If any business registered in UAE, wishes to cancel their License and De-register the company, they have to receive the cancellation certificate from relevant authority. In case of Non-Renewal of License relevant authority will initiate the trade license cancellation and De-registration as per Licensing Regulations. For any entity which is established or going through liquidation process has to follow cancellation steps in order to get the legal work done regarding their licenses. License cancellation procedure depends upon the types of the company. In this article we have streamlined some major licenses active in UAE.
- Trade license: This will cover all trading activities
- Industrial license: For manufacturing and industrial working
- Service license: doctors and lawyers
Conditions for cancelling trade license
It is very important to get the clearance from the government authorities. This may avoid incurring any fine or penalties on your license when it is not renewed upon its expiry.
It is important for relevant government entities to know that you are no longer in the business so you will avoid any accumulated fines and penalties incurred upon your licence, when it is not renewed upon expiry date.
If you are in a shareholding company, it is important to discharge your liabilities towards creditors and partners and protect your interests and shares.
It is also wise to put your goodwill and business reputation in perspective, if you decide to open a business again.
Initial stage of cancelling trade license
Cancelling the licence depends on the form of your company. For establishments and sole proprietorship, the process is simple because all you need to do is to apply for cancellation through DED and acquire all relevant clearances from:
Company has to get clearance from relevant government authorities such as
- Approval from ministry authorized to undertake cancellation of trade license
- Closing of bank account
- Approval from immigration department
- Approval from any water and electricity authority
you need to appoint a liquidator if the legal form of your company is one of these:
- General Partnership
- Limited Liability Company
- Simple Limited Partnership
- Public Joint Stock Company
- Private Joint Stock Company
Process for cancelling trade license (for all companies)
- Stage 1 Drafting of resolution: Prepare the board of resolutions to appoint the liquidator for the license cancellation, also prepare the cancellation contract in the notary public
- Stage 2Application for cancellation of trade license: as the first stage the required person has to draft an application for cancellation of trade license.
- Stage 2 Cancellation: Cancellation of all the employment visa under the trade license and get the necessary approvals.
- Stage 4 Publication: liquidation advertisement is to be published in two local newspapers. Confirmation of the Liquidator and Partners that there is no objection from the third party during the publication period.
- Stage 5 Clearance: The visa and company established card will be cancelled and the owner will receive clearance from relevant authorities.
Freeze trade license
Dubai has launched a facility which may allow freezing the license with a limited time period (can be from one year to Three years). During this time period companies trade license can be frozen (stopped all company activities). This is possible only when there are no more employees in the company and no legal action against the company at the present. But Creditors still can claim against the frozen company.
closing a Business in a Free zones of Dubai
There are three types of closures for Free zones companies
- Summary Winding up- when a company has no liabilities or is able to settle the liabilities within 6 months and commence with a statement of solvency
- Creditor winding up- Company passes a resolution for winding up and is followed by a meeting with the company’s creditors
- Bankruptcy- Done by the Court under UAE Commercial Transaction Law No.18 of 1993.
The process of cancellation or deactivation of trade license in Dubai is different for different types of companies. License deactivation for civil company or sole establishment is relatively easier as compared to the license of LLC (limited liability company). It is important to note that it takes around 40 to 60 days to cancel trade license in the DED (Dubai Economic Department). It is better to hire a specialized agency that would do the process for you and save you the hassle. Experts can provide easy cancellation services to all types of documents whether it’s trade licenses or visas for more information contact our experts.
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The whole process for license cancellation can be simple if you seek help of a liquidation expert in UAE. Farahat and company is specialized in dealing with different liquidation process including cancellation of trade license in UAE. For quality consultation contact us now