Dubai Development Authority (DDA) | Company Liquidation Procedure
Dubai Development Authority (DDA)
Company liquidation is the process by which a company chooses to shut down its activities. When a corporation decides to go into liquidation, it sells its properties to pay off its liabilities, commitments, and debts. The money raised from the selling of the properties is used to pay off debts and distributed to shareholders. In UAE, there are many types of corporations, including sole proprietorships, free zone companies, and limited liability companies.
The Dubai Development Authority (DDA Dubai) plays a significant role for the country’s growth and economic development. It has developed a standard for the upkeep of global standards in real estate growth, urban planning, and business & municipal services.
Stakeholders, and even the DDA’s strategic partners and real estate developers, prosper when the government authority ensures a comfortable market environment and leads it to excellence. The department contributes to the emirate’s and nation’s economic development. It focuses on delivering the highest standard of services, ideals, and strategies to change UAE and achieve global success.
Steps involved in the Liquidation Process with DDA Dubai
If someone wishes to liquidate their company with DDA, there are a list of steps involved that are needed to be followed which are as follows:
Step 1- Provide Dubai Development Authority (DDA) with a notice
You must notify the Dubai Development Authority of your intention to close the business before doing so. The purpose for your company's termination must be stated in the notice. It must be submitted one month prior to the liquidation; else, the lease agreement’s fine shall be enforced.
Step 2- Attest a board resolution
A deregistration board resolution must be drafted and attested in the presence of authorities. Whereas if shareholders are unable to attend in person in case they live outside the nation, the board resolution must be notarized and attested by the UAE embassy in the nation where the company owners are located. The UAE Department of Foreign Affairs would then have to legalise the document.
Step 3- Handing over of keys
The business must hand over the office keys to the Dubai Development Authority, as they are no longer permitted to use the premises for other purposes. The office lease arrangement has been terminated.
Step 4- Announcement of the liquidation of company
The company must inform the public about the corporation's liquidation by publishing an announcement in two local newspapers. It is important to distribute information in both English and Arabic.
Step 5- Submission of the original documents
Original documents must be returned to the Dubai Development Authority, including licences, business formation certificates, lease agreements, additional activities licences, permits, and so on. After the liquidation application is sent, these records will no longer be relevant.
Step 6- Receiving clearance from the authorities
It is essential to acquire approval from the authorities including Dubai Customs Department, DDA Finance Department, Etisalat Clearance, DDA IT Section, DDA Government Services Department, Facilities Management Clearance; before the liquidation process can be completed. The authorities conduct a due diligence and fraud investigation of the company. The company's termination will be feasible only after such authorities have given their approval.
Step 7- Filing a liquidation report
A liquidation report, which provides details on the company's finances during the period of closure, is required by the Dubai Development Authority. This will be performed by a Dubai-based registered auditor.
Basic requirements for company liquidation in Dubai Development Authority
To liquidate the Company in free zones, the Board of Directors must pass a resolution. Liquidation of a business in a free zone requires appointment of only registered and authorised liquidators in the UAE. When liquidating a company in a free zone, all employee visas must be cancelled and cleared. Only registered and authorised auditors for free zones in the UAE must receive the liquidation document. Certificate of clearance from the free zone authority, certificate with No Objection from the Business Unit of Commercial Licensing Division and Government Section Clearance Certificate is required.
Conclusion About Dubai Development Authority
It is reasonable for a company that wants to liquidate to be concerned about the process and whether they will be able to finish it successfully. Fines and penalties can be imposed if a mistake is made during the process. To prevent this and ensure that the company is properly liquidated, it is important to employ a company liquidator in the UAE.
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