Company closure in Dubai
Reliable and professional services for company liquidation in UAE. Many business owners who no longer wish to operate their businesses in the United Arab Emirates will just stop paying their trade license fees and hope to be struck off the commercial register. We provide reliable and professional services for company liquidation in UAE.
However, this method is not correct for the closure of a license and may subject the share holders to other serious consequences.
The partners are liable for current debts of the establishment until the business license is officially struck off.
Article 295 of the UAE Companies Law states that an entity can be dissolve for a number of reasons including:
- The term of the company has ended,
- The purpose for which the business has been set up expires,
- The business loses a significant amount of funds,
- The entity merges with another company,
If all the partners agree to close,
- By a court order to dissolve the business establishment.
United Arab Emirates Companies Law gives various other provisions for dissolution of an entity depending on the company type.
Company liquidation process in UAE
Article 303 of the UAE Companies Law states that a company may be remove from the commercial register if the DED determines that a company has stop to conduct its business or that it conducts such business i contravention of the Companies Law.
In relation to the process, the DED will notify the business owner to strike off within three months from the date of the notice, unless a good reason by the company for not being strike off.
If the Ministry of Economy or the DED, receives upon the expiry of the three months, a confirmation that the company’s business is still under suspension or if the company fails to provide a proper justification for such suspension.
The matter will be then refer to the competent court to initiate the procedure to liquidate the company.
Company Share holders’s liability in accordance with UAE companies laws shall continue as if the company has not been dissolved. As such, they will be personally liable for the business establishment.
Therefore, it is essential for business owners not to rely on Article 303 for the dissolution of their businesses as it carries some serious consequences.
Further more, such partners of a company might face a ban if they exit the country and ever decide to return back to the country, even as a tourist. They would be held at the airport until all debts have been cleared.