DDA Liquidation in UAE: A Step-by-Step Guide

The Dubai Development Authority (DDA) liquidation process is necessary for businesses operating in Dubai that have decided to cease operations. Liquidation, also known as winding up, is the process of shutting down a company and distributing its assets to creditors and shareholders. In Dubai, the DDA is responsible for overseeing the liquidation process, ensuring that it is conducted fairly and orderly.

Proper liquidation procedures are essential to avoid any legal or financial complications. If a company fails to follow the correct liquidation process, it may face penalties, fines, or even legal action. Moreover, improper liquidation can damage the reputation of the company and its stakeholders. In this blog, we will provide a step-by-step guide on how to liquidate a company in Dubai, including the required documents, procedures, and fees. We will also highlight the importance of seeking professional help to ensure a smooth and hassle-free liquidation process.

Documents Required for DDA Liquidation

 These are the documents that have to initiate the liquidation of DDA: 

1. Board Resolution

• It is a conformational document concerning the company's decision for liquidation.
• Signed resolution by all directors stating that the company has been decided to be wound up and the liquidator has been appointed. 

2. Newspaper Advertisement

• The advertisement of liquidation to the public.
• Advertisement in a local newspaper to inform creditors and stakeholders about the decision of the company to go for liquidation. 

3. Liquidation Report

• Provide the company's assets, liabilities, and financial position details.
• Report to be prepared by the liquidator. This report is about the financial condition of the company and its assets and liabilities.

4. Liquidator's Undertaking Letter

• To confirm whether the liquidator accepts his position or not.
• This will be a document duly signed by the liquidator under which he confirms undertaking the fulfillment of his duties as per UAE laws and regulations.

5. Clearance Certificates

1. To confirm the company's compliance with all regulatory needs.

2. Clearance certificates issued from all the departments, such as

• Lease clearance
• Customs clearance
• Tax clearance
• Labor clearance
• Environmental clearance (if applicable)

6. Audited Financial Statements

• To provide a financial snapshot of the company.
• Audited financial statements of last year, audited by a certified auditor.

7. Memorandum of Association (MOA) and Articles of Association (AOA)

• To verify the constitutional documents of the company.
• Photocopies of the MOA and AOA, or certified true copies.

8. Power of Attorney (POA)

• To authorize the liquidator.
• POA document having proof and an attestation by the relevant authorities to show that the liquidator is authorized to represent the company.

Extra Requirements

• All documents should be in Arabic or English.
• The relevant authorities should authenticate them.
• Licensed and registered with DDA liquidator.

Liquidation Process: Step-by-Step

Step 1: Preparing and Attestation of Documents

• Preparing and attestation of all relevant documents like Board Resolution, Newspaper Advertisement, Liquidation Report, etc.
• Document Attestation might be in Arabic or English
• Obtaining attestation from relevant authorities, such as the Ministry of Foreign Affairs, Dubai Courts, etc.

Step 2: Uploading Documents on DDA Portal

• Registering on the DDA portal known as the AXE portal
• Uploading the attested documents
• Ensure that the documents are valid as per DDA requirements

Step 3: Fees Payment

• Pay liquidation fees (AED 1520).
• Payment of liquidation fees can be made online at the AXE portal.

Step 4: Signing Board Resolution

• Obtain a date with a DDA officer
• Get the Board Resolution signed in the presence of the DDA officer.

Step 5: Clearance from Relevant Departments

Clearance certificates from

• Lease department
• Customs department
• Tax department
• Labor department
• Environmental department- if exists  Clearance certificates are submitted to the DDA.

Liquidation Report Submission

• Liquidation report is submitted to DDA, It is ensured that the submissions made are up to the mark to meet the DDA requirements.

Final Approval

•  Final approval is taken from the DDA Liquidation completion confirmation 

Timeline

• Preparation and attestation of documents: 2-3 working days
• Uploading of documents to the DDA portal: 1 working day
• Payment of fees: 1 working day
• Form and passing of the Board Resolution: 1 working day
• Clearance from other departments: 3-5 working days
• Liquidation report submission: 2 working days
• Final approval: 2-3 working days
• Total estimated duration of 12-20 working days

AXE Portal Upload and Payment

Table of Contents

1. Uploading Documents to AXE Portal

2. Payment Process

3. Fees

Signing Board Resolution and Clearance Requirements

The presence of a DDA officer is also an integral part of the signing process of the Board Resolution during the liquidation process, which confirms the winding up of the company. Clearances from other departments are also sought to facilitate smooth processing. The same will include a no objection certificate from the leasing department, customs clearance, tax clearance certificates, labor department clearance, and environment department clearance if applicable. In fact, it is quite very important to check specific clearances with the DDA and relevant departments because based on the company's conditions more clearances may be required. Therefore, with all these steps completed, companies can smoothly liquidate without stumbling over obstacles.

Conclusion

The DDA liquidation process is not simple. Many such detailed steps range from the preparation of documents to clearance requirements. It would thus require a clear understanding of what documents are required, what procedures are followed when making payments, and what clearance requirements are. Following these steps ensures that it will be an easy transition for any company in case of DDA liquidation otherwise uncertainty will require the most expert guidance. Such companies would further require guidance from consultants who are well-versed in the setup and liquidation process of businesses in UAE, like Reyson Badger they would be helpful throughout your process. Companies should not shy away from consulting professionals to obtain compliance with the applicable laws and avoid liability for non-compliance with DDA in case of any violation. With the right advice, a company can have successful liquidation and an easygoing future without stress.