UAE firms get extension for compliance with federal law.
The UAE government has granted a one-year extension to companies for amending their Memorandum of Association and Articles of Association in compliance with the provisions of the Federal Law on commercial companies.
The cabinet recently approved the proposal by Sultan bin Saeed Al Mansouri, Minister of Economy, in this regard.
Companies established before the issuance of the new law under Article No. 374 were originally given time from July 1, 2015 till the end of this month.
According to article 357, in case of late adjustment, companies will be fined Dh2,000 ($544) per day calculated from the day following the expiry date of the applicable period for such purpose.
The second clause of article 374 states that a company will fall under the provisions of the law should it fail to make adjustments within the given period.
The cabinet agreed with Al Mansouri's suggestion to allow the companies concerned to adjust their positions according to the provisions of the law within no later than one year.
The minister had proposed the extension after receiving requests from the Securities and Commodities Authority, the Departments of Economic Development across all the emirates, and a number of existing companies in the UAE.
They voiced the need for the UAE's private sector companies - which number 219,735 limited liability, 162 public joint stock, 60 private joint stock, and 500 solidarity companies and limited partnership corporations - to have more time to adjust to the new Commercial Companies Law.
They pointed out the difficulty in holding general assemblies for some companies as well as the considerable time required to complete the statute amendments and obtain government approvals.
As per this decision, the companies have now been given time till June 30, 2017 for the adjustment of positions.
Al Mansouri said that the new deadline is in line with government efforts to facilitate business, enhance the role of the private sector, and to achieve a smooth transition to the new Companies Act.-TradeArabia News Service
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|Publication:||TradeArabia (Manama, Bahrain)|
|Date:||Jun 18, 2016|
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