Opting for voluntary company liquidation in Dubai Knowledge Park is the best way to shut down the companies registered with that free zone. Company liquidators in Dubai can help the business owners to shut down their companies in compliance with the existing laws and standard procedures. Voluntary liquidation is the best available exit strategy for business owners as it allows them to close down their companies fulfilling the interests of all the stakeholders involved including the employees. Read ahead to know about the steps and procedures associated with winding up a company in Dubai Knowledge Park:
Pass a Board Resolution
Company liquidation in Dubai Knowledge Park begins when the shareholders of the company pass a board resolution to wind up the company. The resolution must be signed by all the shareholders or directors of the company. The resolution should clearly state the reasons for winding up the Dubai Knowledge Park company. It should also be notarized by the Notary Public before submitting to the free zone authority, which is the Dubai Development Authority (DDA).
Appoint a Liquidator
An official liquidator must be appointed to carry out the procedures of company liquidation in Dubai Knowledge Park. The liquidators can be an audit firm with a valid license to carry out their operations in the UAE.
Acceptance Letter from Liquidator
The liquidator is required to send a letter to the free zone authority to confirm his appointment. The powers of the shareholders and directors will cease once the liquidator assumes charge. Appointing experienced company liquidators in Dubai is key to concluding the procedures fast.
Cancellation of Visas
All the visas under the company including that of the employees must be cancelled before winding up the company. Clearances should be obtained from the Immigration Department and Labour department in this regard. Once the visas have been cancelled, the establishment card of the company must also be cancelled.
Obtain Clearance Certificates
Clearances or No Objection Certificates must be obtained from government authorities and utility service providers. You need to obtain a NOC from TECOM Investment’s Finance Department on all outstanding liabilities. Clearance should also be obtained from the following entities:
- TECOM Leasing Department (specify the date on which the premises will be vacated)
- Dubai Customs
- Etisalat / Du
Close the Bank Account
Companies undertaking liquidation in Dubai Knowledge Park must close their bank account. A closure letter should be obtained from the relevant bank to be submitted to the free zone authority.
Return Original Documents
The company should return all of the original documents it received at the time of incorporation. The documents include Trade License, Tenancy Contract, Memorandum & Articles of Association, Investment Service Agreement, Share Certificate, Certificate of Incorporation etc.
Apply for VAT De-Registration
If the company has an active VAT registration, it must apply for de-registration before applying for liquidation. As per the UAE VAT Law, a company under liquidation should apply for VAT de-registration within 20 days of becoming eligible for it. Violating this rule will lead to a hefty penalty of AED 10,000. Company liquidators in Dubai advise the business owners to carry out this critical requirement to avoid hefty fines and unnecessary delays.
Meet Economic Substance Requirements
Companies undergoing liquidation in Dubai Knowledge Park are required to check whether they are subject to ESR requirements. Companies that carried out any of the nine Relevant Activities must meet mandatory ESR requirements such as ESR notification filing, submission of ESR Report and meeting the ESR test. The Relevant Activities are 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. Failing to meet this requirement will attract hefty penalties and other serious consequences.
Meet Ultimate Beneficial Ownership Requirements
As per the Cabinet Decision No. (58) of 2020 on Ultimate Beneficial Ownership (UBO), companies under liquidation need to hand over the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the free zone authority within 30 days of appointing the liquidator. Apart from that the liquidator or administrator is required to maintain the registers for at least five years from the date of liquidation of the company. Companies under liquidation in Dubai Knowledge Park will incur hefty penalties for violating this rule.
An original newspaper advertisement should be published in both English & Arabic Newspapers notifying the news of the liquidation. The advertisement should mention that any interested party can raise a claim against the company within the lock-in period of 45 days, counting from the date of publication. Objections or claims raised after 45 days won’t be entertained by the free zone Authority.
Submission of Liquidation Report
The liquidation process will come to an end once the company liquidator in Dubai submits the final liquidation report to the free zone authority. The Registrar will remove the name of the company from the free zone register, and the trade license of the liquidated company will be cancelled.
Hire the Best Company Liquidators in Dubai, UAE
The best company liquidators in Dubai such as Jitendra Business Consultants (JBC) can help you to close down your company without any hassle. By availing of our bespoke company liquidation services in Dubai, business owners can easily ensure that they have met all the key requirements including ESR, VAT, and the UBO. Our experienced company liquidators in Dubai can make sure that your company has been shut down in compliance with existing laws and regulations.