What is the company liquidation process in Dubai?

Created On: August 28, 2018
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Modified On: January 12, 2026

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What is the company liquidation process in Dubai?

Company liquidation literally means liquidating or planning to close a company. When a particular company decides to close or stop its functions or undertaking in a particular place, the company’s assets or capital are disseminated amongst the shareholders. Because of the liquidation of a company, its trade license also needs to be cancelled.

In other words, it’s the process by which any Dubai LLC company, a free zone company, or a sole establishment shuts its office and operations and then distributes its assets and properties within its shareholders and creditors if any. This process is also called dissolution or winding-up.

Documents Required for Company Liquidation in Dubai

Dubai government requires specific documentation for company liquidation in Dubai.

Copy of the license
Copy of the Memorandum of Association (MOA), with any changes
Power of Attorney, if any
Copies of all shareholders’ passports
Copy of your Emirates identification
Resolution of the shareholders
De-registration application form

Liquidators in Dubai

A liquidator is a UAE-based agency that sells a company’s assets to pay off its debts. Once appointed, the liquidators provide a letter of acceptance, draft a statement of affairs and a liquidator’s report to complete the proceedings. The liquidator is responsible for undertaking the following tasks:

Evaluate assets and liabilities to distribute profits after asset sale
Regularly provide information to the company’s creditors
Make sure that all business assets are collected and distributed correctly
Prepare the statement of affairs and the final report for liquidators

Business Liquidation Services in UAE

Business liquidation in UAE is the process of a company closing down all commercial activities. Various reasons may lead to this.

When a firm’s liabilities exceed its assets, it may become bankrupt and have to shut down. Sometimes, the management may choose to liquidate the company. In liquidation, the company’s assets are used to settle liabilities. Any remaining assets are sold, and profits are distributed among directors and shareholders.

But why is company liquidation required?

Liquidation becomes the last resort if a registered company is short of funds to carry on the day-to-day transactions, make payments to its creditors or in case the company has committed some serious offence knowingly or unknowingly. Therefore, any regulatory government authority or agency in that country files a relevant suit. This liquidation could be either compulsory (for example, creditors’ liquidation) or even voluntary, like if shareholders decide to liquidate.

In which all situations, do you need to cancel your trade license?

Cancellation of your trade license is an integral part when you are closing your company in Dubai. The following scenarios make it mandatory to cancel your trade license:

If a company is not earning enough or they can’t carry on their daily operations; or when they don’t have enough funds to pay salaries to their employees or cover the debts.
In case a company has committed any serious crime like fraud and any Dubai authority has started investigating it and has found some violations of any strict rule or regulations. In such a scenario, the company gets a legal notice for closure.
If the trade license has expired and hasn’t been renewed. If the company does not want to renew it, then that license needs to be cancelled, or the company will be fined.

Please note that if you once cancel the trade license and close it, it cannot be re-activated again; so you have to be sure of it. In addition, for cancellation of trade license, you have to submit various documents and then get approvals from multiple government and federal authorities. However, the process depends on which type of business license your company had.

The business owners should get the visas and work permits of their employees cancelled before closing their company in Dubai. The owner needs to give a paid notice of two months to the employees.
Closure or cancellation of the utilities is also mandatory. For example, cancelling your company’s account with DEWA and Etisalat or du; so as to get back your deposits
Closure of all company bank accounts and get a letter of clearance from the relevant bank
Finish or close the lease of the office or warehouse

Steps to be performed before company liquidation in Dubai:

The two stages of cancellation of LLC license in Dubai are:

First Stage of cancellation:

Give the required notice to all the existing employees.
Pass a resolution for dissolution of director resolution and then get an appointment of a liquidator, which needs to be attested by a Notary Public.
Get a letter from one of the appointed liquidators and then submit with along with a License Copy, the registration certificate that is given by the auditor, a certificate that authorizes the signature, and is attested by a Notary Public.
Fee to be paid to DED for issuing a company liquidation certificate.
Give a liquidation advertisement in a couple of leading, local Arabic newspapers for a day. Then after a wait time of 45 days in which it is reviewed if there are any claims against the company.

Second Stage of cancellation:

Submit the original advertisement and final audit report to the DED.
Present the confirmation of the liquidator and all the partners proving no objection.
Cancel all visas of the partners. Then get a clearance letter from the Ministry of Labor.
Submit a copy of Director Board resolution and a copy of liquidation certificate.
Fee payment to DED for the DED license cancellation.

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What is the company liquidation process in Dubai?

What is the company liquidation process in Dubai?

Documents Required for Company Liquidation in Dubai

Liquidators in Dubai

Business Liquidation Services in UAE

But why is company liquidation required?

In which all situations, do you need to cancel your trade license?

Steps to be performed before company liquidation in Dubai:

First Stage of cancellation:

Second Stage of cancellation:

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