Chinese English

The importance of maintaining a company in good standing in the UAE

MEDIA / Articles / 2021 / The importance of maintaining a company in good standing in the UAE
The importance of maintaining a company in good standing in the UAE

A business entity is considered to be in good standing by fulfilling all obligations on annual basis related to its company registration whether its mainland, free zone or offshore company. These may include but are not limited to:
  • Paying annual registration renewal fees
  • Submission of Audit Reports for free zone companies
  • Obtaining a Certificate of Good Standing)
  • Maintaining a registered agent
What will happen if a company is no longer in good standing?
If a company does not maintain good standing, the status will immediately change as inactive and strike off at a later stage. As a result, the company registrar cannot process any company’s request such until the good standing is not restored.
The registrar may also impose fines or penalties on companies that fail to comply and lose good standing.
The company bank account may freeze if company is not in good standing as bank usually require an updated Certificate of Good Standing or renewed license to update in their system. If a business can’t provide a Certificate of Good Standing, it raises a compliance “red flag” that indicates something’s wrong with the company’s status.

Why is it important to maintain a company in ‘good standing’?
Maintaining good standing is an essential part in business industry as following reasons will be considered;
  • this will serve as a license for continues business operation
  • Avoid costly fines or penalties
  • Keeping the company’s up-to -date
  • Maintaining good records with the company’s registrar
  • Quickly obtain any documents required from the relevant Authority
  • Keeping the bank account active

Do you wish to stay informed?

Thank you for your interest in Freemont Group, the specialists in company formation, asset protection and legal and advisory . Feel free to contact us with any inquiry you might have. We will provide you with a free initial consultation, and a customized solution for your personal situation.