Companies operating in the Ras Al Khaimah Economic Zone ( RAKEZ) should opt for voluntary liquidation if they no longer intend to continue the operations. Business owners usually opt for voluntary liquidation in RAKEZ for reasons such as the expiry of the duration of the company, the occurrence of an event that requires the winding-up or the board members decide to wind up the company by a Special Resolution. A company can be closed down without any hassle if the business owners enlist the help of the top company liquidators in the UAE.
The reasons for winding up a company in RAKEZ may also include debt, the company achieved its goals, absconding of the founder, unfeasible operations etc. Whatever be the reason, the businesses should follow a set of standard liquidation procedures stated in RAKEZ Companies Regulations. Read ahead to get a glimpse of the standard procedures of RAKEZ company liquidation.
1. Board Resolution to Appoint a Liquidator
The first step of winding up a company in RAKEZ begins when the board convenes a meeting and passes a resolution to dissolve the company. As per RAKEZ Companies Regulations 2017, the company must appoint, by an Ordinary Resolution, one or more auditors as liquidators as soon as possible.
2. Notify the Authority of Liquidator’s Appointment
The Resolution on the dissolution of the company must be submitted to the Registrar of RAKEZ. The Registrar will then enter the name of the liquidator in the companies register. The Resolution must be submitted to the Registrar soon, possibly on the date on which it is issued. Consult with companies that provide the best liquidation services in the UAE to expedite the process.
3. VAT De-registration
While liquidating a company in the UAE, most businesses owners overlook the obligation of VAT de-registration. If the company is a VAT registrant, it must close the VAT account before closing down the business. As per Article (14) of VAT Executive Regulations, a VAT-registered company must apply for VAT de-registration within 20 business days of becoming eligible. A company that fails to do so will attract penalties up to AED 10,000. The de-registration process may consume much time and it is better to apply as early as possible.
4. Maintaining Real Beneficiary Register
A UAE company undergoing liquidation is required to meet the requirements as per the Ultimate Beneficial Ownership (UBO) regulation. As per Cabinet Resolution No. (58) of 2020 on Ultimate Beneficial Ownership, a company that is closing down must hand over the Real Beneficiary Register and Partners and Shareholders Register if any, or a true copy to the Registrar within 30 days from the date of the liquidator’s appointment.
Furthermore, the company administrators or the official liquidator need to maintain the Registers for at least five years from the date of liquidation. In this background, it becomes imperative for the RAKEZ companies to avail reliable company liquidation services in the UAE.
5. ESR Notification, Report Filing Before Liquidation
A company undergoing the liquidation process is required to meet Economic Substance Regulation (ESR) obligations. If the company is carrying out any Relevant Activity during the liquidation process, the liquidator should ensure that the firm meets all relevant ESR obligations such as filing annual ESR notification, submit ESR Reports and should meet the Economic Substance Test for any period during which it carries on a Relevant Activity and derives Relevant Income. ESR non-compliance will result in hefty penalties, therefore, consulting with top company liquidators in the UAE is important.
6. Clearances from Immigration, Labour and Others
Companies operating under RAKEZ Authority must get clearance in the form of a NOC from the Customs to ensure that the goods imported and/or exported have been cleared. The NOC is also proof that the company has settled all the customs duties. The companies should also obtain Visa and immigration clearances and the visas of all the employees must be cancelled. Clearance should also be obtained from utility service providers such as Federal Electricity and water authority (FEWA) and Etisalat to ensure that the company doesn’t have any outstanding dues.
7. Lock-In Period after Clearances
After securing all the mandatory NOCs, the liquidator must notify, by registered mail, all the creditors about the commencement of the liquidation process and invite them to present their claims. The liquidator must publish the commencement of the liquidation of the Company in two local daily newspapers, one in Arabic and one in English. The notification serves as an invitation for anyone to object to the liquidation within 45 days from the date of the publication.
8. Distribution of Assets
The liquidator will distribute the assets of the Company in the following order:
a. amounts owed to the Authority
b. the cost of liquidation
c. amount owed to the creditors
d. amount owed to the shareholders on a pro-rata basis.
If a creditor fails to present its claim, the liquidator is required to deposit the sum owed to that particular creditor in court. Companies in RAKEZ should take care in appointing the best company liquidators in the UAE.
9. Completion of Liquidation in RAKEZ
When the process of liquidation in RAKEZ is completed, the liquidator will issue a final liquidation report to the Registrar. The Registrar will, upon the satisfactory completion of the liquidation, cancel the license and remove the company name from the RAKEZ register.
Seek the Help of Top Company Liquidators in the United Arab Emirates
Voluntary Liquidation is the best exit strategy for companies operating in RAKEZ instead of waiting for a liquidation ordered by the court. If going ahead becomes tougher, the business owners should appoint the best company liquidators in the UAE such as Jitendra Business Consultants (JBC) for closing down the company without any hassle. In terms of experience and qualified professionals, Jitendra Business Consultants (JBC) remains to be the leader in undertaking company liquidation in the UAE. JBC’s dedicated company liquidation services in the UAE are key to ensure that your company is shut down in the best interests of the creditors, employees and authorities.