Opting for voluntary liquidation in twofour54 is the best exit strategy for companies operating within the free zone. Companies operating within twofour54 must plan their exit strategy such as shareholders’ voluntary liquidation in advance if not at the time of incorporation. Company liquidators in Abu Dhabi can help business owners to develop a robust exit strategy.
Companies operating in twofour54 will have to opt for the liquidation process due to diverse reasons including debt, financial loss, adverse market conditions, low demand for products, achieving the objective etc. As a business owner, you must foresee such unforeseen events from the beginning and should be ready with a strategy. Opting for voluntary company liquidation in twofour54 will allow you to exit the operations, satisfying all the stakeholders including employees and creditors.
The following article will enlighten you on the steps involved in the summary winding up of a company in the twofour54 free zone:
In the first step, the shareholders or directors of the company must pass a special resolution in writing at a general meeting to commence the liquidation proceedings. The company will be assumed to be in liquidation from the date the special resolution has been passed.
Notice to the Free Zone Registrar
The directors of the company should provide a notice of commencement of liquidation to the free zone registrar. Try should also notify the registrar about the appointment of a liquidator who will oversee the liquidation of the company. The liquidator can be any audit firm licensed to carry out its activities in the UAE. Business owners are advised to hire company liquidators in Abu Dhabi with sufficient experience in carrying out the winding-up process.
Liquidator’s Acceptance Letter
The liquidator, upon appointment, is required to send a letter of acceptance to the free zone authority. From here on, the powers of the directors will cease and get transferred to the liquidator.
Cancel All the Visas
All the visas under the company name must be cancelled, including that of the employees. You should also ensure that the establishment card of the company is also cancelled. Consult with company liquidators in Abu Dhabi to get more information in this regard.
Obtain No Objection Certificates
No Objection Certificates (NOC) issued by the immigration and labour departments must be submitted to the free zone authority. Keys to the premises must be returned to the twofour54 leasing department. You should also return the original certificates issued by the free zone authority, such as the Memorandum of Association (MoA), Articles of Association etc. You should also get clearance from various authorities such as Abu Dhabi Customs, Abu Dhabi Distribution Co (ADDC) and Etisalat / Du.
You must notify the creditors and the public about the company’s liquidation through a newspaper advertisement. The news of company liquidation in twofour54 must be published in one Arabic language national UAE newspaper and one English language national UAE newspaper. A lock-in period of 45 days follows, during which the creditors can raise a claim against the company.
Apply for VAT Deregistration
Companies that are active VAT registrants must apply for VAT deregistration. As per the UAE VAT law, companies must apply for deregistration within 20 days of becoming eligible for it. Companies failing to apply within the stipulated time will have to pay the penalty of AED 10,000.
Economic Substance Regulation
Companies that fall within the scope of Economic Substance Regulations (ESR) must meet all the relevant requirements as per the law. It means they must meet ESR obligations such as ESR Notification filing, ESR Report submission and Economic Substance Test if they have carried out any of the nine relevant activities. 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. Hefty penalties will be in store for those violating this requirement.
Maintenance of UBO Registers
Companies undergoing Liquidation in twofour54 will incur heavy penalties if they fail to comply with their UBO obligations. As per Cabinet Decision No. (58) of 2020 on UBO, companies are under obligation 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 RBR and PSR for at least five years from the date of liquidation of the company.
Submission of Liquidation Report
Concluding the winding-up process, the liquidator will submit his final Liquidation Report to the twofour54 free zone authority. After receiving the report, the free zone authority will strike off the company’s name from the register and cancel its trade license.
Hire the Best Company Liquidators in Abu Dhabi, UAE
Even though the steps associated with company liquidation remain similar throughout the UAE, companies must adopt special exit strategies depending on the requirements of the licensing authority. Hiring experienced company liquidators in UAE such as Jitendra Business Consultants (JBC) will come in handy for business owners to develop a robust exit strategy. JBC has years of experience in both company incorporation and liquidation. Our team is highly qualified to help the business owners meet complex requirements such as VAT deregistration, ESR and the UBO. JBC will ensure that business owners can wind up their company without any hassle.