Provisions Of New Companies Law Enhance Economic Competiveness
Sultan Al Mansouri, Minister of Economy, said the new companies’ law issued by the cabinet contributes to enhance the competitiveness of the national economy at all local, regional and international levels as well as enhance the performance of the business environment and investment climate in the UAE.
The Minister pointed to the importance of being a new law that keep pace with local and global economic developments and supports the economic openness and diversification policies. He also praised the remarkable cooperation of all federal agencies, local and private sector that have had a major role in expressing opinions and observations that enhanced it content and effectiveness to comply with different needs and economic requirements of the UAE.
The new law provisions of the law are stated as follow: Develop a general framework for corporate governance that contributes to protecting the rights of shareholders and to achieve transparency and disclosure of financial data and the efficiency and integrity of the Board of Directors.
Entrusted to the Registrar of Companies at the Ministry of Economy to the task of supervising the record of brand names for different types of companies that are registered in any emirate, in order to avoid repetition among them.
Did not identify minimum capital for the companies with limited liability.
Allow the Cabinet to issue a resolution specifying the forms of businesses, activities or groups that may increase the share of foreign partner for 49% of the capital of the company and so may not reduce the ratio after the issuance of that resolution.
Authorized the shares for public subscription on the basis of the price of the security by one of the companies specialized in this field.
Unify standards and accounting principles, which the company must comply with when preparing interim and annual accounts and when determining the distributable profits.
Authorized exception to the priority right to subscribe into new shares to shareholders in the following cases:
A. Allocating a proportion of the company’s shares to its employees.
B. Entering a strategic partner in the company.
C. Capitalization of the debt.
Allows the co-founders of the public share holding company to the subscription in shares of not less than (30%) and not more than (70%) of the capital of the company. The new law also reduced the length of time spent in founding companies.
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