Part 2- IHC FZLLC Special Regulations
Chapter 5- Amalgamation and winding up
Section 1- Amalgamation
Article 1- Definition
Subject to the consent of the Authority given in its absolute discretion and pursuant to the provisions of these Regulations, two (2) or more FZLLCs which are incorporated in the Free Zone may amalgamate and continue as one FZLLC and, if a License has been granted to one or more of these companies, these Regulations governing such License shall continue in effect for the surviving FZLLC, subject to the Authority’s consent.
Article 2- Conditions of Amalgamation
An application to amalgamate must be submitted to the Authority, and shall be accompanied by an application fee and supported by the documents requested by the Authority for this purpose. These documents shall include:
a- A certified copy of resolutions of Shareholders of each of the amalgamating companies;
b- A declaration signed by the director of each amalgamating company declaring that there are reasonable grounds for believing that:
- The amalgamating company is, and the surviving corporation will be, able to pay its liabilities as they become due;
- The realizable value of the surviving company’s assets will not be less than the aggregate of its liabilities and issued capital of all classes; and
- No creditor will be prejudiced by the amalgamation or adequate notice has been given to all known creditors of such company, and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.
Section 2- Winding up
Article 1- Modes of Winding Up
a- The FZLLC may be wound up by the Authority or voluntarily.
b- The FZLLC will be under dissolution in the event of a voluntary winding up or winding up by the Authority in the Authority’s discretion. The Registrar will include “under liquidation” after the name of the FZLLC in the FZLLC Register. The FZLLC must include “under liquidation” after its name in its correspondences.
Article 2- Voluntary Winding Up
The FZLLC may be wound up voluntarily in the following events:
- When the period, if any, fixed for the duration of the FZLLC by its MOA and AOA expires;
- When an event, as may be provided in the MOA and AOA, occurs where an FZLLC is to be dissolved; or
- When the FZLLC resolves by a Special Resolution, or by a resolution passed by such other majority percentage of Shareholders with voting rights as set in the MOA and AOA, that the FZLLC be wound up voluntarily. A copy of the Special Resolution for winding up voluntarily must, on the date that it is issued, be submitted to the Authority.
Article 3 – Appointment and Duties of the Liquidator
a- After the dissolution of the FZLLC, one or more auditors must be appointed as liquidators by an Ordinary Resolution.
b- The appointment of a liquidator must be immediately notified to the Authority. A copy of the Ordinary Resolution for appointment of a liquidator must be submitted to the Authority on the date that it is issued. The liquidator’s name will be entered in the FZLLC Register.
c- A liquidator will have the authority to conduct the affairs of the FZLLC under liquidation. A liquidator’s duties include:
- To prepare a list of the FZLLC’s assets and liabilities and a balance sheet on which the liquidator will sign along with the Manager or Director(s);
- To maintain a register for the liquidation process;
- To preserve the FZLLC’s assets and entitlements;
- To operate, maintain and close the bank accounts of the FZLLC;
- To pay the FZLLC debts;
- To represent the FZLLC before a court.
d- The powers and duties granted to a liquidator must not, unless the liquidator requires, be performed by the officers of the FZLLC, and the role of the officers must be limited to assisting the liquidator in performance of his powers and duties.
e- Where the FZLLC is in dissolution due to an order of the court, the court may define the method of liquidation and appoint the liquidator.
f- A liquidator cannot undertake new business for the FZLLC, unless necessary for the completion of a previous business.
g- A liquidator may be removed by an Ordinary Resolution, provided the resolution for removal prescribes an appointment of another liquidator. The removal and replacement of a liquidator is subject to the Authority’s approval.
Article 4- Distribution of Assets
a- A liquidator must notify, by registered mail, all the creditors of the FZLLC of the commencement of liquidation and invite the creditors to present their claims.
b- A liquidator must publish the commencement of liquidation of the FZLLC in two (2) local daily newspapers, one Arabic and one in English, to invite objections to the liquidation by giving a period not less than forty five (45) days.
c- The assets of the FZLLC must be distributed by the liquidator in the following order:
- First towards amounts owed to the Authority;
- The remaining towards the cost of liquidation, including liquidator’s fee;
- The remaining to the creditors;
- The remaining to the Shareholders on a pro rata basis.
d- Where a creditor fails to present its claim, the liquidator must deposit the sum owed to that creditor in the court.
Article 5- Completion of Liquidation
a- On completion of liquidation in accordance with these Regulations, the liquidator will issue a final liquidation report to the Authority.
b- The Authority shall, provided that the liquidation has been conducted to the satisfaction of the Authority, in relation to the FZLLC under dissolution:
- Cancel the License;
- Terminate the contracts that the FZLLC has with IHC;
- Remove the FZLLC from the Register, as well as any other register maintained by the Authority;
- Issue certificate of termination.