No matter what kind of Company you run in the UAE, you are required to cancel your business license and all relevant permissions as soon as you decide to close your Company. The procedures for proper Company Liquidation in UAE Free Zones and cancellation of its license are summarized in this article.
Why is a Business License Cancellation Necessary Following Company Closure in the UAE?
The appropriate governmental organizations must be informed that you are no longer running the Company to avoid any accumulated fines and penalties against your license when it expires and is not renewed. In a shareholding business, it’s critical to release your obligations to partners and creditors while safeguarding your shares and interests. If you decide to start a new firm, keeping your goodwill and professional reputation in mind is a good idea.
Company Liquidation in the UAE Free Zones
The act of liquidating a company’s assets and closing it down or deregistering it is also known as “winding up” or “closing.” One word is essential to comprehending liquidation: “insolvent.” A business is solvent if it can make its debt payments on time and insolvent if it can’t. Because it affects the sort of liquidation the Company will enter and the kinds of investigations a liquidator will do, the firm’s financial health is crucial. When a business declares bankruptcy, its assets are sold to pay off any outstanding obligations. The leftover positive balance is distributed to the Company’s shareholders after paying off the creditors.
Company liquidation is when a company or firm ceases all of its activities, liquidates all of its assets and properties, and distributes unpaid sums to its creditors and shareholders. The firm may potentially be deregistered. We will assist with completing the business liquidation procedure in the UAE’s free zones.
Who is a Company Liquidator?
A Company liquidator is a person chosen to close down and dissolve a company. This person is in charge of selling firm assets to settle both internal and external debt. There are specific procedures that must be followed for a seamless business liquidation in UAE.
Read More : Company Liquidation in Dubai Silicon Oasis.
Procedure for Company Liquidation in the UAE Free Zones
The process followed in the case of Company Liquidation in the UAE Free Zones may vary across free zones, and the stages of those procedures are shown below. Each corporation in a free zone essentially follows them.
1. Obtaining a resolution from the board or shareholders is the first step
The Board of Directors passes a resolution declaring that the firm is going into liquidation and appointing liquidators to handle the process. All of the Company’s directors’ rights and duties will end upon submitting the request to dissolve the business. It is crucial in this situation that only the free zone firms appoint the authorized and registered company liquidators.
2. Obtain official notification from the free zone authority
You must submit a cancellation request to the free zone, which will also provide you with a cancellation form. The cancellation notice must be accompanied by the original, signed board resolution. To recognize the cancellation request, the free zone will send a free zone termination statement. Once the money for the cancellation is paid, the free zone will start the legal process of severing the Company.
3.NOCs and Clearances
There must be an end to all services under the Company’s name, including communications (Etisalat) and utilities like DEWA. Any commercial premises registered in the Company’s name must be canceled in addition to receiving a clearance certificate.
4. Cancellation of Work Visa
The Company must cancel any work visas and dependent visas granted in its name to employees and their dependents. UAE labor law stipulates that a company must provide an employee with two months’ paid notice before canceling their contracts in the case of a company shutdown.
5. Officially Announcement of Company Liquidation
It is necessary to publish a 15-day official notice of the firm’s closure in a local newspaper or gazette. The free zone authority must receive settlement paperwork before it issues a closure confirmation if no complaints are made.
6. Issue of Clearance certificate
For Company liquidation in the UAE Free zone, the businesses must get the free zone authority’s clearing certificate. At the time of liquidation, when the firm has paid all necessary fees and charges, the free zone authorities provide the clearing certificate.
7. Closure of Bank Accounts
Following its issuance, the firm termination letter may be used to close the Company’s bank account. Unless stated in a board resolution, any remaining bank balance will be dispersed to the former business partners.
What Is the Duration of a Company Liquidation in the UAE Free Zone?
The liquidation process may take 45 to 50 days if all other procedures and requirements are fulfilled.
How may Farahat & Co. assist you with the Company Liquidation in the UAE Free Zone?
As registered company liquidators in UAE, Farahat & Co. will assist business owners in dissolving their corporation in any of the country’s free trade zones or on the mainland. Our staff will help the business owner with the appropriate set of company liquidation processes based on the business jurisdiction and ensure the company shutdown follows UAE Company Law. To prevent fines or future entrance restrictions, entrepreneurs must immediately close their businesses following UAE Free Zone jurisdictional laws. Now Choose Farahat & Co., a professional company liquidator, if you wish to dissolve your free zone company in the United Arab Emirates. To learn more, get in touch with us.
Read More : Guide to Liquidating a Company in Meydan Free Zone.