United Arab Emirates: UAE Extends Grace Period For Company Compliance

Companies in the United Arab Emirates have been granted an extra year to comply with the new Commercial Companies Law – but are being urged to do so as swiftly as possible.

A version of this article originally appeared in Governance & Compliance magazine.

The 30 June 2016 deadline for compliance with the new Commercial Companies Law (CCL) No. 2 of 2015 has been pushed to 30 June 2017.

The extension was granted following requests from the Securities and Commodities Authority, the Departments of Economic Development across all the Emirates and a number of existing UAE companies.

Many limited liability companies in the UAE were simply not prepared for the original deadline, risking a daily penalty of AED 2,000 and dissolution. Lack of awareness and understanding was a major reason for this oversight, with most head offices based outside the UAE. There was also some confusion as to whom the new law applied, with companies based in free zone locations being exempt.

In order to comply with the new law, most companies will need to amend their Memorandum of Association and Articles of Association, and ensure all voting rights and General Assembly procedures are clear and in line with regulations.

What has changed

The new law has introduced a number of key changes. Firstly, the number of company types has been reduced from seven to five, with the removal of joint ventures and partnership limited with shares. The five company types are:

  • general partnership
  • limited partnership
  • limited liability company
  • private joint stock company
  • public joint stock company

The new law encourages companies to list and is particularly appealing for family businesses, as families may now retain a higher percentage (70%) of the shares.

For joint stock companies, there are significant changes to corporate governance and the responsibilities for the board of directors, as well as safeguarding the interests of the shareholders and the company as a whole (e.g. the requirement to rotate auditors every three years).

Meanwhile, a new company registrar (referenced in the law) is being established to oversee trade name applications and avoid duplication across the different Emirates. Other key changes include:

Simpler LLCs

Some amendments have been made to make limited liability companies (LLCs) simpler and more attractive to investors. LLCs (and private joint stock companies) can now be set up by one individual with no change to the foreign ownership rights (although this individual must be from the Gulf Cooperation Countries) and there is no maximum number of managers (previously capped at five). LLCs must apply International Accounting Standards and Practices.

Quorum of the General Assembly

Voting regulations for board meetings and general assembly meetings are also clarified within the new law. The new minimum attendance quorum of the shareholders' assembly is 75% attendance of shareholders holding 50% of the share capital. If the quorum is not met in the first meeting a second meeting (with 14 days' notice) attended by shareholders holding 50% of the share capital is valid. If the quorum is not met in the first two meetings, a third meeting with a notice period of 30 days is valid with no minimum quorum requirement. The Articles of Association must be amended to reflect this change.

Steps to compliance

Reviewing compliance should be a priority for all companies registered in the onshore market in the UAE in order to ensure their entity types, governance structures and board governance meet the new regulations. Most companies will have to make some changes to their Articles of Association (AoA) since all Article numbers pursuant to the old law were moved and changed.

The AoA must also now include the full name, nationality, date of birth and place of residence/domicile of each founder/shareholder. Once the company's AoA have been updated in line with the new requirements and approved by the shareholders, they must then be signed in front of the Notary Public in the UAE (by not only the authorised signatory for the company but also their local Emirati sponsor or agent (nominee shareholder).

Documents must be translated and approved by the notary before they can be signed and stamped. Advance notice and schedule coordination is required in order to complete this essential step.

From 1 July 2017, any company that has not made the required amendments will be deemed dissolved and risk fines of AED 2,000 per day. It is therefore recommended that companies now move as swiftly as possible within the extended grace period to incorporate all of the new regulations within the Memorandum and their governance structures.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.