Business owners who are unable to continue the operations of their company in DAFZA need to initiate the process of liquidation. A company closes down in the UAE due to reasons including the end of the company’s term, the purpose of the company ends, partners agree to close, loss of a significant amount of funds, etc.
The companies should not wait for the trade license to expire and let the free zone authority strike off the name from the commercial register. This method of closing down the company is not recommended and it may cause the shareholders to face serious consequences. The best way to wind up a company in a free zone is to initiate the liquidation through reliable company liquidators in Dubai, UAE.
Related: How to Form a Company in Dubai Airport Free Zone (DAFZA)?
Key Steps to Initiate Company Liquidation in Dubai Airport Free Zone
1. Board Resolution
To initiate company liquidation in DAFZA, the shareholders of the company hold a board meeting to decide on the deregistration. The decision to liquidate the company is taken formally in the form of a board resolution. The shareholders also pass the resolution regarding the appointment of a liquidator who will carry out the entire liquidation process. The process must be carried out complying with all the legal requirements set out by the DAFZA and therefore the resolution must be attested by the Notary Public.
2. Official Letter from Liquidator
The liquidator could be a registered audit firm in Dubai, UAE who will lead the company’s liquidation process in DAFZA. After the board resolution, the liquidator has to present a confirmation letter accepting the responsibility of carrying out the liquidation of the company in DAFZA.
3. Application for Liquidation
An application for liquidation has to be submitted to the free zone authority to initiate the liquidation process. The application should be accompanied by all the relevant documents as requested by the authority. The DAFZA officials will verify the documents and will notify the management to go ahead with the liquidation process. If the documentation is not adequate, then the management needs to submit the additional documents/information as requested by the DAFZA. Consult the best company liquidators in Dubai to know about all the legal requirements in DAFZA.
4. Notification of Liquidation
A notification about the liquidation of the company should be published in a local newspaper to announce the company’s liquidation. There will be a 45-day grace period granted by the DAFZA during which any creditors or clients can come up with any claims over the company.
5. VAT & Branch Deregistration
VAT deregistration is an important step during the liquidation that the companies are required to ensure. The company management should apply for VAT account deregistration with the Federal Tax Authority (FTA). If the company fails to deregister their VAT account within 20 business days of becoming eligible for deregistration, a fine of AED 10,000 will incur. The management should also ensure that they have shut down the branches or subsidiaries if they have any. Once the parent company is liquidated it would be difficult to liquidate the branches and subsidiaries because the board resolution is mandatory for branch liquidation.
6. Clearance Letter from Service Providers & Customs
The company should obtain a clearance or no due letter from the utility service providers and other organizations to successfully complete the liquidation in DAFZA. The company should submit to DAFZA the clearance letters from Etisalat, DEWA, and the banks. The companies should also submit a customs clearance letter if applicable.
7. Cancellation of Visas, Bank Account
The companies need to cancel all the visas of the employees to ensure that the liquidation is completed without any delay. All the visas, ID cards, and immigration cards should be cancelled before completing the liquidation process in DAFZA. The companies should close the bank account and obtain a closure letter from the bank.
8. Liquidation Report
At the final stage of the company liquidation in DAFZA, the official liquidator will submit the liquidation report to the free zone authority. In case, the report contains the financial statement from the last Financial Year, the signature of the shareholder of the director of the company should be put on the Financial Statement.
Related: LLC Company Liquidation in Dubai
Company Liquidators in Dubai Airport Free Zone
From the appointment of a registered liquidator to the deregistration of the VAT account, the company liquidation process in DAFZA is a complex process that requires professional assistance. The companies will be often under pressure during the liquidation process but at the same time, they need to ensure that they are complying with all the legal requirements. In such a situation, a reputed DAFZA liquidator like the Jitendra Business Consultants (JBC) comes to the aid of the companies. JBC has years of experience in providing the company liquidation services in Dubai free zones. JBC’s highly qualified liquidators will take care of all the liquidation documents, utility cancellations, clearance certificates, etc to make the liquidation process in DAFZA smooth.