When you take the decision of closing down your business in UAE, you must cancel your trade license first. For canceling it, there are different formalities that should be fulfilled by the company. If the license is not canceled by the company on time, a number of fines can be imposed on the company.
Formalities for business cancellation in UAE
The form of company you possess is what decides the cancellation procedure you must go through.
License cancellation for sole proprietorship and establishments
Steps for such company structures are quite simple to carry out. All you need is to submit the application of license cancellation through the Department of Economic Development. After doing so, you must obtain the clearance forms which are as follows;
- Leasing entity
- Water authority
- Electric authority
- Human Resource and Emiratisation Ministry
- Residency and Foreigners Affairs Directorate
License cancellation for shareholding companies
The processes for such companies may be time taking and lengthy because liquidation of shares, debt collection, paying to creditors and other important factors are to be considered before moving on towards DED.
LLCs, SLPs, private and public joining stock companies and general partnership companies require liquidation.
Requirements for canceling the trade license in UAE
A company first needs to appoint auditors in UAE for Limited Liability Companies
The process is completed in two main stages;
- Prepare the application for canceling the license
- Cancel all the employment visas that come under the trade license of the company.
- Get the clearance from the Labour Department Ministry
- For appointing a liquidator in UAE, formulate the board of resolution
- Prepare the contract for canceling the trade license in the notary public
- Publish the advertisement for cancellation in 2 local newspapers. In the time of 45 days, the supplier gets the leverage to submit all the required claims. If someone claims while the advertisement period is in progress, you must settle the claims. Note that the reason behind canceling the license should also be published in the advertisement
- If the shareholder is having the partner visa, cancel it
- Cancel the establishment card of the company
- Get the clearance from the department of immigration
- Get the clearance from DEWA, Etisalat, etc.
- Get the clearance from Dubai customs
After submitting the required documents to DED, you will be issued a voucher for license cancellation payment. After paying the fees, you will get the certificate of license cancellation.
Freeze trade license
If someone wants to cancel the cost of cancelling the license, he can go for freezing the license for a limited time. A person can freeze the license from 1 to 3 years. The company can freeze its license and stop carrying out all of its activities. It is to be noted here that the company can only go for freezing if and only if it has no employees working in it anymore and no legal action can be taken against it. Also, the creditors can file a claim against the company even if it is frozen.
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