UPCOMING DEADLINE: 30 June, 2017- Companies and their Memoranda
If you do not amend your company’s documents by the end of 30 June, 2017, your local Limited Liability Company could be dissolved or substantial fines could be imposed.
If you own or partly own shares in a LLC, then it is important that you have your Memorandum of Association (MoA) reviewed to make sure that the MoA complies with Federal Law No.2 of 2015 (the “2015 Law”).
The 2015 Law required local limited liability companies (LLC’s) to amend their MoA’s no later than 30 June, 2016. However, this has now been extended to 30 June, 2017.
Therefore, not much time remains for LLC’s to adopt the new standard.
In particular, the changes required are:
1. all references to the previous company laws must be changed to refer to the 2015 Law;
2. shareholders’ details must now appear in the MoA with the required information;
3. there must be a pre-emption option in regard to the shares before shares are sold to a third party- this means that shares must first be offered to the existing shareholders and, if they do not wish to purchase the shares, only then can third parties be approached;
4. in the annual general meeting, an auditor must be appointed;
5. if a new shareholder buys into a company, all relevant information regarding the new shareholder must be disclosed to the other shareholders before the transfer;
6. all accounting records and decisions must be in accordance with the International Accounting Standard;
7. the decision- making process has been amended; and
8. there are provisions regarding the decision-making process as well as quorums which need to be updated.
We strongly recommend that you contact us to review your company documents to ensure that no enforcement action is taken against your company.
For further information, please contact our Head of Corporate & Commercial Law, Mr. Hasnain Khalid on email@example.com or +971 4 448 4284.