« Back to Glossary IndexWinding Up
Winding up refers to the process of closing a company, settling its debts, and distributing remaining assets to shareholders. In the UAE, company liquidation can be voluntary (shareholder decision) or compulsory (court-ordered due to insolvency or regulatory breaches). Businesses in mainland UAE follow Federal Decree-Law No. 32 of 2021 on Commercial Companies, while free zone companies must comply with specific regulations set by their governing authorities (e.g., DIFC, ADGM, JAFZA). The winding-up process includes debt clearance, tax deregistration, labor clearance, and trade license cancellation. Failure to properly wind up a business can result in legal liabilities and financial penalties.
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