Liquidation is the process by which a LLC company, sole establishment or a free zone company closes its operation and the assets and property of the company is distributed to shareholders of the Company.
TYPES OF COMPANY LIQUIDATION
- Voluntary liquidation
- Compulsory liquidation
PROCEDURE TO LIQUIDATE OR WIND UP LLC COMPANIES
- Prepare a board of resolution calling to cancel the company by all partners concerned. The resolution needs to authenticated through court procedures. The duration of the process will take a day and costs approximately 800 AED. Board needs to appoint a liquidator and which needs to mention in the resolution.
- Apply for preliminary or initial cancellation of license at Department of Economic Department. The cost of which will be AED 2010.
- Cancellation of visas, establishment cards, labor cards etc.
- Prepare audit report if company was existing only less than 2 years.
- Newspaper advertisements to do at the cost of AED 1500/-
- Clearances and bank account closures.
- Need to pay the final bills to DED after 45 days of process to get a liquidation certificate.
PROCEDURE TO LIQUIDATE OR WIND UP SOLE ESTABLISHMENTS
- ECD form to sign and apply for the cancellation directly at DED
- Clearances are required from each department
- Liquidator is required to fulfill the formalities
- Pay for initial liquidation certificate
- Newspaper advertisements to follow
- Final payment for the liquidation certificate
PROCEDURES TO LIQUIDATE FREE ZONE COMPANIES
Different free zone has different procedures for liquidation but most of them have the same process
- Resolution from Board for liquidating the Company and appointment of liquidator (registered and approved liquidators in UAE)
- Need to take clearances from customs, Etisalat, and other relevant departments.
- Liquidation letter by registered auditor for FZE & FZCO only to be submitted
- All fees and charges are to be settled with the free zone.
- Need to return all documents of the company.
WHAT IS THE DURATION OF A FREE ZONE COMPANY LIQUIDATION?
The liquidation process may take 45 to 50 days if other requirements and formalities are executed on time. A free zone will have one window solution to close down the company whereas the mainland company have its clearances from multiple departments which are in various locations.
DOES AN OFFSHORE COMPANY REQUIRE TO CLOSE, IF NOT ACTIVE?
The offshore company automatically gets stroke off from the system if it is inactive over a period of time. Since the visas are not linked with the company it is not important to bother about this solution
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