3. Are other amendments possible under the new CCL?
Although other provisions of the new CCL do not necessarily have
to be implemented, they might be advantageous for a minority
shareholder or useful to ease the exercise of shareholders'
rights and, thus, could be worth to be included in the MoA and
Change of Manager
Under the old law, a unanimous vote of the shareholders was
required for the dismissal of the manager, provided the MoA and AoA
did not stipulate otherwise. According to the new CCL, the manager
may be dismissed by (simple) majority vote unless the MoA and AoA
provides for a higher majority. Therefore, in order to protect the
minority shareholder it may be appropriate to specify a sufficient
majority of votes in the MoA and AoA.
Number of Managers
The maximum number of managers appointed in the MoA and AoA is
no longer limited to five but may be freely chosen.
Holding a General Assembly
The shareholders may agree on a reduction of the previously
applicable twenty-one-day notice period for holding a general
To facilitate communication among the shareholders, the MoA and
AoA could now stipulate that the invitation for a general assembly
may not (only) be sent by registered mail - as set out in the old
CCL - but (also) by other means, such as eMail.
Moreover, the new law introduces the possibility for
shareholders not only to appoint other shareholders as proxies to
attend the general assembly in their stead but also third
Pledge of Shares
Finally, it is possible to lay down rules relating to the pledge
of shares in the LLC's MoA and AoA.
Given that the new CCL is a very young piece of legislation -
whose interpretation and actual implementation remains to be seen -
it may be appropriate to include a catch-all clause in favour of
the legal requirements of the new CCL in the MoA and AoA.
4. What are the consequences of a late implementation of the
Failing to comply with the new regulations until 30.06.2016 will
result in a daily fine of AED 2,000 and the company being
automatically deemed to be dissolved. This could mean that the
company is no longer permitted to conduct business. In addition,
the new CCL imposes fines ranging from AED 10,000 to
AED 100,000 in case of violating its provisions.
In general, it is to be noted that the catalogue of punishable
offences relating to a breach of the CCL has been considerably
Therefore, we explicitly recommend amending any existing MoA and
AoA and any further agreements with regard to shareholders or
managers in such way that they comply with the new CCL.
For the sake of good order, we would like to draw attention to
the fact that the aspects stated in this circular are only a
selection of necessary and possible amendments based on our current
interpretation of the new CCL and that they are not suitable to
replace an individual advice.
Do you have any questions?
Should you have further queries, we are glad to assist you
anytime, whether in a personal meeting, over the phone or by eMail
ANDERS LEGAL CONSULTANCY
Sama Tower, Office 806
Sheikh Zayed Road
PO Box 333 558
Confidentiality of corporate documents and information is one of
the key attractions of incorporating a company in the BVI. A
company search of the BVI Registrar of Corporate Affairs will only
disclose certain information and documents.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).