Prior to commencing any business in the UAE, there are quite a number of legal formalities to be complied with, and the most important of these is the drafting and obtaining of a Memorandum of Association. A Memorandum of Association is one of the most important documents defining the objectives, powers, and relationships of the shareholders with the company. In this article, we will walk you through obtaining a Memorandum of Association for your company in the UAE.
What is a Memorandum of Association?
The Memorandum of Association gives the details of what the company stands for and also provides the broad structure within which it operates. The objectives, powers, rights, and obligations of the shareholders are outlined in the Memorandum of Association. In the UAE Company Law, the incorporation of the company is bound in the MOA and is the foremost requirement.
Significance of Memorandum of Association
MOA is one of the most critical documents for any UAE-based company. The reasons are as under:
- Compliance with Law: Having MOA is a requirement by law when registering a company within the UAE.
- Objectives of the Company: It defines the objectives of the company and the extent of its operations.
- Shareholders’ Rights: It defines the rights and responsibilities of a company’s shareholders and makes the process transparent and accountable.
- Company Powers: The Memorandum of Association states the powers of the company and thus restrains it from acting outside the specified objectives.
Steps Involved in Obtaining a Memorandum of Association in the UAE
1. Choosing Business Type
The first step of the process when establishing a company in the United Arab Emirates is to determine the kind of company to be set up. Generally, a Limited Liability Company, a Private Joint-Stock Company, and a Public Joint-Stock Company are the types. The requirements of the MOA may vary depending upon the type of company.
2. Drafting of the Memorandum of Association
Once you have decided what kind of company you would like to incorporate, the next step would be to draft the MOA. It shall include:
- The company name and address
- Object of the company
- Authorized share capital and share value
- Name and nationality of the shareholders
- Company’s registered address.
It is always prudent to hire a professional legal consultant or corporate service provider to ensure that your MOA meets the requirements of the UAE Company Law, as it reflects proper business intent.
3. Obtain Permit from Relevant Authorities
The Memorandum of Association cannot be finalized without seeking clearance from the relevant authorities in the UAE. This depends on the emirate where you want to locate your company and the type of activity you wish to perform.
For instance, in case the company is being established within Dubai, the draft of the MOA is forwarded for approvals to the Department of Economic Development. Approvals are obtained from Abu Dhabi Department of Economic Development (ADDED) in case of Abu Dhabi.
4. Notarization and Attestation
The next step is to have the approved draft MOA attested in front of a notary public within the UAE. Thereafter, the notarized document should be attested by the Ministry of Foreign Affairs and International Cooperation, or by the embassy, accordingly, in respect of the nationality of the shareholders.
5. Registration with the Relevant Authority
The last step would be to deposit the notarized and attested MOA along with other required documents with the concerned authority for registering the company. If it is in Dubai, then the concerned authority is DED; however, in Abu Dhabi, it is ADDED.
On meeting the requirements of registration, the license will be issued to the company, and it proceed with its activities in UAE.
Benefits of a Well-Drafted MOA
A clear and comprehensive MOA states several advantages as follows:
- Legal Framework: It gives the legal frame in which the company shall operate.
- Governance Structure: It lays out the ownership structure of the company and the decision-making process.
- Transparency: It brings clarity to the stakeholders on the purpose and limitations of the company.
- Dispute Resolution: In case of any internal conflict, this serves as a guideline for resolution.
With these steps and considerations, you are well set to get your MOA without any hassles and move into successful company formation in the UAE.
Conclusion
A Memorandum of Association is one of the necessary requirements during the incorporation process in the UAE. Legally, it is required as it defines the objectives of a company, its powers, and the rights and responsibilities of the shareholders.
The process is laid out in this guide. If you must, seek professional advice on how to best structure your MOA for compliance with UAE Company Law while at the same time giving you a solid operational framework in-country.
Get Professional Help with Your MOA from Notary Public Dubai
An MOA is a very important document and forms the base of your business’s prosperity in the UAE. For a seamless and error-free process, partner with trusted legal experts at Notary Public Dubai.
We have a team of draftsmen consisting of experienced drafting lawyers who can professionally draft MOAs complying with the UAE regulations and in consonance with all requirements. We will guide you through every step from the first consultation to the last registration, ensuring that your MOA is clear, complete, and serves your best interest.
For more information, contact Notary Public Dubai and take the first step on your entrepreneurial journey in the UAE with confidence.