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Changes in the United Arab Emirates’ company law
Federal Decree No. 32 of 2021 has introduced changes to the law regulating limited liability companies in the United Arab Emirates (except free zones) with particular focus on Boards of Managers, Supervisory Boards and mandatory minimum allocation of profits to legal reserves. Henceforth, Boards of Managers will not be automatically resigned upon expiry of their term and will remain in charge of the company for a period not exceeding 6 months.
The Decree also establishes that individuals may now act as proxies for shareholders at the general assembly provided that they are not Managers and removes the requirement for a quorum at the second meeting of the general assembly following a first meeting where the quorum was not met. Furthermore, the minimum number of shareholders that a limited liability company must have to fall under the obligation to appoint a Supervisory Board has been increased to 15. Lastly, the mandatory minimum allocation of net profits to the statutory legal reserves has been decreased to 5% of net profits.
