Can I close my LLC company and pay off all my debts and liabilities if the the license is expired?

Hello,

If your company license expired in December 2024 and you haven’t renewed it yet, the company will no longer be legally allowed to operate or conduct business.

However, the expiration of the license doesn't immediately mean you can’t settle your company’s outstanding liabilities (such as debts, supplier payments, etc.) or personal debts.

In general, you can still settle your company’s liabilities (like loans, supplier debts, or other financial obligations) after the license expires, provided you are in the process of closing the business.

For further assistance, kindly share your Whatsapp number.

Dear questioner

Yes, you settle the personal liabilities and the company liabilities with settlement letters.

It will be better to cancel the company trade license without renewal procedures through winding up, it may take 2 weeks at least to complete the procedures without any complications.

If you need our assistance, kindly share your Whatsapp number.

Dear Client,

Thanks for your question!

I hope you are doing well. I will assist you in this matter.

Closing your Sharjah LLC without renewing the expired license is not advisable. Operating without a valid license is illegal in the UAE.

You need an active license to settle debts and complete the liquidation process legally. This typically takes 2-3 months and involves appointing a liquidator, obtaining clearances, and settling all liabilities.

To avoid legal complications, renew your license for the minimum required period and initiate the proper liquidation process immediately.

Thanks & Regards,

ABDUL WAHIED

Under UAE law, you cannot close the company or settle debts without renewing the license, as renewing the license is part of the necessary legal process to maintain the company's legal status.

Even if you plan to leave, you need to renew the license or complete the closure procedures before departure.

We recommend sharing more details with us for accurate and comprehensive advice on how to handle this process. Our office specializes in such cases and will assist you in taking the correct legal steps.

We suggest selling the company

We can assist you also in transferring your shares if you find a buyer.

Regarding settling the company debts, we might need more clarification on how much the total debts are and if you have engagements with debtors including lease reviewing these legal documents is very important to evaluate your legal position and save you money by taking calculated legal solutions

How to make this happen we suggest that you contact us through WhatsApp.

Dear Sir,

Greetings of the day,

To legally close your company, you must follow the procedures outlined by the Sharjah Economic Development Department (SEDD) and other relevant authorities.

Key steps:

1. Officially apply to cancel your company’s trade license before it expires completely.

Failure to cancel the license could result in penalties for non-renewal.

2. Notify your landlord and terminate the tenancy contract in line with the terms agreed upon in the contract.

You must clear outstanding dues with the landlord to avoid legal issues.

3. Pay off all company-related debts, including supplier invoices, employee settlements, and utility bills.

Personal debts and company liabilities must be settled separately, but both must be resolved before you leave the UAE.

4. From relevant departments such as utilities (SEWA), the Ministry of Human Resources and Emiratisation (MOHRE), and the General Directorate of Residency and Foreigners Affairs (GDRFA) for employee-related matters.

5. Publish a notice of liquidation in two local newspapers, giving creditors 45 days to raise claims.

Best regards,

Law Department

Good morning,

In the UAE, when you decide to close an LLC (Limited Liability Company), there are specific legal processes and obligations to follow, even if you intend to settle any personal and company liabilities before leaving. Below are some key points to consider based on your situation:

Company License Expiry and Renewal: If your company license expired in December 2024, technically, the business is no longer in good standing with the relevant authorities.

Not renewing your company license would prevent you from continuing any business activities. However, for closure purposes, the business still exists in a legal sense until it's formally liquidated or deregistered.

Settling Debts: You can indeed settle personal debts and company liabilities after the license has expired, but you will need to ensure that you complete these obligations in a manner that complies with UAE law.

The key here is that to officially close the company and remove it from the registry, you would still need to follow a legal process (including liquidation) even if you don’t intend to renew the license.

Tenancy Contract: Typically, a tenancy contract is tied to the license and will also need to be terminated or renewed if you wish to continue using the office.

If you don’t renew the company license, the landlord might still hold you liable for the tenancy, especially if it is in your company's name.

It's advisable to communicate with your landlord regarding your intention to terminate the contract. The landlord may require notice per the lease terms.

Legal Steps for Company Closure: To avoid further liabilities such as license fees, penalties, or tenancy costs, you should initiate the process of liquidation or deregistration.

This involves submitting various forms to the Department of Economic Development (DED) or the relevant authority in Sharjah and completing any financial matters such as settling debts, closing bank accounts, and handling employee end-of-service benefits, if applicable.

If your company license expires in December 2024, you may have some grace period (usually around 30-90 days after expiry) to complete the liquidation process without facing penalties.

However, this period can vary, and you should confirm the exact terms with the Sharjah Economic Department or a local legal advisor.

Keep in mind that the longer you wait, the more complicated the process can become due to penalties, fines, or other legal issues.

Timeline: Ideally, you should begin the liquidation process immediately to avoid any fines or further liabilities.

The sooner you start, the better, as it will give you time to resolve any outstanding debts and close the company officially before you leave.

If you plan to avoid the license renewal and tenancy contract costs in the next 2-3 months, acting quickly is essential.

Recommendations:

Contact the Sharjah Economic Development Department (SEDD) for clarification on the grace period and specific requirements for company deregistration.

Speak to your landlord to negotiate the termination of the tenancy contract without incurring further costs.

Engage a legal or business advisor in the UAE to help you navigate the liquidation process, especially if you have personal and company liabilities to settle.

In summary, while you can pay off debts and liabilities without renewing your license, it’s important to understand that you still need to follow the official company closure process to avoid legal issues down the road.

The timeframe for this will depend on local regulations, so acting sooner rather than later is crucial.

Let me know if you need further clarification!

Mohammed Salah

Legal Consultant

Hello,

As per your query, please note that the cancellation process requires NOC from local if it's not 100% owned.

The timeline for such closure requires 15 days to 1 month as per the documents' availability.

Please contact us by email or call.

Yes, you can leave the company’s obligations without paying, but if there are checks signed by you as the director.

It is better in this case to file a lawsuit for the liquidation of the company so that you can return again to the state.

Contact us on the phone.

Avoid renewing your license and lease if you plan to leave.

Make sure all financial and legal matters are in order before you leave to avoid any future repercussions.

Good Morning,

Thank you for reaching out with your query regarding the closure of your LLC in Sharjah.

In your situation, settling personal and company liabilities without renewing the company license or tenancy contract may pose challenges, as an active trade license is typically required to process financial settlements, cancel visas, and complete company deregistration with the authorities.

However, there are specific procedures for liquidating a company and avoiding unnecessary renewal costs. These include:

Freezing the License: Some authorities may allow temporary freezing of the license to avoid renewal fees while you process the closure.

Initiating Liquidation Process: The liquidation process can start immediately, provided you issue a legal notice in newspapers and clear outstanding debts.

Settling Liabilities: Personal liabilities can be settled separately, but company debts must be cleared or negotiated before final deregistration.

The timeline for liquidation typically ranges between 2 to 3 months, depending on the complexity of liabilities and approvals required.

I recommend scheduling a consultation to review your company documents and liabilities in detail and develop a customized strategy to close the company efficiently.

Feel free to reach out to me via WhatsApp or phone to discuss this further.

Best regards,

Suhail Rana