How to Close LLC Company in Dubai?
Dubai has always been one of the top business destinations in the world, attracting entrepreneurs and investors from all over the globe. However, with changing market dynamics and economic uncertainties, businesses may need to wind up their operations.
Closing a business in Dubai requires processes and documentation for cancelling the trade licence and all permits associated with the company.
Although the basic steps for all legal forms are the same, there are a few differences in the business type and jurisdiction. The company, before the liquidation, must inform all stakeholders, appoint a liquidator, file a notice of closure, cancel the trade licence, and liquidate the assets.
Stage-1
1. First, the company's shareholders endorse a resolution to dissolve the company, which must be approved, documented and signed by all shareholders and then appoint a liquidator.
2. Then, appoint a registered liquidator and get an official letter from the registered liquidator.
3. Apply for cancellation through the Department of Economy and Tourism (DET) with the original company licence and a cancellation form.
4. The DET will then issue a liquidation or cancellation certificate and publish it in two local newspapers to notify any potential creditors.
5. The notice or certificate gives 45 days to submit the claims.
Stage-2
1. The liquidator and all partners must submit a declaration letter to DET indicating no objections from parties. 2. Then get all required approval from government authorities to cancel a licence.
3. Cancel all visas, including partners and work permits issued to its employees at respective General Directorate of Residency & Foreigners Affairs (GDRFA)
4. Submit all the documents to get final approval for liquidation and pay the fees.
5. Finally, you get the Certificate of Deregistration (cancellation)
The LLC is officially closed with all the legal and financial obligations fulfilled.
This blog post will discuss the steps in closing an LLC Company in Dubai, trade licence cancellation costs, and other essential details that businesses should know.
Step 1: Inform All Stakeholders
Before initiating the LLC Company closing process, it is essential to inform all stakeholders, including shareholders, employees, creditors, and clients. The LLC Company must also pay off all outstanding debts and obligations, including salaries, loans, and utility bills.
Step 2: Appoint a Liquidator
Next, appoint a liquidator responsible for managing the closing process, selling off assets, and distributing the proceeds to the stakeholders. The appointed liquidator must be registered with the Dubai Courts or the Dubai Economic and Tourism (DET).
Step 3: File a Notice of LLC Company Closure
Once the liquidator is appointed, the LLC Company must file a closure notice with the DED. The information must include the following:
· The reason for the closure.
· The appointment of the liquidator.
· The expected timeline for completing the process.
The LLC Company must also publish the notice in two local newspapers to inform the public.
Step 4: Trade Licence Cancellation Procedure
The trade licence cancellation procedure is essential to the closing process. The process involves applying for cancellation and the original trade licence to the DET. It also must clear any outstanding fines or fees before applying.
Step 5: Liquidation of LLC Company
The liquidation process involves selling off the assets of the LLC Company and distributing the proceeds to the stakeholders. The appointed liquidator will prepare a liquidation report, which includes details of the assets and liabilities of the LLC Company. The stakeholders and the DET must approve the report before proceeding with the sale of assets.
Step 6: DET Licence Cancellation Fees
The DET charges a fee for cancelling the trade licence, which varies depending on the type of LLC Company and the licence duration.
Step 7: Immigration Clearance
The LLC Company must follow the UAE Labour Law when closing its operations, and the law requires the company to notify employees at least 30 days before the termination date. The LLC Company must also pay the employees their outstanding dues, including salaries, gratuity, and end-of-service benefits.
In addition, the LLC Company must cancel the work permits and visas of the employees and provide them with a clearance letter, which allows them to seek new employment opportunities in the UAE. The employees may also be entitled to compensation for unfair dismissal if the LLC Company does not comply with labour law.
Closing an LLC Company in Dubai can be a complex process and require professional guidance to ensure compliance with the relevant regulations and laws. The cost of liquidation depends on several factors, including the size of the LLC company, the complexity of the closing process, and the fees charged by the authorities.
In conclusion, closing a company requires planning and execution to ensure a smooth and compliant process.