary according to the legal status of the company, who registered it and to what extent the closure was complete.
By Identifying the differences can prevent business owners from making unnecessary applications, paying the unnecessary fees, and facing legal issues.
Why is Company Liquidation a Term Used for?
Company Liquidation is the procedure that involves the winding up of a company. This typically includes asset identification, recovery of outstanding amounts, settlement of debt, distribution of any surplus to the rules and deregistration of the process as necessary.
In the course of the liquidation, the company can survive as a legal entity, but just for a limited purpose to complete the liquidation. The UAE law acknowledges that a company continues to have legal personality during liquidation for the purposes of liquidation.
- In the event of completion of the procedure, the status of the company is not the same as that of a company that has had its licence expire, or its licence cancelled.
- This is important as the act of company revival can result in a company’s registration being revived instead of a new licence being obtained.
Is It Possible To Re-open a Liquidated Company?
Every company in the UAE has its own unique solution. Depending on the company’s status and the rules of the licensing authority or registry to which it belongs, there is the possibility of restoration.
Let’s take a look at some common scenarios:
The Trade Licence Has Expired
- Where a company’s licence has expired, but the business has not undergone formal liquidation or deregistration, an owner may be able to renew or regularise the company’s licence.
- The authority may demand payment of any outstanding renewals fees, penalties and other dues. Other documents or approvals may also be required.
- This is typically not the same as the restoration of a company that has already been dissolved in accordance with the law.
Company Was Not Fully Liquidated but the Licence Was Cancelled
There are businesses that have their licences cancelled whilst the company has not gone through the process of a formal company dissolution.
In such cases, the owner should check with the relevant authority to see if the company is still in operation. The next step may be to fulfil outstanding closure conditions, to apply for a new licence or to act in accordance with a specific procedure which is defined for the restoration of the licence.
The company should not presume that its previous registration is still in force
The Company Was Struck Off the Register means that the company’s name was removed from the Register of Companies. Some company registers offer a system for resumption of a company that has been struck off.
- For instance, the RAK ICC Business Companies Regulations provide for an application for restoration to the register in certain circumstances. Eligibility and consequences for applying the procedure must be checked with the individual company and the registry.
- It is essential to note that even though a company became struck off, it may still be possible to restore the company, whereas not all fully liquidated companies are eligible for restoration.
What Should you check before re-applying after company liquidation?
Prior to initiating a “reactivation” or “restoration” application, please ensure that the following is true: Company Status Does the company exist, has its licence expired, has the company been cancelled, is being wound up, has been dissolved or has been struck off?
The authority of registration: Was it registered with a mainland authority, a free zone or a specialised registry?
Closure documents: have Liquidation Report, Cancellation Certificate, Deregistration Confirmation and Shareholder Resolutions?
Outstanding liabilities: Does the company have any unpaid fees, creditor claims, employee dues, tax obligations or other unpaid liabilities?
Eligibility for Restoration: Is there a restoration process that is offered to the company’s specific status?
The business closure procedures in UAE depend on the type of the business and the emirate. For instance, the official guidance for the closure of Dubai businesses outlines the liquidation and deregistration procedures for businesses, such as the liquidator documents and final submissions.
What If Restoration is not available?
- If the company has been completely dissolved and its legal entity has been extinguished, it might be more practical to start a new company.
- If you are registering a new entity, it might need to be registered again in a different trade name, licensed, incorporated and have other registrations. Owners should also check to see if there are any outstanding debts or unclosed legal issues.
When someone uses the old company’s paperwork or registration information, they should not be used as if the company is still in operation. A new company is not created by law unless it is established to the contrary by an authorised restoration process.
What Is The Importance of Professional Guidance?
The role of professional guidance is critical. Licensing authorities, registry rules, legal documentation, outstanding financial obligations and tax considerations are all aspects of company restoration. A professional adviser can check the company’s status, see which path to take and assist in preparing the necessary paperwork.
Chartered Accountants from MAK may be recommended for accounting and tax assistance. The company may also require help from a registered liquidator, a legal advisor, or the company registrar.
Conclusion
In some cases a company may be restored if it is a liquidated company, but it is not a right of the company but depends on the circumstances. Before anything else, it is crucial to verify whether the company’s licence has expired, its registration has been cancelled, it has been struck off or liquidated and dissolved.
There may be a variety of processes in each status. When looking into purchasing a new application, be sure to review the company’s official records and get advice from the relevant authority before making the purchase. This will allow you to figure out if restoration is an option or if it’s better to create a new UAE company.
How MAK Chartered Accountants Can Help With Company Reactivation in the UAE
MAK Chartered Accountants can assist with reviewing the accounting records, financial obligations and tax matters that may need attention when considering company restoration or a new UAE company. Our team can help organise the financial documents required for discussions with the relevant authority, registered liquidator or legal adviser.
- Review available accounting records and financial statements.
- Identify outstanding accounting and tax matters that need attention.
- Help organise financial records and closure documents.
- Provide accounting and tax support for the appropriate next steps.
Dubai Corporate Office
Al Saraya Avenue, Block A, Office AM06, Al Garhoud, Dubai, United Arab EmiratesGet in Touch
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MAK Chartered Accountants L.L.C.
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