Company liquidation is a hectic task. The liquidation of a company is not just about closing it down; there are many factors to be considered while doing so. The government authorities have to be notified, the business licenses will have to be canceled, assets need to be distributed and the list goes on. The legal formalities included in company liquidation are the most tedious task among them all.

  • The expiry of license/ duration stated in the articles of incorporation/ association or the accomplishment of the objective for which the entity was set up
  • The loss of all or a major portion of the entity’s assets
  • Mergers
  • Shareholders’ approval that the entity’s term of existence can be brought to an end as per the stipulated majority, etc.
  • Liquidation on a voluntary basis
  • Liquidation on a compulsory or legal basis

The person who is in charge of conducting the liquidation process is termed the liquidator. The court or shareholders of an entity appoint a liquidator and it is dependent on the type of liquidation as well. Immediately after being appointed, the liquidator will provide a formal letter of acceptance. They will write a statement of affairs and a liquidator’s report once all of their responsibilities have been performed, which are required to perform the liquidation procedure.

License cancellation is one of the primary steps in the liquidation process, and the formalities differ based on the form of company. In the case of establishments and sole proprietorships, you will have to apply for cancellation through DED. Also, clearances need to be acquired from the below-mentioned departments-

  • Ministry of Human Resources and Emiratisation
  • Directorate of Residency and Foreigners Affairs
  • The relevant water and electricity authority
  • The leasing entity

Other Insights

June 29, 2023

Profitable growth: Strategies for sustainable business success 3

Mainland refers to the area outside the free zones in the UAE, and the Department of Economic Development (DED) serves as the regulatory authority for issuing mainland licenses.

Read more
June 29, 2023

Profitable growth: Strategies for sustainable business success

Mainland refers to the area outside the free zones in the UAE, and the Department of Economic Development (DED) serves as the regulatory authority for issuing mainland licenses.

Read more
Read all Insights

Find out why over 700+ entrepreneurs have entrusted their business with us.

promptus
Calculate your business setup cost

We work closely with government entities

whatsapp