Everything you need to know about Merger & Acquisition

A merger or acquisition is one of the most significant events that has the potential to transfigure the entire business.

Business Liquidation in UAE Mainland

One might come across plenty of articles on starting a business in UAE, but not many on closing one. There are certain formalities that need to be taken care of once you plan to close your company.

Cancelling your business license

This is one of the primary steps when it comes to business closure. Cancelling your license will notify relevant government authorities that you are no longer in the business. Usually, when a license is not renewed upon expiry, it will result in fines and penalties. Cancelling your license on time will help avoid these.

Cancellation of license depends on the type of company. In the case of establishments and sole proprietorships, all you have to do is apply for cancellation via DED and attain necessary clearances from;

  • Ministry of Human Resources and Emiratisation
  • Directorate of Residency and Foreigners Affairs
  • The relevant water and electricity authority
  • The leasing entity

But, the process is not that simple in the case of companies with shares. This will involve more steps that include liquidating the shares, collecting debts and paying the creditors before finalising with DED.

If your company falls in any of the below categories, you must appoint a liquidator.

  • General Partnership
  • Limited Liability Company
  • Simple Limited Partnership
  • Public Joint Stock Company
  • Private Joint Stock Company

A step-by-step guide on dissolving a company (except civil companies)

  • Notarised minutes of the general assembly authorizing the company liquidation and the appointment of a liquidator must be prepared.
  • An official letter by a registered liquidator accepting the duty must be kept ready.
  • Apply for cancellation via DED or other approved channels

Upon your request for cancellation, DED will issue a liquidation certificate and you will have to publish the notice of liquidation in two local newspapers. The notice will give debtors a grace period of 45 days to submit their claims.

The next step is submitting a no objection declaration letter to the DED from the liquidator and the partners. You should then acquire required approvals from other government bodies.

Do not forget to cancel the firm card at Ministry of Human Resources and Emiratisation and the visas of foreign partners sponsored by the company at the respective General Directorate of Residency & Foreigners Affairs.


Once you submit all the above-mentioned documents and pay the fee, you will be provided with the certificate of deregistration.

If you are planning to stay away from the business for a short span and not permanently, then you do not have to terminate license. Dubai gives you the option to freeze your trade license for three years by paying certain fee. But, there is no option to extend this time period.

For a civil works company, a partnership cancellation contract authenticated by the notary public is mandatory. In the case of sole proprietorships, one need to obtain a no objection letter from Ministry of Human Resources and Emiratisation. This is in addition to a residence cancellation proof for non-Gulf nationals.

Private shareholding companies need to obtain approval from Ministry of Economy and public shareholding companies should obtain approval from the Securities and Commodities Authority.

If you plan to close down your business, just don’t leave the country without fulfilling the formalities. This might get you into legal trouble and will affect any future plans of restarting your business.

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