A manager or a member of the board of managers of the Limited Liability Company is a pillar of the company and its most important employee. To this effect, Federal Law No. 2 of 2015 on Commercial Companies in the United Arab Emirates regulates clearly, and in detail, the method of the manager's appointment.
A MANAGER MIGHT BE APPOINTED THROUGH SEVERAL DOCUMENTS
The appointment of a manager or board member of managers at a Limited Liability Company shall be finalized by a resolution from the shareholders in the company's Memorandum of Association or a separate contract or the resolution of the General Assembly Meeting under the provisions of the UAE Companies Law. Additionally, more than one manager or Board of Managers can be appointed, and they shall be granted powers that shall be determined under the absolute discretionary authority of the shareholders.
PROCEDURES MIGHT CLASH WITH THE REGULATIONS
The competent authorities relating to the mainland companies, i.e., “Department of Economic Development” and “Notary Public Department,” might refuse to attest to a company's Memorandum of Association if the name of a Company's Manager is absent. However, the law permits the appointment to be under a separate contract or according to a resolution issued by the General Assembly Meeting.
In some Emirates in UAE, the Department of Economic Development also refuses the inclusion of more than one manager's name in the Commercial License of the Company even if several managers have been appointed or a board of managers has been appointed for the company under the Memorandum of Association or the resolution of the General Assembly Meeting. The Department of Economic Development directs that only the name of one manager be included in the Commercial License of the Company.
NO SPECIFIC NUMBERS OF MANAGERS AND ON SPECIFIC POWERS
Remarkably, the UAE Companies Law fails to specify the number of managers, unlike many comparative legislation stipulating an upper limit for the number of managers in a Limited Liability Company. This is a loose pattern established by the UAE Companies Law on the manner of appointment, the number of managers and the freedom to determine the scope of powers.
THE APPROVAL FROM THE MANAGER TO BE APPOINTED IS UNNECESSARY
The competent authorities in the United Arab Emirates condone the request to be provided with the contract for the manager's appointment signed by the manager or at least to provide them with the approval of the manager to be appointed as the company manager.
It is sufficient for the shareholders or their representatives to attend and sign the manager's appointment by the resolution of the General Assembly Meeting, the Memorandum of Association, or its amendment. In their laws and regulations, most countries require the submission of written approval from the manager themself to be appointed as a manager before their name as a manager is added to the company's Memorandum of Association or in its Commercial License.
Originally Published 05 August 2022
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