WHAT HAPPENS IF YOU DON'T CLOSE THE COMPANY

WHAT HAPPENS IF YOU DON'T CLOSE THE COMPANY

What happens if we don’t close the company?

There are multiple reasons to liquidate the company in Dubai if you do not really work in it. There are legal and moral obligations associated with the same. The possible issues expected while you are running away from the country without closing the company. They are as follows:

The liquidation of free zone company in Dubai

However, the Free zone companies are independently set up in the mainland of Dubai and system is connected with immigration and other third-party government departments. Most of the free zones will send your personal information to the department of security and CID under immigration to analyze your personal background. The country has got a strong motto of national development in a clean ambience. The security department in immigration has the right to approve or disapprove the candidature at any point in time. If the approval from the security department is processed, you will be able to set up your company in Dubai, under the free zone. It can affect your security file if you have not managed to exit the legal procedures in a clean way. Therefore, we recommend you to liquidate the company in a proper way through the steps below:

1. Cancel the visas from the free zone.
2. Take the clearances from Etisalat (telecom provider)
3. Clearance from custom
4. Clearance from RTA
5. Clearance from Chamber (if any)
6. Liquidate the company and get No Liability Letter from Registrar of companies
7. Close the corporate bank account linked with the company get No Liability letter

If you manage to do the above in a proper way, you will be free from your obligations, but in general, we highly recommend you to do the minimum the step No1 and 2 to save associated fines at immigration, and company through immigration etc. The bank account also is required to wind up to avoid personal liabilities and that might not get affected the credit score of Etihad Bureau.

Liquidation of mainland companies and winding up procedures in Dubai

The liquidation of a mainland company takes minimum of 60 days including the news-paper advertisement, legal approvals, and clearances. If you do not want to get hang on in the security departments, or any other relevant departments, we strongly recommend you to wind up the company in Dubai through the following procedures.

1. Board Resolution at court for cancelling the license
2. Initial approval
3. Auditor’ report or appointment of auditor depends on the company status.
4. Newspaper advertisements for 45 days
5. Clearance from Etisalat, RTA (If you have a vehicle), Labour and immigration
6. Final submission of docs

Liquidation of offshore companies

Liquidation of offshore company is not mandatory if you do not want to run the business since those companies would strike off from the active list of registered companies and eventually become a doormat. Unlike other legal entities, offshore company also have the same procedures to close the company, be it in Dubai or any emirates. The steps involved in the closing of offshore company.

1. Prepare the Board resolution by partners
2. Audit report
3. Registered agent’s resolution and application
4. Payment.

The cost of liquidation in the UAE.

The average cost of winding up a company will be roughly 10,000 AED as statutory fee and professional service fee. The liquidation service in Abu Dhabi is slightly different

Important point

Do not hold visas under cancelled or unrenewed companies due to legal barriers.