How to legally close an LLC in UAE without going to court

Question: We are partners in a limited liability company (LLC). We would like to know how to legally close a company and whether this must be done before the competent court. Please advise.

Answer: If the partners agree to dissolve the company, there is no need to file a case before the competent court. The partners’ agreement shall include the method of liquidation or nominate a liquidator provided that the liquidator is not currently an auditor of the company or has already audited its accounts within the five years preceding the appointment. The terms provided for in the Memorandum of Association or Statute of the Company shall be followed in the company dissolution. Otherwise, the provisions of the Commercial Companies -Law shall apply to the liquidation of the company.

The liquidator shall, according to Article 318 of the Commercial law, enter the decision of his appointment and the agreement of the partners, or the decision issued by the general assembly concerning the method of liquidation or the judgment issued for such purpose in the commercial register. The liquidator shall, prepare an inventory of all the assets and liabilities of the company.

The managers or the chairman of the board shall provide the liquidator with the books, documents, and accounts of the company. The liquidator shall notify all the creditors by registered letters with acknowledgment of receipt of the commencement of the liquidation, inviting the creditors to submit their claims. The notice shall be published in two local daily newspapers; one of them in Arabic.

The assets of the company resulting from liquidation shall be divided among all the partners upon payment of the debts. Each partner, upon division, shall obtain an amount equal to his share in the capital, and the balance shall be divided among the partners pro rata to their shares in the profits.

If a partner fails to appear to collect his share, the liquidator shall deposit such share in the treasury of the competent court. If the net funds of the company are not sufficient to pay the shares of the partners in full, the loss shall be distributed among them in accordance with the prescribed rate for the distribution of losses.