It is not a matter that what types of license you own here in UAE but you must cancel the trade license if you made the decision to close the company. If the trade license is not renewing after the expiry date, there will be a fine and penalties on your trade license from the government authorities. There is one month grace period after the expiry of the trade license. During this grace period, the company can decide whether will go for the renewal or cancellation. Because it is a lengthy process, so it may take minimum 40 to 60 working days to cancel the trade license in economic department.
License cancellation procedure depends upon the types of the company. Sole establishment or civil company cancellation is easier than the limited liability license cancellation. But before cancellation, company has to get some clearance from the relevant government department such as
• Ministry of labour department
• Bank account closing
• Immigration department
• Dubai Water and Electricity
• Office tenancy termination
General Requirements for license cancellation:
For license cancellation, the company must appoint an auditor if the company structure is Limited liability company.
Mainly the process involves two stages:
• Prepare the cancellation application
• Cancel the all the employment visa under the trade license and get the clearance from ministry of labour department
• Prepare the board of resolutions to appoint the liquidator for the license cancellation.
• Prepare the cancellation contract in the notary public
• Publish the newspaper advertisement 45 days in two local newspapers for the cancellation. Within 45 days time periods, the supplier can submit their claims. If anyone claims during the
period of advertisement, then you have to settle them. The reason for the cancellation should be mentioned in the advertisement as well.
• Cancel the visa, if shareholder having the partner visa
• Cancel the company establishment card then get the clearance from immigration department
• Collect the clearance from DEWA, Etisalat etc
• Clearance from the Dubai customs
Once you have submitted the above-mentioned documents to the economic department they will issue the payment voucher for the license cancellation. As soon as you make the payment they will issue the license cancellation certificate.
Freeze trade license:
In order to avoid the cancellation cost, Dubai economic department allow freezing the license with a limited time period from one year to Three years. During this time period company trade license will be frozen, stopped all company activities. This is possible only when there 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.
This blog post is written by Mr. Sajith. Feel free to call our Business Advisor today for a quality consultation relating your Business queries. Please send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366.