Voluntary liquidation of the company in the UAE is widely regarded as the best exit strategy for business owners if the business is not doing good and survival is difficult. The procedure of winding up a company in the UAE is almost the same across all the free zones and the mainland, however, there are certain differences in the procedure depending on the free zone authorities. Company liquidation in Masdar City free zone, Abu Dhabi is based upon the Masdar City Companies Registration Regulations. You can assess the regulation with the help of company liquidators in the UAE.
Business owners wind up a company in Masdar City on account of a diverse range of reasons including debt, loss, cash crunch, adverse market conditions, low demand for products in the target markets, achieving the business objectives etc. Whatever be the reason, you can opt for summary winding up in Masdar City as a viable and efficient exits strategy. You need to execute the following steps to successfully close down a company in Masdar City free zone, Abu Dhabi:
Board Resolution to Wind up the Company
A company can be closed down in Masdar City by making a statement of solvency in the form of a board resolution. The board resolution for summarily winding up the company must be passed within 28 days after each director signs it. It must be delivered to the Registrar within 21 days of passing the resolution.
Appointment of a Liquidator
Once the summary winding up of the company starts, you need to pass a resolution to appoint a liquidator to carry out the liquidation of your company in Masdar City. The company liquidators in the UAE can be any audit firm holding a valid license to carry out their operations in the country.
Letter of Acceptance from Liquidator
The liquidator should confirm his appointment by submitting a letter of acceptance to the free zone Registrar. Once the liquidator has been appointed, all the powers of the directors cease. All their powers, thereafter, will be exercised by the company liquidators in the UAE.
Cancellation of Visas
The rules of company liquidation in Masdar City mandate the business owners to cancel all the visas under the company including that of the employees. You should get clearance from the immigration and labour departments to expedite the process of winding up the company. Do not forget to cancel the establishment card of the company to smoothly progress to the next steps in the process of company liquidation.
Obtain Clearance Certificates
You must return all the keys to the facilities and obtain a clearance letter from the leasing department in Masdar City free zone. The clearance certificate should include the date on which the company will vacate the Masdar City premises. Apart from the leasing department, you must also obtain No Objection Certificates (NOC) from Abu Dhabi Customs, Abu Dhabi Distribution Co (ADDC) and Etisalat / Du. You should also close the bank account under the company’s name and obtain a closure letter from the bank.
An advertisement of the company’s liquidation must be published in a newspaper prescribed by the Masdar City free zone Registrar. The notification should be published in both English and Arabic newspapers. The notification period of 45 days allows creditors or other parties to make any claim towards the company’s liquidation. Any claim or objection made after the notification period will not be entertained by the Free Zone Authority.
Return of Original Documents
All the original documents issued to the company at the time of incorporation must be returned to the Free Zone Authority. The documents to be returned include Company Original license, Certificate of formation & Share certificates, Lease agreement etc.
If your company is a VAT registrant, it is mandatory for you to apply for VAT deregistration within the stipulated timeframe. As per the UAE VAT Law, the Federal Tax Authority (FTA) must receive the application for VAT deregistration within 20 days of a company becoming eligible for it. Companies under liquidation in Masdar City will face penalties up to AED 10,000 if they fail to meet this requirement. Most companies forget this crucial requirement and incur hefty penalties.
Economic Substance Regulations Compliance
Companies under liquidation in Masdar City free zone must ensure whether they fall within the scope of Economic Substance Regulations (ESR). If yes, they should meet key ESR requirements such as ESR Notification filing, ESR Report submission and Economic Substance Test. Failing to comply with ESR will lead to hefty penalties and reputation damage.
Ultimate Beneficial Ownership Compliance
Companies undergoing Liquidation in Masdar City are required to comply with the Ultimate Beneficial Ownership (UBO) requirements as prescribed in the Cabinet Decision No. (58) of 2020. You must hand over the Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the Masdar City Authority within 30 days of appointing the liquidator. Furthermore, the liquidator or administrator must maintain the RBR and PSR for at least five years from the date of liquidation of the company. Meeting UBO requirements is mandatory to avoid hefty administrative penalties.
Submission of Liquidation Report
The summary winding up of a Masdar City Free Zone Company will conclude when the liquidator submits the final liquidation report to the Registrar. The Registrar will remove the name of the company from the Register and cancel the license of the company. Hire the best company liquidators in the UAE to have a hassle-free liquidation process.
Hire the Best Company Liquidators in the UAE
The process of company liquidation in the UAE has become complicated with the introduction of VAT, ESR and UBO. Business owners are now required to assess their compliance status with each of these regulations before commencing the process of company liquidation in the Masdar City free zone. However, hiring the best company liquidators in the UAE such as Jitendra Business Consultants (JBC) can help you ease the complexities of the process.
Our liquidators in the UAE are highly qualified and have sufficient experience in the industry. We are the best in the UAE when it comes to liquidating mainland Limited Liability Companies (LLC), free zone entities, and offshore companies. We will advise you on how to ensure compliance with VAT deregistration, ESR and UBO. Avail of our company liquidation services in the UAE to close down a company without any hassle