A lot of planning and hard work is required for the formation of a company. Even after the setting up the company, the management should continuously review and strategize, keeping in mind the present situations faced and technologies currently in the business environment. In case the company does not consider these factors, it may have to face various problems which will ultimately lead to the closing of the company and finally the liquidation of the company.
Company liquidation is a process where a company decides to put a full stop to the business. This decision is usually backed by the fact that the company has either taken too many debts or does not have the present condition to continue dung business. In this process, the company sells off its assets to pay back its liabilities and obligations. If the revenue after selling the assets of the company and paying back the debts is still left, in such a case, the remaining balance is shared between all the shareholders of the company. The company cannot conduct business once it has been liquidated.
Dubai Development Authority (DDA)
Dubai Development Authority (DDA) is an entity of the Dubai government and is a critical player in the future growth of Dubai's economy. Earlier known as the Dubai Creative Cluster Authority or DCCA, The DDA is committed to providing a business-friendly environment which will foster business excellence and will profit all shareholders and stakeholders, real estate developers and all strategic partners that are a part of the economy of Dubai.
There are mainly three points on which the DDA focuses:
- The development of industries and other individual professions
- The planning, development, and control of real estate
- Providing licensing and regulatory services to all industries and strategic projects which fall under the free zones jurisdiction
Apart from these three main focuses, the free zone also strives to provide better services, standards, and guidelines. It also aims to provide state of the art technologies and advanced infrastructure, which will help in the quick and simple transformation of the companies towards excellence.
Company Liquidation in DDA
Usually, different free zones have subtly different procedures for company liquidation, but most of the process is the same. Given below are the steps for company liquidation in DDA:
- The first step is to submit the notice of closure of the company to the DDA Free Zone Authority. This notice should be given to the authority at least one month before liquidation and should contain the primary reason behind the closing of the company. In case the proper timing s are not followed, the company may face specified fees for canceling the lease agreement.
- The board of directors of the company must sit together and draft a resolution for the liquidation of the company. This resolution should be attested in front of the executives of the free zone. In case the owner of the company is a foreign businessman, then the decision needs to be notarized and attested by the embassy of the United Arab Emirates, and the same has to be notarized by the UAE’s Ministry of Foreign Affairs.
- All the companies except Leasehold or Freehold companies must give back all the physical assets received from the side of the free zone such as keys, transponders, etc.
- The company has to publish the news of the liquidation of the company in two different local newspapers. The announcement of the liquidation should be printed in English and Arabic.
- The management of the company must keep ready documents such as the original license issued to the company, the Certificate of formation and Share Certificate, Lease Agreements and the original copies of the license issued by the Department of Economic Development and present these documents when required or asked for.
- The company going through liquidation must obtain clearances from the following departments:
- The Dubai Customs Department
- DDA Finance Department
- DDA Government Services Department
- DDA IT Section
- Approval from the Management of Facilities
It should be kept in mind that you cannot appoint an auditor to help in the liquidation of your company. Only a Dubai Development Authority (DDA) approved auditor is allowed to prepare all the required financial reports of the company.
If you are looking to liquidate your company in the Dubai Development Authority, you should look into the services provided by JAXA Chartered Accountant. JAXA will not only help you in the liquidation process but will also help you to plan your next business venture. JAXA is a DDA approved auditor and will ensure that the company will not face any problem in the future. To know more contact us – we’ll be happy to help you.