How to Wind up a Company in ADGM Free Zone?

Abu Dhabi Global Market (ADGM) free zone allows companies to wind up their operations legally through the process of voluntary liquidation. Companies may opt for voluntary liquidation in ADGM for a diverse range of reasons including debt, adverse market conditions, achieving business objectives, recession, low demand for products or services etc.

The reasons for company liquidation in the UAE also include the death of the founder without naming a successor, the company losing its financial viability etc. Liquidation is considered one of the best exit strategies for businesses and you need to plan it at the time of incorporation to avoid last-minute surprises.

Hiring ADGM-registered liquidators will help you avoid the last-minute hassle.  Mr Jitendra Gianchandani and Ms Divya Gianchandani, both founders of Jitendra Chartered Accountants (JCA), are officially registered with ADGM as a company liquidators.

We can help you wind up a company in ADGM as per the free zone authority’s rules and regulations. Read the following blog to understand how to wind up a company in ADGM:

Make a Declaration of Solvency

The directors of the company are required to make a declaration of insolvency to close down a company in ADGM voluntarily. It should be sent to the ADGM authority after being signed by the directors.

Pass a Resolution to Wind up the Company

The board members must pass a board resolution at the general meeting to wind up the company in ADGM.

Appoint a Company Liquidator

This is the most important step in the process of ADGM company liquidation wherein the directors or board members appoint an official liquidator. Directors need to appoint an ADGM-approved liquidator for winding up the company.

The liquidator Sends a Letter of Acceptance

The liquidator must send a letter to the ADGM authority expressing the willingness to act as the liquidator on behalf of the company.

Cancel the Visa and Establishment Card

Before shutting down a company in ADGM, the directors or shareholders must ensure that all the employee visas are cancelled along with the company’s establishment card and e-channels account.

Terminate the Lease

The lease agreement for the company’s registered office address must be cancelled and the office keys must be returned to the Registration Authority.

Return the Original Documents

Original documents such as trade license, Memorandum of Association (MoA), Certificate of Registration, Share Certificates, etc. must be returned to the ADGM authority.

Close the Bank Account

If the company has an active bank account under its name, it must be cancelled. Directors or shareholders must also secure a closure letter from the bank.

Clearance from Authorities

Clearance letters must be obtained from authorities including Abu Dhabi Customs, Abu Dhabi Distribution Co (ADDC), and Etisalat/Du.

Newspaper Advertisement

The Company must publish an advertisement in an English-language newspaper with wide circulation. There will be a notice period of 21 days after the advertisement, during which the creditors or any interested parties can raise any claim.

VAT Deregistration

If the company has an active VAT registration in the UAE, it must apply for VAT deregistration within 20 days of cessation. The Federal Tax Authority (FTA) will impose a fine of AED 10,000 if the company fails to meet this obligation.

Economic Substance Regulation

If your company has carried out any of the nine relevant activities, you must meet ESR obligations such as ESR Notification filing, ESR Report submission and 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. Compliance failure will lead to hefty penalties and other severe consequences such as the exchange of information with a foreign competent authority.

Maintenance of UBO Registers

Companies undergoing voluntary liquidation in ADGM must meet their obligations as per Cabinet Decision No. (58) of 2020 on Ultimate Beneficial Ownership (UBO). As per the UBO Law in the UAE, a company under liquidation is required 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. Your UBO obligations in the UAE do not end there. The company administrator or liquidator must maintain the RBR and PSR for at least five years from the date of liquidation.

Submission of Liquidation Report

The process of voluntary liquidation in ADGM will come to a close when the liquidator presents the final Liquidation Report to the free zone authority. After receiving the report, the ADGM registrar will strike off the company’s name from the register and its trade license will be cancelled.

Hire the Best Company Liquidators in the UAE

The process of voluntary company liquidation in ADGM involves complex steps and requirements. However, hiring the best ADGM-listed liquidators can make the process simple. When it comes to company liquidation services in the UAE, look no further than Jitendra Chartered Accountants (JCA).

We are listed with ADGM and can execute the liquidation process seamlessly and in compliance with the existing regulations. We have liquidated both mainland and free zone companies across the UAE. JCA’s experience and learning curve will allow you to complete the process fairly quickly. regulations. JBC’s experience and the learning curve will allow you to complete the process fairly quickly.