Federal law passed on commercial companies

The law authorises a natural person to establish and own a single-person limited liability company whose owner shall only be liable for its obligations as per the capital stated in the articles of association under the limited liability company provisions.

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By (Wam)

Published: Thu 2 Apr 2015, 10:52 PM

Last updated: Thu 25 Jun 2015, 11:43 PM

Abu Dhabi — The President, His Highness Shaikh Khalifa bin Zayed Al Nahyan has issued a federal law on commercial companies which are considered a key element in any successful economy.

The Commercial Companies Law No. 02 for the year 2015 contains 378 articles, and the provisions of the law, its rules and regulations, and decisions issued in implementation of this law pertaining to commercial companies formed in the country, as well as special provisions which shall apply to foreign companies mentioned in this law, and the resolutions and regulations issued for the implementation on foreign companies which make the country a centre for its activities, establish a branch or a representative office.

The law authorises a natural person to establish and own a single-person limited liability company whose owner shall only be liable for its obligations as per the capital stated in the articles of association under the limited liability company provisions.

The law also allows the juridical personality to set up a joint private or limited liability company whose owner shall only be liable about its obligations in view of the capital stated in the articles of association under the limited liability company provisions of the law.

The law defines the holding company as a company that sets up companies within the UAE or abroad, owns shares or stakes of other companies that allow it to have an upper hand in management or influence its decisions.

As for evaluation of equity stakes, the law stipulates that founders in the public joint stock company shall subscribe shares not less than 30 per cent and not more than 70 per cent of the capital before the initial public offering on the remaining shares.

On debt-to-equity conversion, the law says the company may, according to a special resolution, increase its capital through converting cash debt into equity after the board of directors presents a study to the general assembly on the urgency of taking this step. 

(Wam)

Published: Thu 2 Apr 2015, 10:52 PM

Last updated: Thu 25 Jun 2015, 11:43 PM

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