Is LLC Trade License Cancellation mandatory when I stop doing business?

Yes, if you stop using your company but do not cancel the license, fines and liabilities can still grow, so proper LLC Trade License Cancellation is required to protect you from future problems.

Do I always need a liquidator to cancel my LLC license?

Some company types must appoint a registered liquidator, especially where the law requires a liquidation report, while smaller entities may follow a simpler route but still benefit from professional guidance.

Can I cancel my trade license if I still have employees?

You must first settle salaries and end-of-service benefits and then cancel all visas and labour cards; only after clearing employee matters can you complete the trade license cancellation.

How long should I keep documents after cancellation?

It is wise to keep digital or physical copies of resolutions, authority clearances, and the final cancellation certificate for several years in case any questions arise later.

How does Mubarak Al Ketbi (MAK) Auditing make the process easier?

Mubarak Al Ketbi (MAK) Auditing prepares all required documents, coordinates with government authorities, tracks clearances, and ensures that each step of LLC Trade License Cancellation follows UAE rules so that closure is smooth and compliant.

LLC Trade License Cancellation in UAE Guide 🥇

LLC Trade License Cancellation in UAE – Complete Guide

Closing a company in the UAE is a serious step, and every owner must handle it in a proper way. When you stop running a business, you must cancel the license and complete the liquidation process. This rule applies whether you own a limited liability company (LLC), a partnership, or a sole establishment.

LLC Trade License Cancellation is not only a paper task. It’s a legal requirement that protects you from future risk. If you don’t cancel your license correctly, fines, immigration issues, and tax problems can still follow you later. A clean exit helps you maintain a good record for new ventures inside the UAE or outside it.

In this detailed guide, you’ll see how the cancellation system works, what documents you need, which government bodies you must deal with, and how a professional advisor like Mubarak Al Ketbi (MAK) Auditing can simplify the whole process for you.

Why Cancelling an LLC Trade License Matters in UAE

When a business stops trading, some owners think they can just ignore the license and wait for it to expire. In the UAE, that approach can create long-term trouble. Laws such as Federal Law No. 2 of 2015 give the rules for company dissolution and set clear grounds under which a business may be wound up.

A company may be dissolved if:

Its fixed duration has ended.
Its original purpose has been achieved.
It has lost most or all of its core assets.
Shareholders pass a decision to liquidate.
A court declares bankruptcy.

If you’re no longer using the license, you should complete proper LLC Trade License Cancellation instead of leaving the file open. A proper closure helps you:

Avoid penalties from the Department of Economic Development (DED) or free zone authority.
Clear all employee visas and labour contracts in a legal way.
Close corporate tax and VAT positions with the Federal Tax Authority.
Protect the reputation of shareholders and directors.
Keep a clean legal and financial record for future business opportunities.

When everything is closed in a clear and documented way, you can move to your next project with peace of mind.

Types of Trade License Cancellation in UAE

Different business setups follow slightly different procedures, but the logic is the same: the company must prove that all obligations are satisfied before the authority cancels the license.

Mainland Company License Cancellation

If your company is registered with a DED in any emirate, then your LLC Trade License Cancellation process passes through that department. You may need:

A liquidator appointment in some structures.
A final audit report for the company accounts.
Labour and immigration clearances.
Tax and VAT clearances where applicable.

Mainland companies often have more touchpoints with external authorities because they may hold office leases, warehouses, and multiple staff visas.

Free Zone Company License Cancellation

Free zone authorities such as DMCC, JAFZA, RAKEZ, DAFZA, or IFZA have their own internal procedures. In most cases, the free zone will require:

Clearance from utilities and service providers.
Cancellation of all employee visas under the company’s code.
Settlement of license fees and penalties.
Return of establishment cards or access cards.

While the steps vary, the aim remains the same: the free zone wants to confirm that the business leaves no outstanding rights or obligations.

Main Steps to Cancel an LLC Trade License in UAE

You can think of the cancellation journey as two main stages: the legal and public part, and the clearance and confirmation part.

First Stage – Legal Decision and Public Notice

Shareholder Resolution and Liquidator Appointment
The shareholders pass a resolution that approves liquidation and appoints a liquidator if required. These meeting minutes are usually notarised and kept as part of the official record.
Liquidator Acceptance Letter
The liquidator issues an official letter to confirm that they accept the role and will handle the process.
Initial Application to Authority
You submit the resolution, liquidator letter, and application form to the DED or free zone authority. The authority reviews the file and issues a provisional approval for liquidation.
Newspaper Advertisement
A public notice is then placed in two local newspapers. This notice declares that the company will be closed and gives creditors a period (commonly 45 days) to submit any claims.
Waiting Period for Creditors
During this period, third parties can come forward if they have outstanding claims. This step protects creditors and keeps the process transparent.

Second Stage – Clearances and Final Cancellation

Liquidator and Partner Declaration
After the creditor period, the liquidator and the partners sign a declaration stating that no further objections were raised or that all objections have been handled.
Government Clearances
The company must then obtain required clearances from authorities such as the tax authority, labour, immigration, and other agencies.
Labour File and Visa Cancellation
Labour files must be closed, and all visas for staff and partners must be cancelled through the proper system.
Document Submission and Fee Payment
All supporting documents, declarations, and clearances are submitted to the DED or free zone authority, along with final cancellation fees.
Issue of License Cancellation Certificate
When the authority is satisfied, it issues a trade license cancellation certificate. Only after this step is the company officially treated as closed.

Documents You Need for LLC License Cancellation

The exact checklist can change slightly by emirate and legal form, but you can expect to provide:

Copy of the trade license.
Memorandum of Association (and any amendments).
Shareholder resolution approving liquidation and cancellation.
Power of Attorney if an agent represents the partners.
Passport copies of all shareholders.
Emirates ID copies of shareholders.

You may also need:

Bank account closure letters.
Tax clearance documents.
Lease termination confirmations.
Utility and telecom clearance letters.

Preparing these documents early saves time and prevents delays during the approval process.

Government Clearances Required for Cancellation

A correct LLC Trade License Cancellation must prove that the company has no pending obligations with key government bodies. Some of the most common clearances include:

1. Federal Tax Authority (FTA)

If your company is registered for VAT or corporate tax, you must:

Apply for deregistration using the FTA online portal.
File final tax or VAT returns if required.
Pay any outstanding liabilities.
Obtain a deregistration or clearance certificate.

Failing to complete this step can lead to penalties even after the license is cancelled.

2. Ministry of Human Resources and Emiratisation (MOHRE)

The company must:

Cancel all active labour cards and work contracts.
Close the company’s labour file.
Ensure that all end-of-service benefits and final dues are paid to employees.

This step protects both the staff and the company.

3. General Directorate of Residency and Foreigners Affairs (GDRFA)

You need to:

Cancel all residence visas under the company’s sponsorship, including owners, partners, and staff.
Apply for GDRFA clearance to confirm that there are no pending immigration ties.

4. Utility and Telecom Providers

The company must:

Cancel electricity and water accounts and pay the final bills.
Cancel all telecom lines, internet connections, and related services.

5. Municipality and Civil Defence (Where Applicable)

If you hold a physical office, shop, or warehouse, you may also need clearance from:

Municipality departments.
Civil Defence authorities.

These bodies confirm that there are no fines, lease disputes, or safety issues that remain open.

Typical Timelines for LLC License Cancellation

Every case is different, but an average LLC Trade License Cancellation can take around two to three months from start to finish. The main time factors include:

The 45-day notice period in newspapers.
The speed of response from tax, labour, immigration, and other agencies.
Document readiness, such as audits and board approvals.

A rough breakdown might look like:

Newspaper notice period: about 45 days.
Government clearance steps: around 1–2 weeks per authority.
Final review and issuance of cancellation: about 5–10 working days after full submission.

If documents are incomplete or clearances face delays, the total period can extend, so planning is very important.

Risks of Not Cancelling an LLC Trade License

Some owners leave the country or shift their focus and forget about the license. This choice can lead to serious consequences such as:

Continuous accumulation of fines and penalties.
Blacklisting of company owners and partners.
Freezing of government transactions.
Trouble when applying for future visas or company setups.
Legal cases for unpaid dues or unpaid tax and VAT.

To avoid these problems, it’s better to close the company properly and retain proof of all cancellation steps.

Cost Factors in Trade License Cancellation

The total cost of cancelling a trade license is not fixed for every entity. It depends on:

The number of visas under the company.
The size and complexity of operations.
The number of clearances required.
The need for a formal liquidator and final audit.

You may face:

Government fees from DED or free zone authorities.
Notary costs for resolutions and POAs.
Newspaper advertisement charges.
Professional fees for the liquidator or advisor.

A simple LLC with few visas and no complex issues may pay less, while a large business with many staff and properties may pay more. A clear fee estimate at the start of the process helps you plan ahead.

Special Points for Free Zone LLCs

If your LLC is in a free zone, the process may include portal applications and zone-specific rules. You should:

Check if the free zone requires a final audit.
Use the free zone’s electronic system for termination requests.
Clear any exit fees or delay fines.
Obtain a lease clearance or NOC for office or warehouse.

Free zones try to make the process digital, but they still need proper documents and clearances similar to mainland authorities.

Role of Mubarak Al Ketbi (MAK) Auditing in LLC Cancellation

Handling LLC Trade License Cancellation on your own can feel confusing, especially if you’re busy or outside the UAE. Mubarak Al Ketbi (MAK) Auditing supports business owners by:

Explaining closure rules in simple terms.
Reviewing your current compliance and risks.
Preparing shareholder resolutions and other formal papers.
Coordinating with DED or free zone authorities.
Handling VAT deregistration and tax matters.
Guiding you through labour and immigration clearance.
Tracking your file until final cancellation.

This support helps you avoid costly mistakes and saves time at each stage of the process.

What Can Help – Support from Mubarak Al Ketbi (MAK) Auditing

When you decide to close your company, you want the process to be smooth, lawful, and well documented. Mubarak Al Ketbi (MAK) Auditing helps you manage every stage of LLC Trade License Cancellation, from the first resolution to the final certificate. Their team coordinates with government bodies, prepares clear documentation, and helps you settle pending matters, so you can focus on your next plans because in business, just as in life, a stitch in time saves nine.

For more information visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
Or contact / WhatsApp on this number: +971 50 276 2132

FAQs on LLC Trade License Cancellation in UAE Guide 🥇

How does corporate tax help a start-up’s growth?

Corporate tax teaches start-ups to keep better records, plan smartly, and look more trustworthy, which can help them get more investments.

Are there any special tax breaks for new tech companies in the UAE?

Yes, tech companies can get tax holidays, pay zero tax on profits below a certain level, and keep special rates in some Free Zones.

Why is corporate tax good for fair business?

Corporate tax makes sure every business pays its part, so big firms can't get ahead by skipping taxes. This creates a level playing field for start-ups and supports public services.