Businesses looking for the best exit strategy can consider voluntary company liquidation in ADGM. This process will enable shareholders or directors to end the operations of their company legally, satisfying the demands of all stakeholders, including employees and creditors. However, you need to appoint ADGM-listed company liquidators in Abu Dhabi to initiate the process. The following are the key steps to liquidate a company in ADGM:
Pass a Resolution to wind up the company.
The ‘board of directors must call a general meeting to pass either shareholders resolution or the resolution’ to close down the ADGM company.
Appoint a Company Liquidator
The shareholders or directors must appoint a liquidator who will oversee the process of company liquidation in ADGM. It is mandatory to hire ADGM-approved company liquidators to wind up your company.
The liquidator Sends a Letter of Acceptance.
In the next step, the ADGM-registered liquidator is required to send a letter of acceptance to the free zone authority. The letter will be considered as the liquidator’s willingness to act as the company’s liquidator.
Cancel the Visa and Establishment Card
All the visas issued by the company, including employment visas, must be cancelled. You should also cancel the company’s establishment card.
Terminate the Lease
The lease agreement must be terminated before applying for voluntary liquidation in ADGM.
Return the Original Documents
All the original documents, such as trade licenses, Memorandum of Association (MoA), Certificate of Registration, Share Certificates, etc., must be returned to the ADGM Authority.
Close the Bank Account
If you have any bank account under the company’s name, it must be cancelled before the liquidation of the company. You should also submit the bank account closure letter to the ADGM Authority.
Clearance from Authorities
No Objection Certificates (NOC) must be obtained from authorities such as Abu Dhabi Customs, Abu Dhabi Distribution Co (ADDC), and Etisalat/Du.
The company must publish an advertisement in an English and Arabic language newspaper with wide circulation. There will be a notice period of 45 days after the advertisement, during which the creditors or any interested parties can raise any claim.
If your business is a VAT registrant, it is mandatory to apply for VAT deregistration before commencing the company liquidation procedures in ADGM. The Federal Tax Authority (FTA) should receive the application within 20 days of cessation. Compliance failure will attract a hefty penalty of AED 10,000 if the company under liquidation fails to comply with this requirement.
Economic Substance Regulation
If your company has carried out any of the nine relevant activities, you must meet ESR obligations such as ESR Notification filing, ESR Report submission and Economic Substance Test. The nine 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. Compliance failure will lead to hefty penalties and other severe consequences, such as the exchange of information with a foreign competent authority.
Maintenance of UBO Registers
The company needs to hand over UBO registers such as Real Beneficiary Register (RBR) and Partners or Shareholders Register (PSR) to the free zone Authority within 30 days of appointing the liquidator. Moreover, the liquidator or administrator is required to maintain the registers for at least five years from the date of liquidation.
Submission of Liquidation Report
At the end of the liquidation process, the ADM-registered liquidator must present the final liquidation report to the Authority. The ADGM registrar will strike off the company’s name from the register upon receiving the report.
Hire ADGM-Registered Company Liquidators
Even though voluntary company liquidation in the UAE is the best exit strategy available for companies, the process may appear to be complex without prior planning. The process involves a series of steps and requirements, and that’s why you need to hire top company liquidators in UAE, such as Jitendra Business Consultants (JBC).
JBC is registered with ADGM as a company liquidator. We have liquidated both mainland and free zone companies across the UAE. Our highly qualified team of liquidators can execute the liquidation process seamlessly and in compliance with the existing regulations. JBC’s experience and learning curve will allow you to complete the process fairly quickly.