The UAE has established free zones in every emirate to boost business and facilitate entrepreneurs. Among hundreds of economic free zones spread all over UAE, Ras Al-Khaimah Economic Zone, or RAKEZ, is a free zone in the Ras Al-Khaimah emirate. It has favorable terms and conditions that allow new businesses to setup, and outlines detailed procedures to liquidate a company. Company liquidation in RAKEZ involves certain steps need to be followed which are mentioned in this article.
Modes of Company Liquidation in RAKEZ
A company may undergo liquidation either voluntarily or by the discretion of a Registrar. In case of voluntary liquidation, the company decides amongst its board of directors to wind up the company. A single shareholder cannot decide to liquidate the company and proceed with it. Mutual consent of all shareholders is necessary and the authorities demand signed documents showing consent of major stakeholders to proceed with liquidation.
The other way is in which a Registrar decides to liquidate a company. The reasons for this may be:
- Failure to operate its business within two years of its establishment
- Suspension of company’s activity within six months of establishment
- Failure to comply with laws and regulations of UAE
- Failure to renew its business license
- The Registrar terminates the company’s license
- The court orders liquidation of the company
Appointment and Duties of a Liquidator
The first step to company liquidation in RAKEZ, UAE is the appointment of a liquidator who is given the authority to process with the entire process. Once a liquidator is appointed, the company notifies it to the Registrar. The Registrar enters the date of appointment of liquidator in his records.
After appointing the liquidator, it is up to the liquidator to perform some actions that complete the company liquidation in RAKEZ. The duties include:
- Open a bank account of the liquidating company for depositing any assets and clearing debts
- Compile a comprehensive list of assets and liabilities of the company. This list is compiled with cooperation of the Directors of the liquidating company.
- Collect the amount others owe to the company and immediately deposit them to the account created.
- Clear the company’s debts
- Sell the company’s assets to clear off debts.
- Present the company before the court
- Distribute remaining assets among all shareholders or owner of the company
The law of UAE highlights that a liquidator completing the company liquidation in RAKEZ cannot undertake any new business for the company. He must first complete the liquidation process before involving in any other business activity.
Division of Assets
Before completing the liquidation the liquidator publishes the news in two local newspapers: one in English and the other in Arabic. This notifies the public about the liquidation of the company and allows time for any creditors to present their claims. This also allows anyone to raise objection to the liquidation process. The time slot for all these claims or objections is 45 days from publishing of news.
The RAKEZ authorities outline ratios and shares dedicated to each party while distributing assets. The division of assets commences in the following order:
- Amounts owed to the authority
- Fee of liquidator and cost of liquidation
- Creditors
- Shareholders
Completion of Company Liquidation in RAKEZ
Once all processes are complete, the liquidator submits a report to the Registrar. The Registrar reviews the report, upon satisfaction, cancels the license of the company, and removes it from the list of registered businesses in RAKEZ.
This completes the liquidation process.
About BS Auditing
Like all other free zones, RAKEZ has its exclusive rules for liquidating a company. The best way to do is by appointing an experienced liquidator who understands the RAKEZ terms of business and rules of liquidation.
BS Auditing of Accounts has a professional team of the best liquidators who understand the complexities of the procedure and are fully aware of rules and regulations of all free zones of UAE.
Book your consultation today for a successful liquidation process. For detailed guidance and assistance, feel free to contact us:
• Office # 0641, Tamani Arts Offices, Business Bay, P.O. Box 111390, Dubai, UAE
• +971 4 570 7357
• +971 58 108 5690
