An Essential Checklist to Liquidate a Company in SHAMS

An Essential Checklist to Liquidate a Company in SHAMS

Sharjah Media City (SHAMS) Free Zone provides one of the most cost-effective licenses to start a business in the UAE. However, not all businesses may have the same longevity, in the journey ahead, some of the companies may decide to cease their operation due to a wide range of factors such as lack of adequate capital, business loss, debt or achieving the business goal. Such companies can legally shut shop by undertaking the process of company liquidation in SHAMS.

However, the companies need to circumvent a series of highly streamlined steps including the appointment of a company liquidator, cancelling of visas, the closing of VAT registration etc. The most effective route to navigate these steps is hiring the best company liquidators in Sharjah. Experienced liquidators can simplify the process of company liquidation in the UAE by helping you obtain faster clearance from SHAMS free zone authority. The following is a list of things essential to liquidate a company in SHAMS. Keep reading.

1. Passing a Board Resolution

The liquidation of a company starts when the shareholders convene a board meeting. The board passes a resolution to dissolve the company in SHAMS. The resolution to dissolve the company must be notarized by the Notary Public.

2. Appointment of an Official Liquidator 

The resolution to dissolve the company should also mention the appointment of the liquidator. A liquidator can be an audit firm licensed in the UAE. The liquidator will be in charge of executing the entire process of company liquidation in SHAMS.

3. Notifying the SHAMS Free Zone Authority 

The resolution that states the company liquidation and appointment of the liquidator must be submitted to the free zone authority. The free zone Registrar will enter the name of the liquidator in the SHAMS companies registrar. The resolution should be signed by the company’s directors and managers. Consult with companies that provide the best liquidation services in the UAE to expedite the process.

4. VAT De-registration 

If a company is already registered for VAT, it must apply for VAT de-registration before proceeding with the process of company liquidation in the UAE. Companies are required to apply to close their VAT accounts within 20 business days of becoming eligible for registration. Failing to do so will attract a penalty of AED 10,000. The de-registration process may consume much time and companies under liquidation should apply as early as possible.

5. Maintaining Real Beneficiary Register 

Since 2020, the requirements as per the Ultimate Beneficial Ownership (UBO) regulation applies to companies undergoing liquidation in the UAE. As per Cabinet Resolution No. (58) of 2020 on Ultimate Beneficial Ownership, a company under liquidation should 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. Also, the company administrators or the official liquidator must maintain the Registers for at least five years from the date of liquidation.

6. ESR Notification, Report Filing Before Liquidation

The process of company liquidation in SHAMS won’t be complete if the companies ignore their obligations under Economic Substance Regulation (ESR). A company that has carried out any of the nine Relevant Activities during the liquidation, must meet 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.

7. Clearances from Immigration, Labour and Others

Companies operating under SHAMS 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 Sharjah Electricity and water authority (SEWA) and Etisalat to ensure that the company doesn’t have any outstanding dues.

8. Lock-In Period after Clearances 

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.

9. Completion of Liquidation in SHAMS 

Upon completion of liquidation in SHAM, the liquidator will issue a final liquidation report to the Registrar. The Registrar will then cancel the trade license and remove the company name from the SHAMS register.

Seek the Help of Company Liquidators in the United Arab Emirates

Voluntary Liquidation is the best exit strategy for companies operating in SHAMS. Companies that find going ahead tougher should go for liquidation by appointing the best company liquidators in the UAE such as Jitendra Business Consultants (JBC). In terms of experience and qualified professionals, JBC remains to be the leader in providing company liquidation services in the UAE. JBC’s qualified company liquidators in the UAE are key to ensure that your company is shut down without any hassle.