Companies operating in the Hamriyah Free Zone can opt for voluntary liquidation if they no longer intend to continue the operations. The decision to exit the business may arise due to a wide range of reasons including, but not limited to, debt, the company achieved its goals, absconding of the founder, unfeasible operations etc. Whatever be the reason, the businesses should follow a set of standard liquidation procedures. Consult with the best company liquidators in the UAE for a hassle-free exit process.
Read ahead to get a glimpse of the key steps of procedures of company liquidation in Hamriyah Free Zone:
Signed Board or Shareholder Resolution
The process of company liquidation in Hamriyah Free Zone can be commenced with a signed Board or Shareholder Resolution. All partners or shareholders of the company should agree to the termination of the company.
Appointment of Liquidator
The shareholders are also required to appoint an official liquidator who will carry out the entire process of liquidation. Once a liquidator is appointed all the powers and responsibilities of the Directors get automatically terminated. A liquidator can be an audit firm and the powers of the Directors will be transferred to the liquidator from this point.
Official Notification to the Free Zone Authority
The Free Zone Authority should be notified about the Board decision to wind up the company and the appointment of the liquidator. The original signed Board Resolution should be submitted to the Hamriyah Free Zone Authority.
NOC’s and Clearance
All utility and telecommunications services under the company’s name must be cancelled and a NOC should be obtained from them to ensure that the company doesn’t have any outstanding dues. A clearance letter should also be obtained from the Customs Authority to ensure that the goods imported and/or exported have been cleared. The NOC is also required to show that the company has settled all the customs duties. Clearance from Immigration must be obtained after cancelling the visas and work permits for employees under the company name.
While liquidating a company in the UAE, most business owners overlook the obligation of VAT de-registration. If the company is a VAT registrant, it must close the VAT account before closing down the business. As per Article (14) of VAT Executive Regulations, a VAT-registered company must apply for VAT de-registration within 20 business days of becoming eligible. A company that fails to do so will attract penalties up to AED 10,000. The de-registration process may consume much time and it is better to apply as early as possible.
Maintaining Real Beneficiary Register
A UAE company undergoing liquidation is required to meet the requirements as per the Ultimate Beneficial Ownership (UBO) regulation. As per Cabinet Resolution No. (58) of 2020 on Ultimate Beneficial Ownership, a company that is closing down must hand over the Real Beneficiary Register and Partners and Shareholders Register if any, or a true copy to the Registrar within 30 days from the date of the liquidator’s appointment.
Furthermore, the company administrators or the official liquidator need to maintain the Registers for at least five years from the date of liquidation. In this background, it becomes imperative for the Hamriyah companies to avail reliable company liquidation services in the UAE.
ESR Notification, Report Filing Before Liquidation
A company undergoing the liquidation process is required to meet Economic Substance Regulation (ESR) obligations. If the company is carrying out any Relevant Activity during the liquidation process, the liquidator should ensure that the firm meets all relevant ESR obligations such as filing annual ESR notification, submitting ESR Reports and should meet the Economic Substance Test for any period during which it carries on a Relevant Activity and derives Relevant Income. ESR non-compliance will result in hefty penalties, therefore, consulting with top company liquidators in the UAE is important.
Notification in Newspaper
An official notification that the company is under liquidation must be published in an Arabic newspaper for 15 days. If no claims are made or are settled, proof of settlement must be provided to the Hamriyah Free Zone Authority for a closure confirmation to be released.
Completion of Liquidation
When the process of liquidation in the Hamriyah Free Zone is completed, the liquidator will submit a final liquidation report to the Registrar. The Registrar will, upon the satisfactory completion of the liquidation, cancel the license and remove the company name from the Free Zone register.
Seek the Help of Top Company Liquidators in the United Arab Emirates
Voluntary Liquidation is the best exit strategy for companies operating in Hamriyah Free Zone. Once a decision to wind up the company is made, the shareholders should appoint the best company liquidators in the UAE such as Jitendra Business Consultants (JBC) for a hassle-free liquidation process. In terms of experience and qualified professionals, JBC continues to be the best company that undertakes company liquidation in the UAE. JBC’s dedicated company liquidation services in the UAE are key to ensuring that your company is shut down in the best interests of the creditors, employees and authorities.