Procedures for liquidation of LLC

Procedures for liquidation of LLC

Board of Directors meeting

The Board of Directors must unanimously decide to close down the company. All Directors must agree to this, the document which specifies this must be attested by a Notary Public. At the meeting, the decision to appoint an approved liquidator must also be taken, and too must be mentioned in the legal document.

Submission of Application for Liquidation

A Liquidation Form needs to be filled in and duly submitted to the Department of Economic Development in the emirate where the company has been registered. For company liquidation in Dubai, there is the Department of Economic Development, while in Sharjah, the corresponding authority is the Sharjah Economic Development Department.

Publication of the Dissolution Decision

The decision to dissolve the company must be published in a local Arabic paper, so that all existing creditors are notified and can lodge their claims with the company. This must be published at least 45 days prior to winding up the company, so that creditors have sufficient to make their full and final claims upon the company.

Liquidator Acceptance

The approved liquidator or liquidation firm must agree to take on the responsibility of liquidating the company and its assets. This must be given to the company in writing, so at the time of taking the decision to wind up the company, the liquidator must be kept informed that he/she is being appointed as the official liquidator to oversee the process of closing down.

Notice Period

The Department of Economic Development in the emirate where the company is registered, such as the Department of Economic Development – Abu Dhabi for firms registered in Abu Dhabi or the Department of Economic Development of Ras Al-Khaimah for companies incorporated in Ras Al Khaimah, mandates a 45 day notice period for all companies that have decided to close down.

Visa Cancellation & Settlement of Dues

During the 45-day grace period granted by the Department of Economic Development, all company-related visas must be cancelled. This includes both the work visas of employees / partners as well as the residence visas of their spouses and children, if any. A No Objection Certificate must subsequently be obtained from the Ministry of Labour and Ministry of Immigration.

All outstanding utilities and communications bills must be settled and NOCs obtained from the utilities provider, such as DEWA for Dubai and communications provider, such as Etisalat / du.

Liquidator Report

The Government approved liquidator submits a Final Audit report stating that all outstanding dues owed to creditors have been settled and there are no pending claims upon the company after the end of the 45-day grace period. To prevent any further delays, it is always recommended that dues owed to creditors, clients, or other third parties are settled before the decision to close down the company is taken.

Liquidation Certificate

Once the Department of Economic Development where the company is located, such as the Fujairah Department of Industry and Economy for companies registered in Fujairah, or the Ajman Department of Economic Development for companies based in Ajman, is satisfied that the company has met its creditors’ claims and all other outstanding dues upon the company, it issues a Final Liquidation Certificate stating that the process has been completed successfully.

This is the final step in the process. Once the Certificate has been issued, the company ceases to legally and officially exist.