Sharjah Research Technology and Innovation Park (SRTIP) free zone offer a flexible and easy incorporation process for investors engaged in scientific activities. However, investors should also plan a robust exit strategy before starting their operations. Voluntary company liquidation in SRTIP is the best option for business owners to exit their operations when faced with situations such as debt, financial loss, adverse market conditions, low demand for products, achieving business objectives etc. Company liquidators in Sharjah can help business owners to develop a robust liquidation strategy.
The following article will enlighten you on the steps involved in the summary winding up of a company in the SRTIP free zone:
The process of company liquidation in SRTIP begins with a resolution passed by the shareholders or directors. The liquidation process will be assumed to commence from the date the resolution has been passed.
Notice to the Free Zone Registrar
The shareholders or directors should notify the free zone authority about the company’s liquidation. An official liquidator should be appointed by the company and notify the authority about the appointment. The liquidator can be any audit firm with a valid license to operate in the UAE.
Liquidator’s Acceptance Letter
Once appointed, the liquidator must send a letter to the free zone authority, accepting his appointment. At this point, the powers of the directors will cease and will be transferred to the liquidator.
Cancel All the Visas
The company should cancel all the visas under its name including that of the employees. The company’s establishment card should be cancelled as well.
Obtain No Objection Certificates
No Objection Certificates (NOC) must be obtained from the immigration and labour departments and submitted to the free zone authority. Keys to the office spaces and facilities must be returned to the free zone authority as well. All original certificates issued at the time of incorporation must be returned. Furthermore, clearance certificates should be obtained from Sharjah Customs, SEWA and Etisalat / Du. The company’s bank account must be closed and a closure letter must be obtained.
The creditors and the public should be notified about the company’s liquidation through a newspaper advertisement. The news of liquidation should be published in one Arabic language national UAE newspaper and one English language national UAE newspaper. Creditors can raise any claim during the 45 days lock-in period following the publication of the advertisement.
Apply for VAT Deregistration
A VAT registered entity undergoing liquidation must apply for VAT registration or face hefty penalties from the Federal Tax Authority (FTA). As per the UAE VAT Law, companies must apply for deregistration within 20 days of becoming eligible for it. Failing to meet this requirement will make such companies liable for a penalty of AED 10,000.
Economic Substance Regulation
Many companies undergoing liquidation in the UAE are seen ignoring the Economic Substance Regulations (ESR) requirements. Business owners often think that companies that close down are outside the scope of ESR. However, such ignorance could cost entrepreneurs hefty penalties.
Companies that have initiated the liquidation process should check if they have carried out any of the nine relevant activities such as Banking business, Insurance business, Lease-Finance business, Investment Fund Management business, Holding Company business, Headquarters business, Shipping business, Intellectual Property business and Distribution & Service Centre business. If yes, they must meet mandatory requirements such as ESR Notification filing, ESR Report submission and Economic Substance Test.
Maintenance of UBO Registers
Company liquidation in SRTIP will not be complete if the business owners ignore the UBO requirements. As per Cabinet Decision No. (58) of 2020 on UBO, a company under liquidation is required to hand over the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the free zone Authority. The registers should reach the free zone authority within 30 days of appointing the liquidator. Moreover, the liquidator or administrator must maintain the RBR and PSR for at least five years from the date of liquidation. Violating UBO requirements will attract hefty penalties.
Submission of Liquidation Report
The process of company liquidation in SRTIP concludes when the liquidator presents the final liquidation report to the free zone authority. Once the report is received, the Registrar will remove the company’s name from the register and cancel the trade license.
Hire the Best Company Liquidators in Sharjah, UAE
A robust strategy must be developed to experience a peaceful process of company liquidation in SRTIP free zone. Hiring experienced company liquidators in UAE such as Jitendra Business Consultants (JBC) will come in handy for efficiently closing down a company. JBC has a team of highly qualified consultants and liquidators in the UAE who can help businesses comply with mandatory requirements including VAT deregistration, ESR and the UBO. JBC can ensure that business owners can wind up their company in SRTIP without any hassle.