The information contained in this document is marketing material and for informational purposes only. The information contained in this document is presented without any warranty or representation as to its accuracy or completeness and all implied representations or warranties of any kind are hereby disclaimed. Recipients of this document, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this document without seeking appropriate professional advice. The provision of the information contained in this document does not establish any express or implied duty or obligation between Citco and any recipient and neither Citco nor any of its shareholders, members, directors, principals or personnel shall be responsible or liable for results arising from the use or reliance of the information contained in this document including, without limitation, any loss (whether direct, indirect, in contract, tort or otherwise) arising from any decision made or action taken by any party in reliance upon the information contained in this document. © The Citco Group Limited, December 2023.
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.