How to Close an LLC Company in Dubai

The United Arab Emirates is focused on building a robust business infrastructure to support businesses and drive economic growth. Foreigners from all over the world continue to move to Dubai for better life opportunities. 

While Dubai offers immense possibilities for company formation and successful business operations, sometimes things don’t work out as planned. A company might go into debt, or due to mismanagement, it may need to close. This blog provides an overview of how to close your LLC company in Dubai.

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Liquidation of an LLC Company in Dubai

Liquidation of an LLC company in Dubai involves closing your company and canceling its license and any attributes related to its existence. No matter what type of business you own in the Emirates, you must cancel your trade license and all related permits when you decide to close your business. Various reasons, both positive and negative, can lead to company liquidation. These include financial losses, the desire to start a new venture, or personal reasons.

LLC License Cancellation in Dubai - Details

Relevant government entities need to be informed that you are no longer in business to avoid accumulated penalties and fines incurred upon your business license when it is not renewed upon expiry. If you own a Limited Liability Company, LLC license cancellation in Dubai becomes mandatory. For shareholding companies, it’s essential to discharge your liabilities towards creditors and partners, protecting your shares and interests. Maintaining goodwill and business reputation is also wise if you plan to set up a business again.

Procedure for LLC License Cancellation in Dubai

While there are many benefits to LLC company formation in Dubai, sometimes shutting it down becomes the only option. The decision for any LLC license cancellation in Dubai depends on the corporate entity. However, certain steps must be followed:

 Stage 1

  1. Prepare notarized minutes of the general assembly confirming the business liquidation and the appointment of a liquidator.
  2. Arrange an official letter by a registered liquidator accepting the duty.
  3. Apply for cancellation by filling out the required form through the Department of Economic Development (DED) or other approved channels.
  4. DED will issue a liquidation certificate.
  5. Publish the notice of liquidation in two regional newspapers.
  6. The notice gives the debtors a grace period of 45 days from the date of issue to submit their claims.

 Stage 2

  1. Submit to DED a declaration letter from the liquidator and the partners indicating no objection from any other parties during the grace period.
  2. Collect the required approvals from other government bodies to cancel the license.
  3. Cancel the firm card at the Ministry of Human Resources and Emiratisation.
  4. Cancel the foreign partners’ visas sponsored by the company at the respective General Directorate of Residency & Foreigners Affairs.
  5. Submit all the above documents to get approval for final cancellation.
  6. DED will determine the fees.
  7. Receive the Certificate of Deregistration (cancellation) after paying the requested fees.

Procedure for Closing an LLC Company in Dubai

When completing the official steps for closing an LLC company in Dubai, all company partners must be available in the country (or their Power of Attorney, who is approved and attested to sign the shareholder resolution to close the company). Once you have applied for the cancellation of a business through the DED, you must follow these steps:

  1. Closing Your Company Bank Account: Officially close any active bank accounts in the trade name of the company. Request a Statement of Account for the last financial year for the Liquidators Report and a Bank Account Closure Confirmation as proof of closure.
  2. Immigration Clearance: Cancel any active visas under legal sponsorship, including dependent visas under any employee sponsorship.
  3. Clearance from the Required Regulating Authority: Obtain clearances from the Regulating Authority regarding the company’s activity. For instance, if you are closing a trading company, request a clearance letter from the Chamber of Commerce and the Ministry of Customs.
  4. Third-Party Clearance: Pay all fees to the landlord for any commercial space rented by the business and obtain a clearance letter. Obtain a final bill from DEWA or ADDC, and confirmation of terminated utility services registered under the company name.
  5. Deregistration of Publication: File a notification in a regionally based newspaper/gazette publication stating that the company is in the procedure of liquidation. In Abu Dhabi, this requires a 45-day period to allow any creditors to raise any issues before liquidation approval.
  6. Company Assets: Sell or transfer any property or shares held in other companies under the business name. Proof of transfer or sale will be needed for the Liquidators Report.
  7. Liquidators Report: Engage an approved auditing company licensed to prepare a Liquidators Report for the company.
  8. Confirmation Certificate: Once all the aforementioned steps are complete, apply for a Confirmation Certificate confirming the termination of the company license and deregistration of the company.

Conclusion

Following these steps will allow you to close your LLC business in Dubai smoothly. If you are considering officially closing your LLC or foreign branch office in Dubai, consultants at Unicorn Global Solutions can assist you with this process and all the necessary steps. Contact us today to ensure a hassle-free company closure. Text us on WhatsApp or call us.

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