A corporation is a legal entity that exists to conduct business. Additionally, a corporation is a separate legal entity from the people who establish it. Corporate law is the body of rules, regulations, laws, and legal practices that govern the formation and operation of corporations. Additionally, corporate law regulates legal entities, allowing them to exist and conduct business.
Lawyers specialising in corporate law understand the rights and obligations of all of the individuals involved with forming, owning, operating, and managing a corporation.
UAE Federal Law No. 2 of 2015
In July 2015, the UAE established Federal Law No. 2 of 2015 on Commercial Companies, replacing the previous Commercial Companies Law (UAE Federal Law No. 8 of 1984 on Commercial Companies). Under the Federal Law No. 2, commonly referred to as “the new companies’ law”, one person or corporate entity can become the sole shareholder in a limited liability company. The previous law did not permit a company with a single shareholder.
According to the Commercial Register, the aim of the Law is “to contribute to the development of the working environment and capacities of the State and its economic position in regulating companies according to the various international norms related to governance rules and the protection of shareholders and supporting foreign investment and promoting the corporate social responsibility of companies.”
Company Management in the UAE
The most popular business structure in the UAE is the limited liability company. In the UAE, every LLC must be registered with the Commercial Register. Additionally, they must have a minimum share capital, as well as a maximum number of shareholders.
According to Federal Law No. 2, joint-stock companies and limited liability companies can be practiced as holding companies. However, only for the purpose of developing business activities through their subsidiaries. This new change permits large corporations to restructure their presence on the market.
Foreign Companies in Dubai
Under Federal Law No. 2, the UAE retained most of the previous policies concerning foreign investments. However, under the new law, at least 51% of the company must be owned by a UAE national, while the remaining 41% can be held by foreign ownership.
Federal Law No. 2 also aims to strengthen corporate practices and standards in the UAE, to include corporate transparency and accountability. The changes to the law also permit certain types of businesses to operate outside of the Free Zones (i.e.,, onshore) while promoting flexible pro-business policies.
Understanding the Various Aspects of Corporate Law
No two corporate deals or transactions are the same. The differences depend on several factors, to include industry, whether the transaction involves single or multi-market businesses, and the size of the organisation involved.
Clients benefiting from corporate legal services range from privately-held companies, investment banks, and multinational corporations to small and medium scale businesses, regulatory bodies, and government entities.
Corporate legal services include the following:
1- Formation of companies
– Sole proprietorship.
– Civil Company.
– Limited Liability Company (LLC)
– Partnership.
– Private shareholding company
– Public Shareholding Company
2- Corporate sponsorship
3- Due diligence
4- Corporate structuring and restructuring
5- Corporate taxation
6- Corporate dissolution
7- Representative offices
Masoud Law
At Masoud Law, we leverage our industry knowledge and expertise to help individuals and organizations to protect their interests. Our team of lawyers is well versed in various aspects of local and international laws and will work tirelessly to ensure your personal and professional interests are protected. Additionally, our corporate lawyers can help you navigate the intricacies of Federal Law No. 2 of 2015 to ensure your company is meeting all legal requirements.
For more information, contact a member of our legal team.