Sharjah Publishing City free zone is known for providing progressive and flexible regulations for all types of business requirements including company liquidation. Voluntary company liquidation in Sharjah Publishing City is the best exit strategy for entities operating within the free zone. Most businesses start to think of company liquidation in the UAE only when the going ahead becomes tougher.
However, it’s a bad approach and company liquidators in the UAE advise you to develop an exit strategy even before you incorporate the business. The UAE company liquidation process requires a careful approach and robust strategy as a lot of complex factors come into play. These factors include VAT deregistration, Economic Substance Regulations (ESR) and Ultimate Beneficial Ownership (UBO) compliance. Against this backdrop, we have developed a guide to assist you in winding up a company in Sharjah Publishing City free zone.
Read ahead to understand everything you must know about winding up a company in Sharjah Publishing City free zone:
Board Resolution
Voluntary liquidation of a company in Sharjah Publishing City starts with a board resolution passed by the shareholders or directors. The resolution must state the reason for winding up the company and must be signed by all of the shareholders. The board resolution must also state the appointment of a liquidator who will oversee the company’s liquidation in Sharjah Publishing City. The resolution must be attested by the Notary Public before sending it to the free zone authority.
Acceptance Letter from Liquidator
The liquidator should send a letter to the free zone authority confirming his willingness to accept the position. A company liquidator should be an audit firm holding a valid license to operate in the UAE. The powers of the directors or shareholders will cease once the liquidator takes charge. All the powers will be transferred to the liquidators in the UAE once they take over.
Cancellation of Visas
As per the rules of company liquidation in the UAE, the management must ensure that all the visas of the company (including that of the employees) are cancelled. Clearance must be obtained from the immigration department and labour department apart from cancelling the establishment card of the company.
Obtain Clearance Certificates
As part of the winding-up process in Sharjah Publishing City, companies must obtain clearances from many authorities and government departments. Clearance must be obtained from the free zone’s leasing department after returning the keys to the facilities. Also, original documents issued at the time of incorporation must be returned to the free zone authority. Clearance must also be obtained from Sharjah Customs, SEWA and Etisalat / Du.
Newspaper Advertisement
A newspaper advertisement should be published to notify the company’s liquidation to the public. The advertisement should appear in both English and Arabic newspapers. The creditors or any other parties can raise a claim or objection during a 45-day lock-in period that follows the advertisement.
VAT Deregistration
If a company is a VAT registrant, it must apply for VAT deregistration before proceeding with the process of liquidation in Sharjah Publishing City. As per the UAE VAT Law, companies must apply for deregistration within 20 days of becoming eligible for it. Flouting this mandatory requirement will lead to a penalty of AED 10,000. Most companies often ignore this key requirement and incur the loss of money in the form of penalties, which complicates the winding-up process.
Economic Substance Regulations Compliance
Companies that fall within the scope of ESR must ensure that they have met all the relevant requirements during the liquidation process. Companies that carried out any of the nine relevant activities must meet the mandatory ESR requirements such as filing ESR Notification, submitting ESR Report and meeting Economic Substance Test. 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. Non-compliance will lead to hefty penalties and other consequences such as the exchange of information with foreign competent authorities.
Maintenance of UBO Registers
Companies undergoing Liquidation in Sharjah Publishing City 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 Sharjah Publishing City 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 Sharjah, UAE
Even though the steps associated with company liquidation remains similar throughout the UAE, companies must adopt special exit strategies depending on the requirements of the licensing authority. Hiring experienced company liquidators in Sharjah 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.