Freezone Company Liquidation
Freezone Company Liquidation:
Are you considering closing your company in a UAE free zone? Although the term “liquidation” may sound scary, if you know what you’re doing, the process isn’t as difficult as it appears.
Let’s examine what freezone company liquidation entails, why some owners choose this course of action, the procedures involved, the documentation required, and the most frequently asked questions by business owners.
What Is Freezone Company Liquidation?
In a free zone, liquidation is simply the formal method of shutting down your company. This is what takes place:
You return or sell the company’s assets.
You settle all outstanding bills, debts, and obligations.
The business is deregistered from the Free Zone Authority.
Liquidation, in essence, allows you to end things amicably and legally.
What Makes Businesses Liquidate?
Liquidation is chosen by owners for a variety of reasons:
Perhaps you completed the project for which you founded the business. Alternatively, the company may be struggling financially and unable to pay its bills. People occasionally wish to alter course, try something else, or relocate to a different market. Partnerships also evolve. It’s possible that shareholders wish to restructure or leave.
Liquidation ensures that you close your business without any unresolved issues or potential problems, regardless of the reason.
How Freezone Company Liquidation Operates Step-by-Step
In order to maintain order and integrity, the UAE Free Zone procedure is rather rigorous. This is how it typically works:
1. Board or Shareholder Resolution
A resolution to shut down must first be approved and signed by the company’s shareholders. This will be turned in to the Free Zone Authority.
2. Employ a Licensed Liquidator
In the UAE, you require a licensed liquidator. This individual manages the financial reports, conducts audits, and ensures that debts and assets are appropriately managed.
3. Pay Off Every Debt
Pay off all outstanding bills, including government fees, suppliers, staff salaries, and more, before proceeding.
4. Terminate Employee Visas
Before proceeding to the next phase, all employee visas must be terminated and everyone should receive their final payments.
5. Return items that were leased
Close out any rental agreements and return any equipment, warehouses, or office space that you are renting.
6. Complete Audit Report
A final audit report is prepared by the liquidator to verify that all matters have been resolved. You will present this to the relevant authorities.
7. Obtain a Certificate of Liquidation
You receive a Liquidation Certificate (also known as a Company De-registration Certificate) from the Free Zone Authority after all the paperwork has been reviewed and approved. That serves as official documentation that the business has closed.
Documents You’ll Require
For the procedure, you will need to collect the following documents:
- Board or shareholder resolution for closure
- Copies of trade licenses and directors’ and shareholders’ passports
- Letters of clearance from telecom and utility companies
- Your landlord’s No Objection Certificate (NOC)
- The liquidator’s final audit report
How Much Time Does It Take?
In UAE Free Zones, liquidation typically takes 30 to 45 days. It primarily relies on how fast you pay off bills, terminate visas, and organize the paperwork. The entire process takes a little longer if something drags.
What Is the Price of Liquidation?
The size of your business, the number of responsibilities you have, and the regulations of the free zone all affect costs. You will pay for items such as:
- Fees for liquidators
- Charges for government or authority clearance
- Cancellation of visas and associated services
The majority of companies pay between AED 5,000 and AED 12,000. Your circumstances will determine the precise amount.
What Takes Place Following Liquidation?
When you’re finished:
- You are released from all financial and legal responsibilities.
- Your trade license has been revoked.
- The Free Zone register no longer has your company’s name.
- Anywhere in the United Arab Emirates, including inside the same free zone, you are free to launch a new company.
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