The new draft Companies Law introduces some reforms but maintains the fundamental framework of the existing law. It allows for sole founder companies and pledging of quotas in limited liability companies. However, it maintains restrictions on foreign ownership at 49% and requires the majority of board seats and chairman of public joint stock companies to be UAE nationals. While some new concepts are introduced, most essential features of the existing law around governance, ownership restrictions, and IPO rules are maintained.

1. 18 Law Update
INTRODUCTION
The new draft Companies Law (“New Law”) as approved by the
Federal National Council introduces some incremental reforms
to the existing Companies Law (“Existing Law”), but mostly
maintains the fundamental framework and features of the old
provisions.
Whilst the New Law introduces some new concepts and
approaches, most of the essential features of the Existing Law
are maintained. Despite media speculation, the New Law applies
the same conservative approach in relation to foreign ownership
restrictions under the Existing Law, so foreign investors are
limited to 49%. Also, the New Law does not allow sell-downs
in IPO deals.
By the same token, the majority of board seats, including the
chairman of the board, of public joint stock companies must be
held by UAE nationals. Founders of public joint stock companies
continue to be restricted by a lockup period of two years under the
New Law, which defeats sell-down exist options in IPOs. Also,
the New Law has not reformed the governance of limited liability
companies through introducing a proper board of directors’
structure, but has maintained the old form of governance by
“managers”. However, the restriction on the number of managers
under the Existing Law (namely five managers) has been lifted
under the New Law.
On the other hand, the New Law introduces some new concepts.
For example, the New Law:
• allows for sole-shareholder companies, either in limited
liability or private joint stock companies;
• addresses employees’ incentive share schemes;
• enables shareholders in pubic joint stock companies to sell
their preemption rights (rights issue);
• facilitates strategic share placements by public joint stock
companies within pre-emptive complications;
• prohibits financial assistance (in line with the international
market practice);
• enables the legal pledge of quotas in limited liability
companies. Some other reforms are discussed below in
details.
This note aims to shed some light on the main differences
between the New Law and the Existing Law, the fresh concepts
enacted under the New Law, and to highlight the practical impact
of these differences.
This note follows the same sequence of the New Law.
THE NEW UAE COMMERCIAL
COMPANIES LAW
A COMPARATIVE VIEW
Corporate Commercial
AHMED IBRAHIM
Head of Equity Capital Markets
a.ibrahim@tamimi.com

2. Law Update 19
DETAILED VIEWS
General Rules:
1. Article 5 – Free Zone Companies – Free zone companies are
exempted from the application of the New Law. However, it
is to be noted that article 5 states that there will be a Cabinet
decree that will set out the conditions which should be
followed in registering free zones companies in case these
companies wish to operate onshore or outside the borders
of the free zone in question.
2. Article 6 – Corporate Governance – The New Law provides
that private joint stock companies will be subject to
corporate governance rules provided that such companies
are composed of more than 75 shareholders. A ministerial
decree setting out the applicable corporate governance
rules will be issued in due course. The expected corporate
governance rules will include financial penalties on board
members, managers and auditors of any defaulting
company.
3. Article 8 – The Concept of “sole founder” – The New law
provides for the first time the concept of having a company
with a sole founder. This applies on private joint stock
companies and limited liability companies.
4. Article 10 – Local Ownership – The New Law continues to
follow a conservative approach in respect of local ownership
restrictions, so companies must be owned 51% by the UAE
nationals or 100% by GCC nationals.
5. Article 24 – Exclusion of Liability – The New Law introduces an
explicit clause stipulating that any provision in the articles of
the company allowing the company or any of its subsidiaries
to agree to exclude any person from their current or previous
liability towards the company will be void.
However, this article does not address the provisions that
may be agreed upon between the shareholders in separate
shareholders agreement (in particular between nominees
and beneficial owners) whereby one of the shareholders is
excluded from liability. Unexpectedly, this clause prohibits
the exclusion of liability in general without limiting the
exclusion to liability arising out of gross negligence or willful
misconduct, as provided under the Civil Code.
6. Article 26 – Companies Accounting Books – New obligations
are imposed on companies to retain their accounting books
for a period of not less than five years from the end of each
financial year. This is a new requirement under the New
Law that is not provided for under the Existing Law. This
provision comes in line with similar requirements in other
Middle Eastern jurisdictions. Also, companies may retain
electronic versions of their documents provided that these
documents will be saved in compliance with a decree to be
issued by the Minister.
7. Article 28 – Financial Year – Each financial year may not
exceed 18 months and should not be less than six months.
This clause will have an impact on calculating the lockup
period in public and private joint stock companies, as it will
shorten the two/one financial year(s) required with respect
to the founders of public/private joint stock companies.
Likewise, it will affect the timeline required to convert a
limited liability company to a public joint stock company as
provided for under article 275 of the New Law.
8. Article 32 – offering of shares to public – This article explicitly
prohibits any company (either in one of the free zones or
onshore) from making any advertisements or marketing to
invite general public to subscribe in shares without obtaining
the prior approval of SCA. Under the Existing Law, there is
no explicit provision prohibiting such practices, but rather it
is a matter of practice and unwritten rules followed by SCA.
9. Article 36 – Retention of Documents - Similar to article 26
referred to above, article 36 provides that the Minister will
issue a decree setting out the time limit for companies to
retain corporate documents.
RULES GOVERNING LIMITED LIABILITY COMPANIES
10. Article 71 – Sole ownership –Article 8 provides that a
limited liability company may be established by one natural
or corporate person. This approach follows free zone
regulations which allow the incorporation of a free zone
establishment (FZE), which originally is a common law
concept. Under the Existing Law, limited liability companies
may only be established by a minimum of two founders and
a maximum of fifty. The maximum limit of fifty partners still
applies under the New Law.
11. Article 79 – Pledge of Quotas1
(shares) - The New Law
provides that limited liability quotas (or shareholdings) may
be pledged. The Existing Law is silent in respect of pledge
of quotas, and so it is questionable whether quotas can be
pledged legally.
This new development will assist raising of debt finance by
owners of limited liability companies and will enhance the
security package that can be offered to the financiers.
Pledge of quotas will add another level of comfort to
beneficial owners of quotas (foreign investors) in respect
of their shareholding relationship local registered owners
(nominee).
12. Article 80 – Preemption Rights – preemption rights are still
mandatory by operation to law under the New Law, as is the
case under the Existing Law.
13. Article 83 – Company’s Managers – Under the New Law,
companies may appoint one or more managers without
setting out a maximum number of managers. Under the
Existing Law, the maximum number of mangers is five.
14. Article 86 – Competition – Under the New Law, manager(s)
of a company may not be allowed to operate any business
in competition with the business of the company in question.
Defaulting manager(s) will be discharged and compensate
the company accordingly. This matter is not addressed
under the Existing Law.
Footnote:
1. Technically, the capital of limited liability companies composes
of “quotas” rather than “shares” in case of public and private joint
stock companies. Even though, “shares” is still the commonly
used term for limited liability companies.
Corporate Commercial

3. 20 Law Update
15. Article 93 – Invitations to General Assemblies– Invitations
to general assemblies need to be sent out 15 days before
the date of the meeting or less than 15 days if all partners
agree. Under the Existing Law, the notice period required is
21 days which may not be abridged.
16. Article 96 – Quorum for General Assemblies – Under the
New Law, general assemblies will not be valid unless
attended by partners owning 75% of the capital of the
company. If the quorum is not satisfied in the first meeting,
the second meeting shall be called for within 14 days from
the first meeting, which shall not be valid unless attended
by partners owning 50% of the capital of the company. If
the quorum is not satisfied in the second meeting, a third
meeting shall be called for after the lapse of 30 days from the
date of the second meeting, which shall be valid regardless
the quorum attended such meeting.
Resolutions of general assemblies shall only be valid if
approved by partners owning at least 50% of the capital of
the company.
Under the Existing Law, general assemblies may only be
valid unless attended by partners owning 50% of the capital
of the company. If the quorum is not satisfied in the first
meeting, a second meeting shall be called for within 21 days
from the first meeting, which shall be valid regardless of
the quorum attended such meeting. Any amendment to the
articles of the company requires the approval of partners
owning at least 75% of the capital of the company.
17. Article 103 – reference to joint stock companies rules –
Article 103 of the New Law refers to the rules governing
joint stock companies with respect to any matter which is
not addressed under the rules of limited liability companies.
Such reference is not provided for under the Existing Law.
RULES GOVERNING PUBLIC JOINT STOCK COMPANIES
(“PJSC”)
18. Article 107 – Number of founders - PJSC may be established
by a minimum of five founders. Under the Existing Law,
PJSC requires a minimum of 10 founders. This article will
facilitate the constitution of PJSC, in particular in the set up
phase before offering the company’s shares to public.
19. Article 112 - Founders’ committee – The New Law provides
that founders committee shall be composed of three
members without setting out a maximum limit. Under the
Existing Law, founders committee should be between three
to five members.
20. Article 117 – Founders’ ownership – The New Law provides
that founders may own a minimum of 30% and a maximum
of 70% of the capital of the company.
Under the Existing Law, founder may own a minimum of
20% and a maximum of 45% of the capital of the company.
This article will have an impact in relation to encouraging
investors to promote an IPO without facing the risk of losing
their control of their business, as they are allowed to own
up to 70% of the company and offer 30% to public. This will
also promote IPOs for companies that have good financial
standing and do not require additional capital inflows which
are high compared to their pre-existing issued capital.
Unfortunately, the New Law does not facilitate or permit
sell-downs by existing shareholders, an avenue already
available in most developed markets. Such a reform would
have greatly encouraged new IPO transactions.
21. Article 123 – Underwriters – For the first time in the UAE the
New Law recognizes the role of underwriters. Under the
Existing Law, underwriting activity is not addressed. There
will be a ministerial decree regulating the underwriting
activities to subscribe for unsubscribed shares and resell
them again in the stock market.
The facilitators of underwriting could enable the IPO market
to flourish and attract leading global financial institutions to
act as underwriters and develop the UAE capital market.
22. Article 124 - Subscription period – Subscription period opens
for a period of a minimum of 10 days and a maximum of 30
days. Under the Existing Law, the subscription period opens
for a period of a minimum of 10 days and a maximum of 90
days.
23. Article 129 – Book Building - The New Law refers explicitly to
a book building mechanism in relation to the pricing of newly
issued IPO shares. The detailed regulations governing and
regulating book building will be issued later.
Pricing is to be determined at the discretion of the issuer
and the banks at a valuation that is acceptable to investors,
the issuer and the selling shareholder(s).
24. Article 131 – Constitutional General Assembly – Under the
Existing Law, constitutional general assembly requires
the attendance of shareholders owning at least 75% of
the capital. However, the New Law provides that the
constitutional general assembly shall be valid if attended
by shareholders representing 50% of the capital of the
company.
This article comes as an attempt to facilitate and expedite
the process for incorporation.
25. Article 143 – The Composition of the Board of Directors –
Board of directors under the New Law should be composed
of a minimum of three members and a maximum of 11. Under
the Existing Law, board of directors should be composed of
a minimum of three members and a maximum of 15.
26. Article 144 – Election of Board Members/Expert board
members – The New Law provides for cumulative voting at
any election of board members. Cumulative voting is not
provided for under the Existing Law, but rather it was under
the applicable Corporate Governance rules. The voting
mechanics will allow each shareholder to distribute voting
powers amongst various board candidates.
This should increase the chances of minority shareholders
achieving board representations.
The Existing Law also allows the general assembly to
appoint “expert” board members who are not shareholders
provided that the total number of “expert” board members
may not exceed one third of the total number of the board
of directors.
27. Article 151 – Nationality of Board Members – The requirement
under the Existing Law that the majority of board members
Corporate Commercial

4. and the chairman should be UAE local nationals continues
to apply under the New Law.
28. Article 156 – Board Meetings - Under the New Law, the
board of directors shall meet at least four times a year. Such
requirement is not provided under the Existing Law. This is
something that has been dealt with separately under the
Corporate Governance rules.
29. Article 170 – Voidance of resolutions - Any resolution not in
compliance with the provisions of the New Law, or adopted
without consideration to the company’s interests in favor of
a particular group of shareholders, causing damage to them
or providing a private benefit to the members of the board of
directors or to third parties may be revoked.
Proceedings for annulment are time barred on the expiry of
60 days from the date of adopting the resolution contested.
Under the Existing Law, the applicable prescription period
is one year.
30. Article 172 - Invitations General Assemblies– General
assembly invitations need to be sent out 15 days before
the date of the meeting or less than 15 days if 95% of the
shareholders agree. Under the Existing Law, the notice
period required is 21 days and cannot be abridged.
31. Article 193 – Issued and Authorized capital – The New Law
provides that the issued capital of PJSC shall be not less
than AED 30 million. In addition, the company may decide
to have an authorized capital which may not exceed twice
the value of the issued capital. Under the Existing Law, the
capital of PJSC shall be not less than AED 10 million (in
practice AED 20 million), and the concept of “authorized”
capital is not addressed.
A new set of rules will be issued to allow companies to
increase its issued capital within its authorized capital.
By way of explanation, the authorized capital is not more
than a notional concept which has no financial implications
or effect. In other jurisdictions, it only allows the board of
directors of joint stock companies to increase the issued
capital within the limits of the authorized capital by a board
resolution instead of having an extraordinary general
assembly resolution. So the difference between authorised
capital and issued capital is analogous to the difference
between an approved loan facility and a partially drawn
approved loan facility.
For example, if the authorized capital of a company is AED
100 million and its issued capital is AED 30 million. The
board members of such company can increase the issued
capital with any amounts until they reach the ceiling of AED
100 million with a board resolution only instead of holding
an extraordinary general assembly. Any increase of capital
in excess of the 100 million (authorized capital) should be
pursuant to a resolution from the extraordinary general
assembly of the company. Therefore, the authorized capital
is merely to facilitate procedural matters associated with
capital increases. In the UAE, there will be a ministerial
decree that will set out the procedures by which the issued
capital can be increased within the authorized capital.
As for the issued capital, the Companies law allows the
shareholders to pay 25% only of the issued capital of
a company upon its incorporation and the remaining
75% should be completed within 5 years. For example,
if the issued capital of a company is AED 40 million, the
shareholder of this company can pay AED 10 million on the
date of incorporation and the remaining AED 30 thousand
(75%) over five years.
The general assembly has the right to authorize the board
of directors to execute the capital increase resolution,
provided that the board will execute the capital increase
resolution no later than one year from the date of the
general assembly’s resolution. Under the Existing Law, the
board of directors has five years to implement any capital
increase resolution of the general assembly.
32. Article 193 – Board’s Authorization - The general assembly
has the right to authorize the board of directors to execute
the capital increase resolution, provided that the board will
execute the capital increase resolution no later than one
year from the date of the general assembly’s resolution.
Under the Existing Law, the board of directors has a period
of five years to execute the capital increase resolution of the
general assembly.
33. Article 197 - Sale of Entitlements to Rights Issue –
Shareholders have preemption rights to subscribe for their
company’s capital increase (Rights Issue). Under the New
Law, shareholders are allowed to sell their entitlements
under the rights issue to other existing shareholders or to
third parties. Under the Existing Law, this is not possible.
34. Article 207 – Nominal Value of the Share – The New Law
provides that the nominal value of the share is to be paid
within three years from the date of incorporation. Under the
Existing Law, the nominal value of the share is to be paid
within five years from the date of incorporation.
35. Article 215 – Restrictions on the Transfer of Shares – The
founders’ lockup period of two years provided for under the
Existing Law remains the same under the New Law.
36. Article 222 – Financial Assistance – The New Law prohibits
companies from providing financial assistance to assist
one of its shareholders to subscribe or buy its shares or
bonds. The rationale for the prohibition is that the capital of
the company will not be protected if the company assumes
financial risk in a transaction relating to its own shares.
37. Articles 223/224 – Strategic Investor – The New Law allows
companies to increase its capital and allot the newly
issued shares to a Strategic Investor without applying the
preemption rights of the existing shareholders to subscribe
for the capital increase in question, provided that the
Strategic Investor carries out similar or complementary
activities to the company. The definition of Strategic Investor
is set out in 1 above. In addition, the Strategic Investor has
to have issued at least two financial statements.
This is a new development that is not addressed under the
Existing Law.
38. Article 225 – Debt Capitalization – The New Law explicitly
states that a company may convert its debt to equity. This is
not addressed under the Existing Law.
39. Article 226 – Employees Share Scheme – The New Law
explicitly addresses the possibility of issuing employees
incentive share scheme. SCA shall issue a decree
Corporate Commercial

5. 22 Law Update
Corporate Commercial
regulating employees share scheme.
The Existing Law does not address
this issue.
RULES GOVERNING PRIVATE JOINT
STOCK COMPANIES (“PRJSC”)
40. Article 255/256 – Private Joint Stock
Companies – Under the New Law, a
number of not less than two founding
members may incorporate a PrJSC.
The founding members will fully
subscribe to the capital, which must
not be less than 5 million Dirhams.
The Existing Law provides a number
of not less than three founding
members may incorporate a private
joint stock company with a capital not
be less than two million Dirhams.
Under the New Law, PrJSC may also
be incorporated by a sole founder.
41. Article 264 – Lockup Period – Under
the New Law, there is a lockup period
of one financial year from the date
of incorporation. Under the Existing
Law, the lockup period is for two
financial years.
42. Articles 266/269/272 – Introduction of
New Corporate Status – The New Law
sets out a new set of rules that governs
new corporate legal structures
such as, holding companies and
subsidiaries. In addition, it addresses
investment funds for the first time. A
new set of rules and decrees will be
issued to regularize these new legal
structures.
43. Penalties Chapter - A new penalties
chapter has been introduced by the
New Law which is more extensive
than the existing chapter under the
Existing Law.
11. Article 79 – Pledge of Quotas
Not addressed Quotas can be pledged.
12. Article 80 – preemption rights
Preemption rights are applicable. Preemption rights are still applicable.
13. Article 83 – Company’s managers
The maximum number of mangers is 5 mangers. No maximum number of managers.
14. Article 86 – Competition
Not addressed Manager(s) of a company may not be allowed to operate
any business in competition with the business of the
company in question. Defaulting manager(s) will be
discharged and compensate the company.
15. Article 93 - General Assemblies Invitation
The notice period required is 21 days that may not be
shortened.
15 days before the date of the meeting or less than 15
days if all partners agree.
16. Article 96 – General Assembly Quorum
50% of the capital of the company. If the quorum is not
satisfied in the first meeting, a second meeting shall be
called for within 21 days from the first meeting, which
shall be valid regardless of the quorum attended such
meeting. Any amendment to the articles of the
company requires the approval of partners owning at
75% of the capital of the company. If the quorum is not
satisfied in the first meeting, the second meeting shall be
called for within 14 days from the first meeting, which shall
not be valid attended by partners owning 50% of the capital
of the company. If the quorum is not satisfied in the second
meeting, a third meeting shall be called for, which shall be
Existing Law New Law
General Rules:
1. Article 5 – Free Zone Companies
Not addressed
A Cabinet decree that will set out the conditions which
should be followed in registering free zones companies in
case these companies wish to practice their activities
onshore or outside the borders of the free zone in question.
2. Article 6 – Corporate Governance
Not addressed Private joint stock companies will be subject to corporate
governance rules
3. Article 8 – the concept of “sole founder”
Not addressed Sole founder concept be it natural or corporate person.
This applies on private joint stock companies and limited
liability companies.
4. Article 10 – Local Ownership
51:49 Local : Foreign ownership restricted to 49% Foreign ownership restricted to 49%.
5. Article 24 – Exclusion of Liability
Not addressed Exclusion of liability clauses is void.
6. Article 26 – Companies Accounting Books
Not addressed Companies to retain its accounting books for not less than
five years from the end of each financial year.
7. Article 28 – Financial Year
12 months. First financial year can be more than 18
months.
Minimum 6 months and maximum 18 months.
8. Article 32 – offering of shares to public
No explicit provision prohibiting such practices, but
rather it was a matter of practice and unwritten rules of
SCA.
Explicit provision prohibiting such practices.
9. Article 36 – Retention of Documents
Not addressed The Minister will issue a decree setting out the time limit
which companies should follow in respect of retaining
corporate documents.
Rules Governing Limited Liability Companies:
10. Article 71 – Sole ownership
Not addressed Sole founder is allowed.
Wrap Up

6. Law Update 23
Corporate Commercial
Not addressed Manager(s) of a company may not be allowed to operate
any business in competition with the business of the
company in question. Defaulting manager(s) will be
discharged and compensate the company.
15. Article 93 - General Assemblies Invitation
The notice period required is 21 days that may not be
shortened.
15 days before the date of the meeting or less than 15
days if all partners agree.
16. Article 96 – General Assembly Quorum
50% of the capital of the company. If the quorum is not
satisfied in the first meeting, a second meeting shall be
called for within 21 days from the first meeting, which
shall be valid regardless of the quorum attended such
meeting. Any amendment to the articles of the
company requires the approval of partners owning at
least 75% of the capital of the company.
75% of the capital of the company. If the quorum is not
satisfied in the first meeting, the second meeting shall be
called for within 14 days from the first meeting, which shall
not be valid attended by partners owning 50% of the capital
of the company. If the quorum is not satisfied in the second
meeting, a third meeting shall be called for, which shall be
valid regardless the quorum attended such meeting.
Resolutions of general assemblies shall only be valid
unless approved by partners owning at least 50% of the
capital of the company.
17. Article 103 – reference to joint stock companies rules
Not addressed Reference to the rules governing joint stock companies
with respect to any matter which is not addressed under the
rules of limited liability companies.
Rules Governing Public Joint Stock Companies (“PJSC”)
18. Article 107 – Number of founders
A minimum of five founders. A minimum of 10 founders.
19. Article 112 - Founders’ committee
Three to five members. Three members without setting out a maximum limit.
20. Article 117 – Founders’ ownership
A minimum of 20% and a maximum of 45%. A minimum of 30% and a maximum of 70%.
21. Article 123 – Underwriters
Underwriting activity is not addressed. For the first time in the UAE there is statutory recognition of
the concept of underwriting. Regulations still to be enacted.
22. Article 124 - Subscription period
A minimum of 10 days and a maximum of 90 days. A minimum of 10 days and a maximum of 30 days.
23. Article 129 – Book Building
No provision for book building Explicitly refers to book building mechanism as the pricing
method, but detailed regulations still to be revealed.
24. Article 131 – Constitutional General Assembly
Requires the attendance of shareholders owning at
least 75% of the capital.
Valid if attended by shareholders representing 50% of the
capital of the company.
25. Article 143 – The Composition of the Board of Directors
A minimum of three members and a maximum of 15. A minimum of three members and a maximum of 11.
26. Article 144 – Election of Board Members/Expert board members
Normal voting Cumulative voting.
27. Article 151 – Nationality of Board Members
Majority of board members and the chairman should
be UAE local nationals.
Majority of board members and the chairman should be
UAE local nationals.
28. Article 156 – Board Meetings
Not addressed. At least four times a year.
29. Article 170 – Voidance of resolutions
Not addressed. Proceedings for annulment are time barred on the expiry of
60 days from the date of adopting the resolution contested
30. Article 172 - General Assemblies Invitation
21 days that may not be shortened. 15 days before the date of the meeting or less than 15
days if 95% of the shareholders agree.
31. Article 193 – Issued and Authorized capital
The capital of PJSC shall be AED 10 million, and the
concept of “authorized” capital is not addressed.
The issued capital of PJSC shall be AED 30 million.
Authorized capital may not exceed twice the value of the
issued capital.
32. Article 197 - Sale of Rights Issue
Shareholders have preemption rights to subscribe for
their company’s capital increase (Rights Issue).
Shareholders are allowed to sell their rights issue.
33. Article 207 – Nominal Value of the Share
The nominal value of the share is to be paid within five
years from the date of incorporation.
The nominal value of the share is to be completed within
three years from the date of incorporation.
34. Article 215 – Restrictions on the Transfer of Shares

7. 24 Law Update
Corporate Commercial
36. Articles 223/224 – Strategic Investor
Not addressed Allows companies to increase its capital and allot the newly
issued shares to a Strategic Investor (i.e. an investor from
a related industry sector to the company’s own) without
applying the preemption rights of the existing shareholders
to subscribe in the capital increase in question.
37. Article 225 – Debt Capitalization
Not addressed May convert debt to capital.
38. Article 226 – Employees Share Scheme
Not addressed Explicitly addresses the possibility of issuing employees
incentive share scheme.
39. Article 255/256 – Private Joint Stock Companies
Not less than three with a capital not less than two
million Dirhams.
Not less than two with capital not less than five million
Dirhams.
Not addressed PrJSC may be incorporated by a sole founder.
40. Article 264 – Lockup Period
Two financial years. One financial year.
41. Articles 266/269/272 – Introduction of New Corporate Status
Not addressed Holding companies, subsidiaries, investment funds.
A minimum of 10 days and a maximum of 90 days. A minimum of 10 days and a maximum of 30 days.
23. Article 129 – Book Building
No provision for book building Explicitly refers to book building mechanism as the pricing
method, but detailed regulations still to be revealed.
24. Article 131 – Constitutional General Assembly
Requires the attendance of shareholders owning at
least 75% of the capital.
Valid if attended by shareholders representing 50% of the
capital of the company.
25. Article 143 – The Composition of the Board of Directors
A minimum of three members and a maximum of 15. A minimum of three members and a maximum of 11.
26. Article 144 – Election of Board Members/Expert board members
Normal voting Cumulative voting.
27. Article 151 – Nationality of Board Members
Majority of board members and the chairman should
be UAE local nationals.
Majority of board members and the chairman should be
UAE local nationals.
28. Article 156 – Board Meetings
Not addressed. At least four times a year.
29. Article 170 – Voidance of resolutions
Not addressed. Proceedings for annulment are time barred on the expiry of
60 days from the date of adopting the resolution contested
30. Article 172 - General Assemblies Invitation
21 days that may not be shortened. 15 days before the date of the meeting or less than 15
days if 95% of the shareholders agree.
31. Article 193 – Issued and Authorized capital
The capital of PJSC shall be AED 10 million, and the
concept of “authorized” capital is not addressed.
The issued capital of PJSC shall be AED 30 million.
Authorized capital may not exceed twice the value of the
issued capital.
32. Article 197 - Sale of Rights Issue
Shareholders have preemption rights to subscribe for
their company’s capital increase (Rights Issue).
Shareholders are allowed to sell their rights issue.
33. Article 207 – Nominal Value of the Share
The nominal value of the share is to be paid within five
years from the date of incorporation.
The nominal value of the share is to be completed within
three years from the date of incorporation.
34. Article 215 – Restrictions on the Transfer of Shares
Lockup period of two years provided for. Lockup period of two years provided for.
35. Article 222 – Financial Assistance
Not addressed Financial assistance is not allowed.