LLC firms must comply with UAE's new Companies Law

Companies have time up to June 30, 2016 to make themselves compliant, failing which companies will be deemed to have been automatically dissolved (unless there is extension of due date).



By Atik Munshi

Published: Mon 22 Feb 2016, 11:00 PM

Last updated: Tue 23 Feb 2016, 8:16 AM

Q: I would like to open a restaurant in Dubai. Please let me know if I need a local partner to do so. What is the procedure and formalities for opening a restaurant in Dubai? MS, Dubai
A: As per the information available to me, the restaurant licence can be obtained as a service licence as well as a limited liability company licence. In the service licence the foreign national/company can be a 100 per cent owner and the UAE national can act as a service agent; in case of LLC the foreign shareholder can hold a maximum of 49 per cent shares and the balance 51 per cent will be held by the UAE national/company. In order to secure a restaurant licence from the Dubai Economic Development Department (DED) you would also need approval from Dubai Municipality and Civil Defence Authority. The restaurant should have sufficient space to accommodate the kitchen equipment in line with safety rules. You would need to approve the design and layout of the restaurant from the concerned authorities. Municipal and Civil Defence will do inspections and suggest improvements if required before they grant approval. The location and use of the building where you intend to open the restaurant will also play a role and building owner's no objection to use the premise for restaurant will be required. It is suggested that you have an initial approval from the authority on the location before you proceed to secure the premises. The design and materials used for the restaurant have to be compliant with the stipulations of the authorities. Required amount of electrical power should be available to get the approvals.
Q: In light of the new Commercial Company Law what documents needs to be prepared and done to make our LLC compliant. CG, Dubai
A: All limited liability companies in the UAE would have to comply with the new Commercial Companies Law of 2015 which is already in force. Practically speaking, you would need to draft an amendment to your Memorandum Articles so ensure that the contravening clauses are removed and the desired clauses for being in compliance are included to your Memorandum Articles. There are various clauses which might need revision or deletion based on your current Memorandum. As each Memorandum is different it is difficult to predict which clauses would need change. It is suggested that you seek professional advice on the same. Companies have time up to June 30, 2016 to make themselves compliant, failing which companies will be deemed to have been automatically dissolved (unless there is extension of due date). My recommendation is to act fast and do the needful.
Q: We have a BVI offshore company. We intend to use this company to make a LLC in Dubai for a trading activity. Please guide on whether such is possible and what needs to be done. UNM, Dubai
A: An offshore company can become a shareholder in the LLC in Dubai. You need to ensure that your BVI Company has been renewed. In order to become the shareholder in the LLC a resolution has to be passed by this BVI Company stating that the company intends to be a 49 per cent shareholder in the Dubai limited liability company and guarantee financial commitment. Such resolution should include name and powers for the person/s who shall sign on behalf of the BVI Company for signing of forms, applications, LLC Memorandum Articles, etc.
In addition to this resolution you would need the Memorandum Articles, the incorporation certificate and the current good standing certificate. These 4 documents have to apostilled and further attested from the country of origin (BVI) plus UK Foreign Office in London, UAE Embassy/Consulate in UK and Ministry of Foreign Affairs in the UAE. At times UAE Ministry of Justice attestation is also required. As the local Dubai notary would recognise documents in Arabic only, the said documents have to be legally translated in Arabic.
The writer is partner at Crowe Horwath, UAE. You can send your business queries to him at atik.munshi@crowehorwath.ae. Views expressed are his own and do not reflect the newspaper's policy.


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