Liquidating a Limited Liability Company (LLC) in the UAE involves a formal process to dissolve the company and settle its financial and legal obligations. The steps can vary slightly depending on the emirate and free zone regulations, but the general procedure is as follows:
Steps to Liquidate an LLC in the UAE
- Pass a Shareholders’ Resolution
- Convene a general meeting of shareholders to pass a resolution approving the liquidation.
- Appoint a licensed liquidator to manage the process.
- Notarize the resolution at a notary public.
- Notify Relevant Authorities
- Submit the liquidation resolution and application for liquidation to the Department of Economic Development (DED) in the emirate where the company is registered.
- Obtain a liquidation certificate from the DED to formalize the process.
- Appoint a Licensed Liquidator
- Hire an authorized liquidator (e.g., a certified auditor or liquidation firm).
- The liquidator will:
- Review the company’s financial status.
- Prepare a final audit report (liquidation report) detailing the settlement of debts and distribution of remaining assets.
- Publish a Notice of Liquidation
- Publish the company’s liquidation notice in two local newspapers (one in Arabic and one in English).
- The notice should state:
- The company is being liquidated.
- Creditors have 45 days to submit claims or objections.
- Settle Outstanding Liabilities
- Pay off all outstanding debts, including loans, employee salaries, and government dues (e.g., VAT, customs, and municipality fees).
- Cancel utilities, leases, and other operational contracts.
- Obtain clearance letters or no-objection certificates (NOCs) from:
- Government departments (e.g., the Ministry of Human Resources and Emiratisation for labor clearance, immigration departments for visa cancellations, and the Federal Tax Authority for VAT clearance).
- Creditors and suppliers.
- Cancel Licenses and Close Bank Accounts
- Cancel the trade license with the DED.
- Close the company’s corporate bank accounts.
- Retrieve any bank guarantees or deposits.
- Submit Final Documents
- Submit the liquidation report, clearance letters, and other required documents to the DED.
- Pay final fees to complete the liquidation process.
- Obtain the Final Liquidation Certificate
- Once all requirements are met, the DED will issue a certificate of liquidation.
- The company is officially deregistered.
Additional Points
- Free Zone Companies: If the LLC is registered in a free zone, the liquidation process will follow the specific regulations of that free zone authority.
- Timeframe: The entire process can take between 2 to 6 months, depending on the complexity of the company’s operations and liabilities.
- Professional Assistance: Engaging a legal or financial consultant can streamline the process, especially for companies with complex financial structures.
