Dubai, UAE - The updated regulations to the new Federal Law 2 of 2015 concerning Commercial Companies (the new Act) are set to improve corporate governance by strengthening the legal and regulatory landscape of doing business in the region, according to Links Group, one of the UAE's leading providers of commercial facilitation and advisory services.
Corporate entities, specifically onshore limited liability companies, are required to amend their Memorandum of Association and Articles of Association (MoA) to ensure key governing constitutional documents are consistent and compliant with the new Act. Any company that fails to make the requisite amendments by 30 June 2016 will deemed to be dissolved.
Commenting on the new requirements of the Act, Leandri Lambert, in-house legal counsel of Links Group said: "The amendments are set to improve corporate governance in the UAE which will naturally contribute towards enhancing the country's status as an attractive business environment that adheres to global market standards.
"Mandatory changes under the terms of the new law include rules regarding shareholders permissibility to pledge shares, modernising changes made to shareholders general meetings - basis on which the quorum and voting rights at a general meeting is calculated, unlimited general managers, and expert valuation of shares. In addition, the government has stated that there are now five official types of companies that can be set up in the UAE - Limited Liability Company, Partnership Company, Limited Partnership Company, Private Joint Stock Company and Public Joint Stock Company.
"This move towards a robust framework is a positive step for the UAE in creating a sustainable model for private sector growth. In contrast to the old Act 8 of 1984, , the new Act has been implemented to contribute to the development of the working environment by regulating companies according to international norms, protection of minority shareholders, the support of foreign investment and promotion of corporate social responsibility.
"Continuing to ensure the highest level of corporate governance and overall market transparency, will prove key to the UAE's ongoing growth and future prosperity in what remains an unpredictable global economy."
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About Links Group
Established in 2002, Links Group partners, protects & enables foreign companies to enter and exit the UAE and Qatar markets while protecting their status as business owners. It advises corporations and individuals on how best to structure a legal commercial presence in the Middle East that protects their ownership interests and affords clear succession planning.
Links Group is the first company of its kind to be endorsed by the Government of Dubai through a strategic alliance with the Foreign Investment Office (FDI) of the Dubai Economic Department and provides an unrivalled portfolio of corporate services including nominee local partnerships, corporate administration and government liaison support.
The Links Group difference is that foreign companies work with a highly structured board as their local partner as opposed to an unknown individual. This structure provides foreign businesses with a corporate entity to act as their nominee, local partner, shareholder or sponsor, thereby minimising the risks associated with appointing an unknown individual nominee and satisfying corporate governance requirements.
Links Group has an untarnished track record with 300 clients, who represent combined annual revenues of over USD 5bn to their respective economies. Links Group is also recognised as a Dubai SME 100 company, a ranking of the top performing SMEs in the emirate, and an Arabian 500 company.
www.linksgroup.com
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© Press Release 2016
