Federal Decree Law No. (32) of 2021 on Commercial Companies (economy and business law)

Article (1)  
Definitions  
For the purpose of applying the provisions of this Decree Law, the following words and 
expressions shall denote the meanings assigned thereto respectively, unless the context 
requires otherwise:  
The State  : The Unites Arab Emirates.  
Federal Government  : The Government of the United Arab Emirates.  
The State  : The Unites Arab Emirates.  
Federal Government  : The Government of the United Arab Emirates.  
Local Government   : Any of the governments of the member Emirates of the  
Federation.  
The Ministry  : Ministry of Economy.  
The Minister  : Minister of Economy.  
Central Bank  : The Central Bank of the United Arab Emirates.  
SCA  : The Securities & Commodities Authority.  
Competent Authority  : The local authority concerned with the Company affairs in the 
relevant Emirate.  
Company  : The Commercial Company.  
Special Purpose 
Acquisition Company 
[SPAC] : A public joint stock company, which the SCA has approved to 
classify as a Special Purpose Acquisition Company with no 
other purposes, in accordance with the SCA's relevant decision.  
Special Purpose 
Vehicle [SPV]  : A company incorporated with the aim of segregating the 
liabilities and assets associated with a particular financing 
transaction from the liabilities and assets of its founding 
person, and is used for the transactions involving credit,  
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       borrowing, securitization, bond issuance and transfer of risks 
associated with insurance, reinsurance and derivatives 
transactions in accordance with the provisions of the decision 
of the SCA regulating such activities.  
Governance  : A set of controls, standards and procedures that aim to achieve 
corporate discipline for the management of the Company in 
accordance with the international standards and practices, 
through determining the duties and responsibilities of the 
Directors and the Executive Management of the Company, 
while ensuring that the interests of shareholders and 
stakeholders are safeguarded.  
Business Day  : The official business days of the ministries, government 
authorities and local departments.  
Special Resolution  : A resolution issued by a majority of shareholders holding at 
least 75% of the shares represented at the General Assembly of 
a joint stock company.  
Registrar  : The companies registrar appointed by the Minister, and who 
performs his duties through the Companies Department of the 
Ministry.  
Markets  : Securities and commodities markets licensed by the SCA to 
operate in the State.  
Securities  : The shares issued by joint stock companies;  
Derivatives and investment units approved by the SCA;  
Bonds, Sukuk and bills issued by the Federal Government, local 
governments or public authorities or institutions in the State;  
Bonds, Sukuk and any debt instruments issued by companies in 
accordance with the regulations to be issued by the SCA; and  
Any other local or foreign securities acceptable to the Central 
Bank and the SCA.  
Public Offering  : The process of inviting any natural or legal person or a  
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       particular segment or segments of persons to purchase any 
Securities.  
Book Building  : The process by which the price of a security is determined upon 
issuance or sale on a Public Offering, in accordance with the 
provisions of the resolution to be issued by the SCA in this 
respect.  
Strategic Partner  : A partner whose contribution to the Company provides 
technical, operational or marketing support that is beneficial to 
the Company.  
Share Register  : A register that shows the shares held by shareholders in the 
joint stock companies and the rights associated with such 
shares.  
Share Register Secretariat  : An entity or entities licensed by the SCA  to regulate the Share 
Register of private joint stock companies.  
Director  : 
Any member of the board of directors of the Company, 
including the chairman.

Article (2) 
Objectives of the Decree Law  
This Decree Law aims to contribute to the development of the business environment and 
the capacities of the State and its economic standing by way of regulating the companies in 
accordance with the global variables, especially those related to the regulation of 
governance rules, the protection of the interests of shareholders and partners, boosting foreign investment flow and the promotion of corporate social responsibility.

Article (3)  
Companies Governed by the Provisions of this Decree Law  
The provisions of this Decree Law and the rules, regulations, and resolutions issued in implementation hereof shall apply to the commercial companies established in the State.  
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       The provisions on foreign companies set forth in this Decree Law and its implementing 
resolutions and regulations shall apply to foreign companies that have a headquarters in the 
State to carry on any activity therein or establish a branch or representative office in the 
State.

Article (4) 
Companies Not Governed by the Provisions of this Decree Law  
1. Except for registration and renewal of registration in the register of exempted companies 
kept at the Ministry, the SCA and the Competent Authority, within their respective areas 
of competence, the provisions of this Decree Law shall not apply to the following:  
a. The companies exempted under a Cabinet resolution, in respect of anything for 
which a special pr ovision to that effect is contained in the company's Memorandum 
or Articles of Association, according to the controls to be issued under a Cabinet 
resolution.  
b. The companies fully owned by the federal or local government or any of their affiliated institutions, entities, bodies or subsidiaries, as well as any other companies 
fully owned by such entities or their subsidiaries, if a special provision to that effect is 
contained in their Memorandum or Articles of Association.  
c. The companies, in which the federal government or local government or any of their 
affiliated institutions, authorities, agencies or subsidiaries, or any other entity directly 
or indirectly owned by any of them, is holding at least [25%] of their capital, and 
which engage in the business activities of oil drilling, extraction, refining, 
manufacturing, marketing and transport, or engage in any energy -related activities of 
all types, electricity and gas production, or water desalination, transportation and distribution, if a special provision to that effect is contained in their Memorandum or 
Articles of Association.  
d. The companies that are granted exemption from the provisions of Federal Law No. [2] of 2015 on Commercial Companies, as amended, prior to the date of entry into force of the provisions of this Decree Law, if a special provision to this effect is  
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       contained in the Memorandum or Articles of Association of such companies.  
e. The companies exempted from the provisions of this Decree Law under special 
federal laws.  
f. The SPACs; as provided for in the SCA's decision on such companies.  
g. The SPV; if a special provision to that effect is included in the decision of the SCA on 
the regulation of such activity.  
2. The companies mentioned in [1/B, C and D] of this Article shall adjust their affairs in 
conformity with the provisions of this Decree Law, in the event that such companies sell 
or offer any ratio of their capital at a public offering or list their shares on a financial 
market in the State.  
3. The companies mentioned in [1/F] and [1/G] of this Article shall adjust their affairs in 
conformity with the provisions of this Decree Law and according to the regulations or 
decisions issued by the SCA on such companies.

Article (5)  
Free Zone Companies  
1. The provisions of this Decree Law shall not apply to the companies established in the free 
zones of the State if a special provision to this effect is contained in the laws or 
regulations of the relevant free zone. Notwithstanding the foregoing, such companies 
shall be governed by the provisions of this Decree Law if such laws or regulations allow the activities of such companies to be carried on outside the free zone in the State.  
2. Subject to Clause [1] of this Article, the Cabinet shall issue a resolution setting out the 
applicable conditions for the registration of companies operating in the free zones of the 
State and which desire to carry on their activities in the State but outside the free zones.

Article (6)  
Corporate Governance  
1. Subject to the requirements of the Central Bank with regard to the financial institutions 
falling under its control and supervision, the Minister shall issue the resolution  
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       regulating the governance of companies, except for public joint stock companies, as the 
Board of Directors of the SCA shall issue the resolution regulating their governance. The 
governance resolution shall include the rules, controls and provisions to be observed by 
the companies.  
2. The board of directors of the company or its managers, as the case may be, shall be 
responsible for applying the rules and standards of governance.

Article (7)  
Breach of the Rules of Governance  
The governance -regulating resolutions provided for in Article [6.1] hereof shall include fines 
to be imposed by the Ministry or the SCA, within their respective areas of competence, on 
the companies and their chairpersons, directors, managers and auditors in the event that 
such resolutions are breached, so that the fine shall not exceed AED 10 million.

Article (8) 
The Concept of Company 
1. The Company is a contract whereby two or more persons agree to get involved in an 
economic profit- making venture by contributing a share in the form of capital or work, 
and to divide among themselves the profit or loss resulting from such venture.  
2. The economic venture referred to in Clause [1] of this Article shall include every 
commercial, financial, industrial, agricultural or real estate activity or other kinds of 
economic activity.  
3. Notwithstanding Clause [1] of this Article, the Company may be incorporated or owned 
by a single person in accordance with the provisions of this Decree Law.

Article (9)  
Forms of Companies  
1. The Company shall take one of the following forms:   
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       a. General Partnership.  
b. Limited Partnership.  
c. Limited Liability Company.  
d. Public Joint Stock Company.  
e. Private Joint Stock Company.  
2. Any Company that does not adopt any one of the forms referred to in the preceding 
Clause shall be considered null and void, and the persons concluding contracts in its 
name shall be jointly and severally liable for the obligations arising out of such contracts.  
3. Every Company established in the State shall bear the nationality thereof, but this would 
not necessarily mean that the Company shall enjoy the rights exclusively conferred upon 
UAE nationals.  
 
Chapter Two  
Incorporation and Management of Company

Article (10)  
Activities Having Strategic Impact  
1. A committee, whose membership includes representatives from the competent 
authorities, and which is vested with the competence to propose activities with a strategic impact and the controls required to license the companies that engage in any of 
these activities, shall be formed by a resolution of the Cabinet based upon a proposal 
from the Minister.  
2. The Cabinet shall, based upon a recommendation from the committee stipulated in 
Clause [1] of this Article, issue a resolution defining the activities with a strategic impact 
and the controls for licensing the companies that engage in any of these activities.  
3. Subject to the competencies vested in the Cabinet as per Clause [2] of this Article, the 
Competent Authority shall have the following powers:  
a. Determine a particular ratio for the contribution of UAE nationals to the capital or 
the boards of directors of all companies that are incorporated within the scope of its 
competence.   
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       b. Approve the applications for incorporation of companies and determine the fees as 
per the controls laid down by the Cabinet and mentioned in Clause [2] of this Article, 
subject to the provisions stipulated in this Decree Law with regard to joint -stock 
companies.  
4. The Cabinet may, based upon a request from the Ministry, the body concerned or the 
Competent Authority, as the case may be, relieve any company whose activities are 
regulated by special legislation from any term or provision that stipulates the percentage of ownership of nationals or their involvement in the management of such company.

Article (11)  
Business Practice  
1. The company shall obtain all the approvals and licenses required to engage in the 
business activities in the State prior to the commencement of business practice.  
2. The Cabinet shall issue a resolution determining the formation and credentials of the 
members of the internal Sharia Supervisory Committees and the Sharia controller of 
companies incorporated inside the State and which conduct their business in conformity 
with the rules of Islamic Sharia. The resolution shall determine the controls of operation 
of such committees. Such companies shall, following their incorporation and prior to the 
commencement of their activities, obtain the approval of the internal Sharia Supervisory 
Committees.  
3. Only public joint stock companies may conduct banking and insurance activities, unless 
the laws regulating such activities or the resolutions issued thereunder stipulate otherwise.

Article (12)  
Name of the Company  
1. The Company shall have a trade name that does not conflict with the public order of the 
State. The name shall be followed by the legal form of the Company. No Company may 
be registered with a name previously registered in the State or a confusingly similar  
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       name.  
2. Under a special resolution of the General Assembly and the like, the Company may 
change its name to any other name approved by the Competent Authority and 
acceptable to the Registrar. The change of the name of the Company shall not prejudice its rights or obligations or any legal proceedings instituted by or against the Company. 
Any legal proceedings that have already been instituted by or against the Company shall 
also continue in the amended name of the Company.

Article (13)  
Address and Communications of the Company 
1. Every Company shall have a registered address in the State to which notices and 
communications shall be sent.  
2. All contracts, documents, communications and application forms issued by the Company 
shall bear its name, legal form, registration number and address, and, if the share capital of the Company is added to such details, the amount of the paid up capital shall be 
stated.  
3. If the Company is undergoing liquidation, its paperwork shall indicate such status.

Article (14)  
Drafting the Memorandum of Association  
1. The MOA of the company and each amendment thereto shall be written in Arabic and 
attested by the Competent Authority; otherwise, the MOA or the amendment thereto shall be null and void. If the Memorandum is written in a foreign language in addition to 
Arabic, the Arabic text shall be the prevailing and applicable text in the State. The 
attestation by the Competent Authority shall be made based on personal attendance or 
by electronic signature, as determined by the Competent Authority in this regard. 
Notwithstanding the above, the attestation shall be made before the Notary Public in the events determined by a decision issued by the Competent Authority.  
2. The partners may invoke against each other the invalidity arising from failure to draft the  
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       MOA or an amendment in writing or to attest the same. However, no invalidity may be 
invoked by the partners against third parties.  
3. If a judgment is issued, at the request of a partner, establishing that the Company is 
invalid, such invalidity shall take effect only of the date on which the judgment becomes final.

Article (15) 
Registration of MOA with the Competent Authority  
1. The Company's MOA and any amendment thereto shall become effective after being 
registered in the commercial register with the Competent Authority.  
2. If the MOA is not registered as required by Clause [1] of this Article, it shall have no legal 
effect vis -à-vis third parties. If non- registration is limited to one or more of the items 
required to be registered, only the non -registered items shall have no effect vis -à-vis 
third parties.  
3. The companies shall notify both the Competent Authority and the Registrar in writing 
within fifteen [15] business days upon the occurrence of any amendment or change in the registered details of the Company, including its name, address, share capital, number of shareholders or legal form.  
4. The managers or directors of the Company, as the case may be, shall be held jointly liable 
for indemnifying the damage sustained by the Company or its partners or third parties 
due to failure to have the MOA or any amendments thereto registered in the commercial 
register with the Competent Authority.

Article (16 )  
Invocation of MOA by Third Parties  
1. Any third party may prove the existence of the MOA of the Company or any amendment 
thereto by all means of proof. Such third party may invoke the existence or invalidity of 
the Company vis -à-vis the partners.  
2. If the Company is decided to be invalid upon the request of a third party, the Company  
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       shall be deemed void ab initio in relation to such third party. Persons who have 
contracted with such third party in the name of the Company shall be jointly and 
severally liable for the obligations arising from the MOA.  
3. In all cases where a Company is decided to be invalid, the terms of the MOA shall apply to 
the liquidation of the Company and the settlement of the rights of the shareholders 
against each other. The debtors of the Company may not request or invoke invalidity in 
order to avoid their debts to the Company.

Article (17)  
Nature of Partner's Contribution  
1. The capital of the Company shall consist of cash contribution and/or in- kind 
contributions of a known value.  
2. The partner's capital contribution may neither be work, unless the same is a general 
partner, nor his reputation or influence.

Article (18)  
Rules of Contributing to the Company's Capital  
1. If the partner's contribution is a title to property or any other right in -rem transferred to 
the Company, such partner shall be liable in accordance with the provisions applicable 
to contracts of sale with regard to title transfer, guarantee of the contribution in case of 
depreciation or maturity or in the event of an apparent defect or shortcoming in the 
contribution, unless agreed otherwise.  
2. If the contribution is based merely on the utilization of funds, the provisions applicable to 
lease agreements shall apply to the issues set out in Clause 1 of this Article, unless agreed 
otherwise.  
3. If a partner's contribution represents debts payable by third parties or other incorporeal 
rights, such partner's liability vis -à-vis the company shall only be relieved when such 
debts are settled. Moreover, the partner shall be liable to indemnify the damage 
sustained by the Company if such debts are not settled when they become due.   
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       4. Subject to the provisions of the law regulating copyrights and ancillary rights and the law 
regulation the protection of industrial property rights, if the partner's contribution in the 
Company is his work, then every revenue generated from such work shall be the 
property of the Company, provided that the partner has not obtained such revenue from the right to a patent, unless otherwise agreed.

Article (19)  
Failure to Provide Contribution to the Company  
1. If the partner undertakes to contribute to the company a sum of money, and such sum is 
not paid, or if the contribution consists of debts of third parties that are not settled, such 
partner shall be liable vis -a-vis the Company for any obligations in consideration of his 
contribution to the Company.  
2. The partner shall be liable to the Company for the difference, if any, between the amount 
of money or value of the contribution actually provided to the Company and the amount 
of money or value of such other contribution recorded in the partners register, and 
which the partner should have provided in accordance with the provisions of this Decree 
Law.

Article (20)  
Enforcement upon Anything in Lieu of Capital Contribution  
1. The creditor of any partner may not satisfy his right from the contribution of his debtor to 
the capital of the Company, but rather, he may satisfy the same from his debtor's profit 
share. If the Company is dissolved, the creditor's right shall attach to his debtor's share 
upon liquidation of the Company.  
2. If the partner's contribution to the Company is shares, then his creditor may, in addition to 
the rights as set out in Clause 1 of this Article, file a case with the competent court for the shares to be sold and the proceeds thereof be used to satisfy the creditor's right.  
  
  
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Article (21)  
Legal Personality of the Company  
1. The Company shall, as of the date of registration in the commercial register with the 
Competent Authority, acquire the legal personality in accordance with the provisions of 
this Decree Law and the resolutions issued in implementation hereof.  
2. During the incorporation period, the Company shall have legal personality to the extent 
necessary for its incorporation. The Company shall be bound by the acts of the founders 
in connection with the incorporation procedures and requirements within such period, 
provided that such incorporation is completed in accordance with the provisions of this 
Decree Law.  
3. Upon its dissolution, the Company shall undergo liquidation. During the liquidation 
period, the Company shall maintain its legal personality to the extent required for the 
liquidation process. The phrase "Under Liquidation" shall be added to the name of the 
Company in a clearly written manner.  
4. Subsidiaries of a holding company shall have legal personality and financial liabilities 
independent of the holding company.

Article (22)  
Duties of the Person Authorized to Manage the Company  
The person authorized to manage the Company shall preserve its rights and shall exercise due care and diligence for the benefit of the Company as expected from a Prudent Person. 
Such person shall perform all such acts that are consistent with the objective of the 
Company and the powers granted to such person under an authorization issued by the Company in this respect.

Article (23)  
Liability of Company for Acts of its Authorized Manager 
The Company shall be bound by any act or thing carried out by the person authorized to manage the Company in the ordinary course of such management. The Company shall also  
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       be bound by any act of any of its employees or agents who are authorized to act on behalf of 
the Company, where such authority has been relied on by a third party dealing with the 
Company.

Article (24)  
Relief from Liability  
Subject to the provisions of this Decree Law, any provision of the MOA or AOA of the 
Company authorizing it or any of its subsidiaries to agree on relieving any person from any 
personal liability, which such person assumes as a current or former officer of the Company, 
shall be null and void.

Article (25)  
Protection of Clients of the Company  
1. The Company may not deny its liability vis -à-vis any client on the grounds that the 
authorized manager is not duly appointed in accordance with the provisions of this 
Decree Law or the AOA of the Company, as long as the acts of such manager fall within 
the usual limits in respect of persons of a similar position in companies that conduct the 
same type of activity as the Company.  
2. Any client may only be protected if he is acting in good faith. A person shall not be 
deemed acting in good faith if he actually knows or could have known, based on his 
relationship with the Company, of the shortcomings in the act or thing to be invoked against the Company.

Article (26)  
Accounting Records  
1. Every Company shall keep accounting records of its transactions to give a clear picture of 
its financial position at any specific point in time, and to enable the partners or shareholders to verify that the Company's accounts are being properly kept in accordance with the provisions of this Decree Law.   
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       2. Every Company shall keep its accounting records at its headquarters for a period of at 
least five [5] years of the end of the fiscal year of the Company.  
3. The Company may keep an electronic copy of the original documents  and papers saved 
and maintained by the Company in accordance with the guidelines contained in a 
resolution of the Minister.

Article (27)  
Accounts of the Company  
1. Every joint stock company and limited liability company shall have one or more auditors 
to carry out an annual audit of its accounts. Other companies may appoint an auditor in 
accordance with the provisions of this Decree Law.  
2. The Company shall prepare annual financial accounts, including a balance sheet and a 
profit and loss account.  
3. The Company shall apply international accounting standards and principles upon 
preparing its periodic and annual accounts, to give a clear and accurate picture of the profits and losses of the Company.  
4. Every partner or shareholder in any Company may, based upon a written request, obtain a 
free copy of the last audited accounts and of the last report of its auditor and a copy of 
the accounts of the group if it is a holding company. The Company shall respond to such request within 10 [ten] days of the date of submission.

Article (28)  
Fiscal Year of the Company  
1. Every Company shall have a fiscal year to be specified in its Articles of Association, 
provided that the first fiscal year of the Company shall be between 6 [six] to 18 
[eighteen] months, starting from the date on which the Company is registered in the 
commercial register maintained by the Competent Authority.  
2. All fiscal years subsequent to the first one shall run for 12 months after the end of the 
preceding fiscal year.   
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Article (29) 
Distribution of Profits and Losses  
1. If the Company's MOA does not define a partner's share in the profits or losses, the latter's 
share shall be proportional to his capital contribution. If the MOA only specifies a 
partner's share in profits, his share of losses shall be equal to his profit share and vice 
versa.  
2. If a partner's contribution is limited to his work, the Company's MOA shall specify his 
share of profits or losses. If the partner has provide a cash or in- kind capital contribution 
in addition to his work, he shall have a share of the profits or losses for his work 
contribution and another share for his capital contribution.  
3. If it is agreed under the Company's MOA that any of the partners is to be denied profits or 
be relieved of losses or that any of the partners gets a fixed return for his contribution, 
such MOA shall be null and void.  
4. It may be agreed to relieve a partner, who contributes only his work, from sharing in the  
loss, provided that no remuneration has been decided for such work.

Article (30)  
Distribution of Profits 
1. No fictitious profits may be distributed to the partners or shareholders. The board of 
directors or any similar body shall be liable vis -à-vis the partners or shareholders and the 
Company's creditors for any such arrangement.  
2. If the Company distributes any profits in violation of the provisions of this Decree Law 
and the resolutions issued in implementation hereof, the partner or shareholder concerned shall pay back the profits received by him in violation of such provisions. 
Furthermore, the Company's creditors may request such partner or shareholder to return 
the profits received, even if he is acting in good faith.  
3. Partners or shareholders shall not be denied actual profits picked up by them even if the 
Company incurs losses during the following years.  
   
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Article (31)  
Issuance of Securities 
Subject to the provisions of Article [4] of this Decree Law, only th e joint stock company may 
issue negotiable shares, bonds or Sukuk.

Article (32)  
Public Offering of Securities  
No Company, other than the public joint stock company, may conduct a public offering of 
Securities. Under no circumstances may any Company, entity, natural or legal person 
incorporated or registered in the State or in a free zone or overseas, publish any notices in the State inviting the public to subscribe for Securities without first securing the approval of 
the SCA.  
  
Chapter Three   
Companies Registrar

Article (33)  
Regulation of the Activities of the Registrar  
The Minister shall, in coordination with the Competent Authority, issue regulations on the 
activities of the Registrar.

Article (34)  
Notifying the Registrar of the Company's Details  
The Competent Authority shall notify the Registrar of the details of the companies registered 
with it. Such notification shall include the company's name, business activities, capital, 
business license as well as any information, data or documents required by the Registrar.  
  
 
  
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Article (35)  
Rules for Registration of Trade Names  
The Competent Authorities shall establish the necessary rules for registration of trade 
names, shall ensure that the trade names of companies are not confusingly similar, and shall 
provide the Registrar with any updates or changes in the details of the registered companies.

Article (36)  
Registrar's Duty to Keep Company's Documents 
The Minister shall issue a resolution:  
1. Designating the period of time for which the Registrar shall keep the documents, so that 
such documents may be destroyed after the expiration of such period.  
2. Regulating the submission of documents to the Registrar by electronic means of communication and other means. The resolution shall include provisions to ensure 
effective consistency between the records kept by the Registrar and those kept by the 
Competent Authority.

Article (37)  
Access to Records Kept by the Registrar  
Subject to the provisions of this Decree Law, the stakeholders may request from the 
Registrar:  
1. A copy of the details of the records kept by the Registrar.  
2. A cer tificate from the Registrar or the Competent Authority indicating any of the details 
of those records.

Article (38)  
Fees Payable to the Ministry and the SCA  
Based upon the proposal of the Minister and in coordination with the Ministry of Finance, the Cabinet shall issue a resolution determining the fees payable by companies for the  
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       services provided by the Ministry and the SCA in the course of implementation of the 
provisions of this Decree Law.  
  
Part Two  
Partnerships  
Chapter One  
General Partnership

Article (39)  
Definition of the Company  
A General Partnership is a Company which consists of two or more partners who are natural 
persons and are jointly and severally liable to the extent of all their property for the liabilities 
of the Company.

Article (40)  
Capacity of the Partners  
A general partner shall have the capacity of a trader. Such partner shall be deemed to 
conduct the business in person in the name of the Company. When a General Partnership 
becomes bankrupt, all the partners thereof shall also become bankrupt by operation of law.

Article (41)  
Name of the Company  
1. The name of a General Partnership shall consist of the name[s] of one or more partners in 
addition to the words "and partners" or words of similar meaning, provided that the 
name of the Company ends with the words "General Partnership". In addition, the 
Company may have its own trade name.  
2. If the name of a General Partnership contains the name of a person who is not a partner in 
the Company and that person has knowledge of the same, the person in question shall be jointly liable for the Company's obligations vis -à-vis any person that deals with the  
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       Company in good faith.

Article (42)  
MOA of the General Partnership  
1. The General Partnership's MOA shall, in particular, include the following details:  
a. The full name of each partner and his nationality, date of birth and place of 
residence;  
b. The name, address and trade name, if any, of the Company and the objects for which 
it was established;  
c. The headquarters of the Company and its branches, if any;  
d. The share capital of the Company, the shares of each partner, the estimated value of 
such shares, the means by which they are assessed and their due dates;  
e. The commencement date and expiry date of the Company's term, if any;  
f. The method by which the Company is to be managed and the names of the 
Company's authorized signatories and the extent of their powers;  
g. The start and expiry dates of the fiscal year;  
h. The profit and loss sharing ratios;  
i. The conditions for assignment of shares in the Company, if any.  
2. If the MOA of the Company contains the name[s] of the manager[s], then the full name, 
nationality, place of residence and powers of each manager shall be stated.

Article (43)  
Incorporation Procedures  
The General Partnership shall be incorporated and registered as follows:  
1. The Competent Authority shall determine the information and documents required for 
the incorporation of the Company, and shall create a standard application form for 
incorporation in accordance with the provisions of this Decree Law.  
2. The application for incorporation, together with the supporting documents required for 
licensing and registration purposes, shall be submitted to the Competent Authority.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  23 
       3. The Competent Authority shall require the applicant to complete the information and 
documents required or to make such amendments to the MOA of the Company as 
necessary to ensure compliance with the provisions of this Decree Law and the 
resolutions issued in implementation hereof.  
4. The Competent Authority shall issue a decision on the incorporation application of the 
Company not later than five [5] business days of the date on which the application is 
filed or on which the information and documents required are provided or the required 
amendments are made. Rejection of the application shall be reasoned.  
5. If the Competent Authority rejects the application or if the time limit mentioned in 
Clause [4] of this Article expires without a decision being made on the application, the 
applicant shall have fifteen [15] business days to file a grievance with the Director 
General of the Competent Authority or other officer acting in lieu of him. If the grievance 
is dismissed or not decided on within fifteen [15] business days of the date of being filed, 
the applicant may appeal against the same before the competent court within thirty [30] business days of the date of being notified of the dismissal decision or of the expiry of 
the above -mentioned time limit, as the case may be.  
6. If the application for company incorporation is approved, the Competent Authority shall 
record the Company in the commercial register and shall issue a business license for the 
company.  
7. The Company shall, within five [5] business days of the issuance date of its business 
license, provide the Registrar with a copy of the business license and MOA of the 
Company in order to be published in accordance with the guidelines laid down by the 
Minister in this respect.

Article (44)  
Details and Documents Required to be Kept  
The General Partnership shall keep the following items at its headquarters:  
1. A register containing the names and addresses of the partners;  
2. A copy of the MOA of the Company and any amendments thereto;  
3. A statement of the cash amounts and the nature and value of any assets contributed by  
Federal Decree Law No. (32) of 2021 on Commercial Companies  24 
       each partner and the dates of such contributions; and . 
4. Any details, documents or other records required to be kept under this Decree Law and 
its implementing resolutions.

Article (45)  
Management of the General Partnership  
1. The General Partnership shall be managed by all the partners. Every partner in a General 
Partnership shall act as an agent of both the Company and other partners in respect of 
the business of the Company, unless the management is delegated under the MOA of 
the Company or an independent contract to one or more partners or to a person who is 
not a partner.  
2. Any partner, who is not a manager, may not be involved in the management affairs 
unless otherwise agreed. However, such partner may request access to the business 
activities of the Company and its books and records, and may give observations thereon 
to the manager of the Company.  
3. Resolutions relating to the business of the Company shall be unanimously adopted by all 
the partners, unless the MOA of the Company provides otherwise.

Article (46)  
Business Competing with the Company's Business  
1. The genera l partner may not, without the written consent of the other partners, carry on 
for his own benefit or for the benefit of third parties any activity which competes with the business of the Company, nor be a general partner in any other General Partnership.  
2. If a partner in the General Partnership carries on, without the consent of the other 
partners, any similar activity which competes with the business of the Company, such 
partner shall pay to the Company all such profits generated by him from such activity.  
  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  25

Article (47)  
Removal of Manager  
1. Where the manager is a partner appointed under the MOA of the Company, he may only 
be removed with the unanimous consent of the other partners or pursuant to a 
judgment by the competent court.  
2. If the manager is a partner appointed under a contract that is independent of the 
company's MOA, or if he is not a partner, whether appointed under the MOA or under a 
separate contract, he may be removed by resolution of the majority of the partners or 
pursuant to a judgment by the competent court.  
3. The removal of the manager in the two instances described in the above two Clauses shall 
not give rise to the dissolution of the Company, unless the MOA provides otherwise.

Article (48)  
Resignation of the Manager  
The manager, whether a partner or not, may resign from the management, provided that he 
serves upon the partners a 60 -day prior notice of resignation, unless his appointment 
contract provides otherwise, failing which, he shall be liable for compensation. The manager's resignation shall not bring Company to dissolution unless the MOA indicates otherwise.

Article (49)  
Prohibited Acts of the Manager  
The manager shall not act beyond the scope of regular management duties except with the consent all the partners or by virtue of an explicit provision in the MOA. This prohibition 
shall apply to the following acts in particular:  
1. Making donations other than routine minimal donations governed by commercial norms;  
2. Sale of the company's property, unless such transaction falls within the company's objectives;   
Federal Decree Law No. (32) of 2021 on Commercial Companies  26 
       3. Mortgaging the company property or assets, even if the manager is authorized to sell the 
company's property under the Company's MOA;  
4. Guaranteeing the liabilities of third parties; or  
5. The sale, mortgage or lease of the Company's business premises.

Article (50)  
Manager Entering into Contracts for his Own Benefit  
1. The manager may not enter into any contracts for his own benefit or for the benefit of any 
of his relatives up to the second degree with the Company without the written 
permission of all the partners to be granted on a case by case basis.  
2. The manager may not carry on any activity of the same kind as that of the Company 
except with the written permission of all the partners, to be renewed annually.

Article (51) 
Liability of the Manager  
The manager shall be liable for the damage sustained by the Company, the partners or third 
parties due to any breach of the provisions of the MOA of the Company or of the 
appointment contract of the manager, or any negligence or error committed by the manager 
in the course of performance of his duties, or due to his failure to exercise due care as 
expected from a prudent person. Any condition to the contrary shall be null and void.

Article (52)  
Liability of Co -Managers  
1. Where there is more than one manager and each of whom is assigned particular 
responsibilities, each manager shall be liable vis -à-vis the partners only for those acts 
which fall within his areas of responsibility. Where there is more than one manager and 
it is stipulated that they perform the management affairs jointly, their resolutions shall only be valid if passed unanimously or by the majority specified in the MOA. However,  
Federal Decree Law No. (32) of 2021 on Commercial Companies  27 
       the MOA may provide that each manager is authorized to individually handle the urgent 
matters whose postponement would entail a substantial loss for the Company or a loss 
of considerable profits.  
2. Where there is more than one manager and each of whom is not assigned particular 
responsibilities under the MOA and they have no duty to act jointly, each of them may 
individually perform any management duties, and, in which case, the other managers 
shall have the right to object to any action before taken by him it is completed. In such case, the majority votes of the managers shall prevail and in the event of a tie; the matter 
shall be referred to the partners whose decision shall be final.  
3. Co -managers shall exercise the degree of care expected from a prudent person in the 
course of performing their duties.

Article (53)  
Liability of the Company  
The General Partnership shall be liable vis -à-vis third parties to indemnify the damage 
arising from the acts of any partner carried out with the consent of the other partners or in 
the normal course of business of the Company.

Article (54)  
The Joining Partner  
Where a partner joins the Company, he shall be jointly liable with the other partners to the extent of all his own property for all of the Company's existing obligations, provided that the 
Company has already disclosed such obligations to that partner. Further, he shall also be 
jointly liable with the other partners to the extent of all his own property for all the 
Company's obligations subsequent to his joining the Company. Any agreement between the 
partners to the contrary may not be invoked vis -à-vis third parties.  
  
 
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  28

Article (55)  
The Withdrawing Partner  
1. Unless the MOA of the Company stipulates otherwise, any partner may withdraw from a 
General Partnership under a written agreement with the other partners. In the absence 
of such agreement, the partner may file a case with the competent court to obtain a 
withdrawal judgment, provided that the other partners are served with a prior notice of 
not less than 60 days by registered mail before the proposed date of withdrawal. The 
Company shall be entitled to claim from the withdrawing partner pay any compensation, 
as applicable.  
2. The withdrawing partner shall remain jointly liable with the other partners of the 
Company for the debts and obligations of the Company prior to his withdrawal, and shall be liable for the same to the extent of his own assets, together with the other 
partners.  
3. Any partner withdrawing from the Company shall not be relieved of any obligations 
assumed the Company after his withdrawal, unless such withdrawal is recorded in the 
commercial register and announced in two daily local newspapers; one of which is 
published in Arabic, and 30 days have lapsed of the date of the completion of the latter 
action.  
4. If the Company consists of two partners and one of them withdraws, the other partner 
may, within six [6] months of the date of recording the withdrawal in the commercial register, bring into the Company one or more new partners in place of the withdrawing partner; otherwise, the Company shall be deemed dissolved ipso facto.

Article (56)  
Assignment of Equity Stakes  
1. Equity stakes may only be transferred in a General Partnership with the consent of all the 
partners, subject to the conditions set out in the MOA of the Company. The assignee 
shall become a partner in the Company after the assignment is registered with the 
Competent Authority and the Registrar is notified of the same.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  29 
       2. Any agreement that permits an unrestricted assignment of equity stakes shall be null and 
void. However, a partner may assign to any third party the rights relating to his equity 
stake in the Company. Such agreement shall legal effect only between the contracting 
parties.

Article (57)  
Rights of the Deceased Partner  
Unless the partners agree otherwise, the amount payable by the remaining partners in respect of the equity stake of the deceased partner shall be a debt payable of the date of 
dissolution of the General Partnership or of the date of death of the partner; whichever 
comes first.

Article (58)  
Transactions of the Company upon Expiry of its Term or Fulfillment of its 
Objects  
1. The rights and obligations of the partners in a General Partnership shall survive if the 
Company continues to operate upon the expiry of its term or the fulfillment of the 
objects for which it is established.  
2. If a bona fide third party continues to deal with one or more General Partners after the 
Company's MOA has been amended or after a resolution is issued to dissolve it, on the 
assumption that the Company is a going concern, such partner[s] shall be held liable 
vis-à-vis third parties prior to the amendment of the Company's MOA or the resolution 
approving its dissolution. Publication of a notice in at least two daily local newspapers, 
one of which is published in Arabic, shall be sufficient notice to persons who dealt with the General Partnership prior to the date of its dissolution or prior to the announcement 
of amendment of its MOA.  
  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  30

Article (59)  
Mutual Obligations Between The Company and Partners  
Without prejudice to the provisions of the MOA of the General Partnership, the following 
obligations shall be observed:  
1. The Company shall pay any amounts the partner has personally paid on behalf of the Company to enable the Company to conduct business as usual or to maintain the assets 
and activities of the Company.  
2. The partner shall indemnify the Company for any benefit gain by him upon performing any work in connection with the Company or due to his use of its property, name or 
trademarks without the consent of the Company.

Article (60)  
Enforcement upon the Partner's Property 
Liabilities of the Company may only be enforced against the property of its partner after 
obtaining a Writ of Execution against the Company when the debt has not been satisfied 
after giving the Company notice to pay. The Writ of Execution against the Company shall 
serve as evidence against the partner.

Article (61)  
Profits and Losses  
1. The profits, losses and the partner's shares therein shall be determined at the end of the 
Company's fiscal year in light of the balance sheet and the profit and loss account.  
2. Each partner shall be considered a creditor of the Company to the extent of his share in 
the profits once such share is determined. Any capital reduction as a result of losses shall be replenished from the profits of the subsequent years, unless there is agreement to the 
contrary and. Other than that, any partner may not be required to replenish his 
contribution to the company's capital resulting from losses except with his own consent.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  31 
       Chapter Two  
Limited Partnership

Article (62)  
Definition of the Company  
A Limited Partnership is a Company which consists of one or more General Partners who are 
jointly and severally liable for the obligations of the Company and act in the capacity of a 
trader, in addition to one or more Limited Partners who are held liable for the obligations of 
the Company only to the extent of their respective capital contributions, and do not act in the capacity of a trader.

Article (63)  
Capacity of the Limited Partner  
Any natural person or legal person may be a Limited Partner in a Limited Partnership.

Article (64)  
Name of the Company  
1. The name of a Limited Partnership shall consist of the name of one or more of the General 
Partners in addition to the legal form of the Company. In addition, the Company may 
have its own trade name.  
2. The name of a Limited Partner may not be included in the name of the Company. If, 
however, such a name is added with his consent, the Limited Partner shall be deemed a 
general partner vis -à-vis the bona fide third parties.

Article (65)  
MOA of Limited Partnership  
1. The provisions relating to General Partnerships shall also apply to Limited Partnerships, 
subject to the provisions of this Chapter in respect of the Limited Partner.  
2. The MOA of a Limited Partnership shall include the names of the General Partners and  
Federal Decree Law No. (32) of 2021 on Commercial Companies  32 
       Limited Partners. If the capacity of such partners are not mentioned in the MOA, the 
Company shall be deemed a General Partnership and, accordingly, all the partners 
thereof shall be deemed General Partners.  
3. The Limited Partner's capital contribution may not be work.

Article (66)  
Management of the Company  
The Company shall be managed only by the General Partners. Resolutions shall be passed 
unanimously by the General Partners, unless the Company's MOA provides for a majority. 
No change in the nature of the business of the Company or any amendment to its MOA 
shall be valid without the consent of all the General and Limited Partners.

Article (67)  
Borrowing Funds by the Company 
1. The General Partner of a Limited Partnership shall have all the rights and powers of any 
partner of a General Partnership, and shall be subject to all the conditions, restrictions 
and obligations imposed on the partner of a General Partnership.  
2. A loan or any other obligation entered into by a General Partner in the name or for the 
benefit of the Company shall be deemed an obligation of the Company itself.

Article (68)  
Rights of the Limited Partner  
1. A Limited Partner shall have the same rights of a General Partner in relation to:  
a. Lending money to, and entering into transactions with, the Company, subject to the 
consent of all General Partners;  
b. Getting access to and obtaining copies or extracts of the books and records of the Company at all times during the business hours of the Company;  
c. Obtaining full and accurate information about the Company's activities and a formal  
Federal Decree Law No. (32) of 2021 on Commercial Companies  33 
       statement in respect thereof;  
d. A Limited Partner may perform any of the acts mentioned in Clause [1/A] of this 
Article either in person or through other partners or third parties, provided that no 
damage to the Company occurs as a result of the same.  
2. For the purposes of this Article, a Limited Partner shall not be deemed involved in the 
management of a Limited Partnership upon conducting any internal control activities of the Company, and shall not be jointly liable for the liabilities of the Company vis -à-vis 
bona fide third parties.

Article (69)  
Management Activities  
1. A Limited Partner may not get involved in the management activities related to third 
parties, but may demand a copy of the profit and loss account and the balance sheet, and 
may verify, either in person or by a proxy who is a partner or non -partner, their contents 
by way of reviewing the Company's books and records, provided that no damage to the Company occurs as a result of the same.  
2. If a Limited Partner violates the prohibition provided for in Clause [1] above, he shall be 
liable to the extent of all his own property for the obligations arising from his acts.  
3. A Limited Partner may be held liable to the extent of all his own property for all the 
obligations of the Company, if his management activities cause third parties to believe 
that he is a General Partner. In which case, the provisions concerning General Partners 
shall also apply to the Limited Partner.  
4. If a Limited Partner conducts any prohibited management activities under an explicit or 
implicit authorization from the General Partners, such partners shall be held jointly liable 
for the obligations that may arise from such acts.

Article (70)  
Assignment of Equity Stake  
A Limited Partner may only assign his share in the Company to a third party, in whole or in  
Federal Decree Law No. (32) of 2021 on Commercial Companies  34 
       part, with the consent of all the partners or as provided for in the MOA of the Company. The 
assignee shall become a partner of the Company only after the assignment is duly registered 
with the Competent Authority and the Registrar is notified thereof.  
  
Part Three  
Limited Liability Company  
Chapter One  
Incorporation of Limited Liability Company

Article (71)  
Definition of the Company  
1. A limited liability company is a company whose number of partners is at least two and 
does not exceed fifty [50]. Any partner thereof shall be liable only to the extent of his capital contribution.  
2. Any single natural or legal person may incorporate and own a limited liability company. 
The capital owner of the company shall be liable for the obligations of the company only 
to the extent of the capital set out in its MOA. The provisions of the limited liability 
company contained in this Decree Law shall apply to such a person, without 
contradicting the nature of the company.

Article (72)  
Name of the Company  
1. A limited liability company shall have a name derived from its objective or from the name 
of one or more of its partners, provided that the name of the company shall be followed 
by the expression "Limited Liability Company" or in short "LLC". In the case of One 
Person Company (OPC), the name of the company shall be followed by the expression 
"Limited Liability One Person Company (OPC)". The Cabinet may - based upon the 
proposal of the Minister -  issue a resolution on the procedures for incorporating and 
managing the "limited liability" One Person Company (OPC) in light of its nature.  
2. If the manager[s] violate the provision of Clause [1] of this Article, they shall be held  
Federal Decree Law No. (32) of 2021 on Commercial Companies  35 
       jointly liable in their private property for the obligations of the company, and, where 
applicable, for the damages.

Article (73)  
MOA and Incorporation Procedures  
1. The limited liability company shall be incorporated as set forth in Articles [42] and [43] of 
this Decree Law.  
2. The MOA shall include the methods for settling the disputes that arise out of the business 
affairs of the company, whether between the company and any of its managers or among the partners of the company.

Article (74)  
Partners Register of the Company 
1. The Company shall keep at its headquarters a special register of partners, which shall 
include the following details:  
a. Full name, nationality, date of birth and place of residence of every partner, and, if the partner is a legal person, the address of its headquarters;  
b. Transactions affecting the equity stakes and the dates of such transactions.  
2. The managers of the Company shall be responsible for both such register and the 
accuracy of its details. The partners and any stakeholder may review such register.  
3. The Company shall furnish to both the Competent Authority and the Registrar, in January 
every year, with the details recorded in the Partners Register along with all changes in 
such details during the previous fiscal year.

Article (75)  
Increase of Partners  
1. If, at any time after the incorporation of the Company, the number of partners increases 
above the limit set in Article [71] of this Decree Law, the manager or managers, as the case may be, shall notify the Competent Authority within thirty [30] days of the date of  
Federal Decree Law No. (32) of 2021 on Commercial Companies  36 
       such increase.  
2. Except for the transfer of title to the equity stake of a partner by way of inheritance or 
under a final court order, the Company shall adjust its status within [3] months of being 
notified, and the Competent Authority may extend such time limit for extra [3] months; otherwise the Company shall be deemed terminated. The partners shall be held jointly 
and severally liable to the extent of their own property for the debts and obligations of 
the Company as of the date of increase of partners.  
3. The provisions of Clause [2] of this Article shall not apply to partners who are proven to 
have been unaware of such increase or who have opposed it.

Article (76)  
Capital of the Company  
1. The Company shall have an adequate capital to achieve the purpose of its incorporation 
consisting of stakes of equal value. Upon the proposal of the Minister in coordination 
with the relevant authorities, the Cabinet may issue a resolution specifying a minimum 
capital of the Company.  
2. Capital contributions shall be cash and/or in kind and shall be fully settled at the time of 
incorporation.  
3. Cash contributions shall be deposited with a bank operating in the State. The bank may 
deliver such contributions only to the managers of the Company upon furnishing a proof that the Company has been registered with the Competent Authority and within the 
limits specified in the appointment contract of such managers.

Article (77)  
Indivisibility of Partner's Stake 
A partner's stake shall be indivisible. If such stake is held by several persons and none of 
whom has been appointed to act as their designated representative before the Company, the 
person whose name appears first in the MOA shall represent such partners. The Company 
may give the owners of the stake a time limit to make such choice, so that once the time limit  
Federal Decree Law No. (32) of 2021 on Commercial Companies  37 
       has expired, it may sell the stake for the benefit of its owners. In which case, the partners 
shall have a preemption right to acquire such stake. If the preemption right is exercised by 
more than one partner, the available -for-sale stake shall be divided among them in 
proportion to their respective capital contributions, unless agreed otherwise.

Article (78)  
Valuation of In -kind Contributions  
1. Partners of the Limited Liability Company may provide in -kind contributions against their 
equity stakes.  
2. The in -kind contributions shall be valuated at the expense of the contributing partners, by 
one or more financial advisors approved by the SCA to be selected by the Competent 
Authority, failing which, the valuation shall be null and void.  
3. The Competent Authority may discuss and object to the valuation report and may appoint 
a substitute valuator, as required, at the expense of the contributing partners.  
4. Notwithstanding the provisions of Clause [2] of this Article, the partners may agree on the 
value of the in -kind contribution, and, in which case, its value shall be approved by the 
Competent Authority. The contributing partner shall be liable vis -à-vis third parties for 
the accurate valuation of such in- kind contribution stated in the MOA. If the in -kind 
contributions are found to have been valuated in an amount higher than their real value, 
the contributing partner shall pay the difference in cash to the Company.

Article (79)  
Assignment or Pledge of Partner's Equity Stake 
1. Any partner may assign or pledge his stake in the Company to any other partner or to a 
third party. Such assignment or pledge shall be made in accordance with the terms of the MOA of the Company under a formal instrument duly attested in accordance with the 
provisions of this Decree Law. Such assignment or pledge shall be valid vis -à-vis the 
Company or third parties only as of the date of being recorded in the commercial register 
with the Competent Authority.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  38 
       2. The Company may not decline to record such assignment or pledge in the register unless 
the same violates the provisions of the MOA or this Decree Law.

Article (80)  
Procedures for Assignment of Partner's Stake in the Company  
1. If a partner wishes to assign his stake to a non -partner of the company, with or without 
compensation, such partner shall notify the other partners through the manager of the 
Company of the assignee or purchaser and the terms of the assignment or sale. The 
manager shall then notify the partners as soon as he receives the notice.  
2. Each partner may request redemption of the stake mentioned in Clause [1] of this Article 
within thirty [30] days of the date on which the manager is notified of the agreed price. 
In case the price is a matter of disagreement, the stake price shall be assessed by one or 
more experts having technical and financial experience in the subject of the stake and 
nominated by the Competent Authority, based upon a request of the applicant for redemption and at the latter's expense.  
3. If the right of redemption is exercised by more than one partner, the stake[s] offered for 
sale shall be divided among such partners in proportion to their respective capital 
contributions, subject to the provisions of Article [76] of this Decree Law.  
4. If the time limit mentioned in Clause [2] of this Article expires without any partner 
exercising the right of redemption, the partner concerned shall be entitled to freely dispose of his stake.

Article (81)  
Enforcement Against Partner's Stake in the Company  
If the creditor of a partners institutes enforcement proceedings against the equity stake of 
his debtor, he may agree with both the debtor and the Company on the method and terms 
of sale. Otherwise, the stake shall be offered for sale at an open auction based on an 
application to be submitted to the competent court. One or more partners may redeem the 
sold stake under the same terms of auction award, within [15] days of the date of award.  
Federal Decree Law No. (32) of 2021 on Commercial Companies  39 
       These provisions shall apply in the event of bankruptcy of a partner.

Article (82)  
Partner's Liability for any Profit or Benefit to the Company  
The partner of a limited liability company shall be held liable vis -à-vis the company for any 
of the latter's property held by such partner in a fiduciary capacity, or for any profits or 
benefit gained by him through the business or activities of the Company, or due to his use of 
the property, name or business relationships of the Company.  
  
Chapter Two  
Management of the Company

Article (83)  
Managers of the Company  
1. The management of a limited liability Company shall be entrusted to one or more 
managers as determined by the partners in the MOA. Such managers shall be selected 
from among the partners or from third parties. If managers are not appointed in the 
MOA of the Company or under a separate contract, the General Assembly of Partners 
shall appoint the managers. If there is more than one manager, the partners may appoint 
a board of directors and vest in it such powers and functions as set out in the MOA.  
2. Unless the appointment contract of the manager of the Company or its MOA or AOA 
restricts the powers conferred upon the manager, the latter shall have full powers to 
manage the Company, and his actions shall be binding upon the company, provided that 
the capacity in which he acts is explicitly stated.

Article (84)  
Liability of Company's Managers  
1. Every manager of the Limited Liability Company shall be held liable vis -à-vis the 
Company, the partners and third parties for any fraudulent acts committed by such  
Federal Decree Law No. (32) of 2021 on Commercial Companies  40 
       manager. He shall also be liable for any losses or expenses incurred by the company due 
to improper exercise of the powers or violation of the provisions of any law in force, the 
MOA of the Company or the appointment contract of the manager or for any gross error 
committed by the manager. Any provision in the MOA or the appointment contract of the manager in conflict with the provisions of this Clause shall be null and void.  
2. Subject to the provisions on Limited Liability Companies set out in this Decree Law, the 
provisions that apply to the Directors of Joint Stock Companies as set forth in this Decree Law shall also apply to the managers of Limited Liability Companies.

Article (85)  
Vacant Position of Manager  
1. Unless the MOA of the Company or the appointment contract of the manager provides 
otherwise, the manager shall be removed by a resolution of the General Assembly, 
whether the manager is a partner or not. The court may also order that the manager be 
removed based upon the request of one or more partners of the Company, if the court is 
convinced that such removal is well- justified.  
2. The manager may submit a written resignation to the General Assembly, with a copy 
thereof to be sent to the Competent Authority. The General Assembly shall decide whether to approve or reject the resignation within [30] days of its submission date; 
otherwise, the resignation shall become approved once such time limit expires, unless the MOA of the Company or the appointment contract of the manager provides 
otherwise.  
3. The Company shall notify the Competent Authority of the expiration of the term of the 
manager's appointment contract, not later than [30] days of the expiry date thereof 
without being renewed . The Company shall appoint a substitute manager during such period.  
4. If the term of office of the Board of directors of the company expires and the same is not 
reconstituted, the Board of directors shall continue to conduct the business of the 
company for a period not exceeding [6] six months of the date of expiration of the said  
Federal Decree Law No. (32) of 2021 on Commercial Companies  41 
       term of office. Upon expiration of the [6] six -month period, the General Assembly shall 
compose the Board of directors. Otherwise, the Competent Authority may, in 
coordination with the authorities concerned with the activity, if any, after the expiration 
of that period, appoint a Board of directors from among the partners for a term of office not exceeding one year, during which a General Assembly meeting shall be called to 
elect the directors.

Article (86)  
Manager's Engagement in Competing Activities  
The manager may not, without the consent of the General Assembly of the Company, 
manage a competing company or a company with objects similar to those of the Company 
or make, for his own benefit or for the benefit of third parties, deals in any business that 
competes with or is similar to the business of the Company, otherwise, the manager may be 
dismissed and required to pay compensation.

Article (87)  
Responsibility for Preparing Accounts  
The manager of the Company shall prepare the annual balance sheet and profit and loss 
account, shall also prepare an annual report on the activities and financial position of the 
Company, and shall provide his recommendations on the distribution of the profits to the 
General Assembly, within [3] months of the end of the fiscal year.

Article (88)  
Appointment of Supervisory Board  
1. If the number of the partners exceeds fifteen [15], the partners shall appoint a supervisory 
board consisting of at least three partners. They shall be appointed for a [3] three -year 
term of office beginning on the issuance date of the appointment decision. The General Assembly may reappoint such partners when their term of office expires or may appoint  
Federal Decree Law No. (32) of 2021 on Commercial Companies  42 
       other partners in their place. Members of the supervisory board may be removed at any 
time for good cause by the General Assembly.  
2. Non -partner managers may not vote on the appointment or removal of members of the 
supervisory board.

Article (89)  
Powers of the Supervisory Board  
The supervisory board shall be authorized to scrutinize and examine the books and records of the Company and to require the managers at any time to provide a report on their 
management activities. The supervisory board shall monitor the balance sheet, the annual 
report and the distribution of the profits, and shall present a report on the same to the General Assembly of the Company at least five [5] days before its convention date.

Article (90)  
Liability of Members of the Supervisory Board  
Members of the supervisory board shall only be held liable for the acts of the managers if such members are aware of the errors committed and fail to mention them in their report 
submitted to the General Assembly of Partners.

Article (91)  
Rights of Non -Managing Partners  
Partners who are not managers of a Limited Liability Company with no supervisory board 
shall have all the rights associated with the description of the partners provided for in this 
Decree Law or in the MOA. Any agreement to the contrary shall become null and void.  
  
 
 
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  43 
       Chapter Three  
General Assembly

Article (92)  
Formation and Convention of General Assembly  
1. The limited liability company shall have a General Assembly made up of all the partners. 
The General Assembly shall be convened by a call of the manager or the board of 
directors at least once in the year during the four months following the end of the 
company's fiscal year. The General Assembly shall be convened at the time and place described in the Notice of Meeting.  
2. The manager, or the person authorized by the managers, shall call a General Assembly 
Meeting upon the request of one or more partners who hold at least [10%] of the shares 
of the company's capital.

Article (93)  
Service of Notice of General Assembly Meeting  
1. With exception of the General Assembly Meeting being postponed due to the lack of 
quorum in accordance with the provisions of Article [96] of this Decree Law, a call for the General Assembly meeting shall be served according to the controls and terms to be 
issued under a relevant resolution of the Minister, subject to the following:  
a. The notice of General Assembly Meeting shall be sent at least twenty -one [21] days 
prior to the scheduled date of meeting.  
b. The notice of General Assembly Meeting shall be sent in accordance with the 
notification method to be issued under a relevant resolution of the Minister.  
c. The partners shall be notified by registered letters or through modern means of 
technology described in the company's MOA.  
d. The Competent Authority shall be served, before the notification, with a copy of the 
notice of General Assembly Meeting.  
2. The notice of meeting shall include the agenda, venue, date and time of the first meeting 
and the se cond meeting [in the event of lack of quorum for the first meeting], details of  
Federal Decree Law No. (32) of 2021 on Commercial Companies  44 
       the persons entitled to attend the General Assembly Meeting and the permissibility of 
delegating whoever they select from among the partners [other than the managing 
partners] or from third parties under a special written power of attorney and their 
eligibility to discuss the matters listed in the General Assembly's agenda, and to pose questions to the manager or the board of directors, the auditor, the quorum required for 
each of the meetings of the General Assembly and the resolutions issued thereat.  
3. It shall be permissible for meetings of the General Assembly to be held and for the partner 
to participate in its deliberations and vote on its resolutions through modern means of 
technology for telepresence according to the controls set forth by the Minister in this 
regard.

Article (94)  
Competences of Annual General Assembly  
The General Assembly of a Limited Liability Company shall, at its annual meeting, consider 
and decide on the following issues:  
1. The managers' report on the activities and financial position of the Company during the previous fiscal year, the auditor's report, and the supervisory board's report;  
2. The balance sheet and profit and loss account and their approval;  
3. The dividends to be distributed to the partners;  
4. The appointment and remuneration of managers;  
5. The appointment of directors [if any;[ 
6. The appointment of members of the supervisory board [if any];  
7. The appointment of members of the Internal Sharia Supervisory Committee and the 
Sharia Controller if the Company conducts its business in compliance with the rules of 
Islamic Sharia;  
8. The appointment and remuneration of an auditor[s]; and  
9. Any other matters falling within the competence of the General Assembly under the provisions of this Decree Law or the MOA of the Company.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  45

Article (95)  
Attendance of General Assembly Meetings  
Irrespective of the number of shares held by him, each partner shall have the right to attend 
the General Assembly Meeting either in person or through delegating under special 
authorization any other non -managing partner to represent the partner at the General 
Assembly Meeting. Each partner shall have a number of votes equal to the number of shares held or represented by such partner.

Article (96)  
Quorum for General Assembly Meeting and Voting on its Resolutions  
1. Unless the company's MOA determines a higher percentage, the quorum for a valid 
meeting of the General Assembly shall be the attendance of partners who hold at least [50%] of the shares of the company's capital, subject to the provision of Article [95] of 
this Decree Law.  
2. If the quorum described in Clause [1] of this Article is not reached at the first meeting, the 
General Assembly shall be called for a second meeting to be held within at least five [5] days or a maximum of fifteen [15] days of the date of the first meeting. The second 
meeting shall be deemed valid regardless of the number of attendees.  
3. Subject to the provisions of this Decree Law, the resolutions of the General Assembly shall 
only be valid if issued by a majority of the shares represented at the meeting, unless the 
MOA stipulates a greater majority.

Article (97)  
Listing a New Issue in the General Assembly's Agenda  
The General Assembly may not deliberate on issues that are not listed in the agenda, unless 
serious issues that require consideration arise during the meeting. If, at the start of the 
meeting, a partner requests that a certain issue be listed in the agenda, the managers shall respond to the request, failing which, such partner may resort to the General Assembly.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  46

Article (98)  
Deliberations on Issues Listed in the General Assembly's Agenda  
Each partner shall have the right to discuss the issues listed in the agenda. The managers 
shall be required to respond to the queries of partners to the extent that no harm is likely to 
be occur to the interests of the Company. If a partner is convinced that the response to his 
query is inadequate, he may resort to the General Assembly whose decision on the matter 
shall be enforceable.

Article (99)  
Voting to Discharge the Managing Partner  
A managing partner may not vote on resolutions to discharge himself from liability for management.

Article (100 )  
Register of General Assembly Meetings  
A minutes adequately summarizing all deliberations of the General Assembly shall be 
drafted, and the minutes and resolutions of the General Assembly shall be recorded in a 
special register to be kept at the headquarters of the Company. Any partner may access to 
the minutes either in person or through a proxy, and may also inspect the balance sheet, the 
profit and loss account and the annual report.

Article (101 )  
MOA Amendment, Capital Increase or Reduction  
1. Notwithstanding the provision of Article [85] of this Decree Law, the company's MOA 
may not be amended and its capital may not be increased or reduced unless approved by a number of partners holding at least three quarters of the shares represented at the 
meeting of the General Assembly. The ratio of increase or reduction shall be according to 
the equity stakes of the company's partners. In all cases, the financial obligations of the  
Federal Decree Law No. (32) of 2021 on Commercial Companies  47 
       partners may only be increased based on their unanimous consent.  
2. If the increase in the company's capital is necessary to save the company from liquidation 
or to settle debts owed thereby to a third party, based on a report of the company's chief 
financial officer or his delegate, and the company does not have sufficient liquidity to settle such debts or to achieve the ratio stipulated in Clause [1] of this Article, any 
partner may recourse to the courts seeking a summary judgement to increase the capital 
as necessary to save the company or settle the debts. In the event that any partner fails to settle the obligations resulting from the increase, any other partner may settle the same 
on his behalf. In such a case, a number of shares of the company equal to the amount 
paid for both himself and the defaulting partner shall be granted to the paying partner.

Article (102 )  
Auditors of the Company 
The Limited Liability Company shall have one or more auditors to be appointed each year by the General Assembly of Partners and, notwithstanding the provisions of Article [246] of this 
Decree Law, the provisions on auditors of public joint stock companies shall also apply to 
the auditor of the Limited Liability Company. The words "Competent Authority" shall replace 
the term "Authority" wherever it appears.

Article (103 )  
Statutory Reserve  
The Limited Liability Company shall set aside every year [5%] of its net profits to form a 
statutory reserve. The partners may resolve to stop such allocation if the reserve reaches 
50% of the capital amount.

Article (104 )  
Applicability of the Provisions of Joint Stock Companies  
1. Unless otherwise provided for in this Decree Law, the provisions concerning joint stock  
Federal Decree Law No. (32) of 2021 on Commercial Companies  48 
       companies shall also apply to the limited liability company, and which are consistent 
with its nature. The Competent Authority shall replace the SCA wherever mentioned.  
2. The Cabinet shall issue, based upon a proposal of the Minister, a resolution containing the 
provisions to be applied to limited liability companies in cases where the provisions of the joint stock company are not compatible with the nature of the limited liability 
company, without violating or conflicting with the provisions of this Decree Law. Such 
resolution shall determine the meaning of the related parties and the deals with regard to limited liability companies.  
  
Part Four  
Public Joint Stock Companies  
Chapter One  
Definition and Incorporation of the Public Joint Company and its

Article (105 )  
Definition of the Company  
The Public Joint Stock Company is a Company whose capital is divided into negotiable 
shares of equal value. The founders shall subscribe for part of such shares, while the rest 
shall be offered to the public through a Public Offering. A shareholder shall be liable only to 
the extent of his capital contribution of the Company. The Cabinet may, based on the 
Minister's proposal and in coordination with the local authority, issue a resolution 
determining the minimum and maximum value of the founders' subscription for the capital.

Article (106 )  
Name of the Company  
Every Public Joint Stock Company shall have a trade name, which may not be the name of a natural person, unless the object of the Company is to exploit a patent registered in the 
name of such person or if the Company owns a trade name or acquires the right to use such 
a name. In all cases, the words "Public Joint Stock Company" shall be suffixed to the name of  
Federal Decree Law No. (32) of 2021 on Commercial Companies  49 
       the Company.

Article (107 )  
Number of Founders  
1. Five or more persons may form a Joint Stock Company.  
2. The Federal Government, the Local Government and any Company or entity wholly 
owned by either may hold an equity stake in a Public Joint Stock Company or 
incorporate by itself a Public Joint Stock Company, and may also join, in contribution to 
the share capital, a number less than that provided for in Clause [1] of this Article.  
3. The conversion of any Company into a Public Joint Stock Company shall not be governed 
by the minimum number mentioned in Clause [1] of this Article.

Article (108 )  
Term of the Company  
The term of the Company shall be determined in its MOA and AOA. Under a special resolution, such term may be extended or shortened if the object of the Company so 
requires.

Article (109 )  
Founders  
1. The founder is every person who signs the MOA of the Company and holds a ratio of its 
share capital in cash or provides in -kind contributions at the time of incorporation, 
subject to the provisions of this Decree Law.  
2. The founder shall be liable for any damage suffered by the Company or third parties due 
to any breach of the incorporation rules and procedures. The founders shall be jointly liable for their obligations. Any person delegated by any other person for the incorporation of the company shall be held personally liable if he fails to state the name 
of the principal or if the instrument of delegation is proven to be invalid.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  50

Article (110 ) 
MOA and AOA of the Company  
1. The founders shall draft the MOA and AOA of the Company, which shall include the 
following particulars:  
a. The name and headquarters of the Company;  
b. The object for which the Company is incorporated;  
c. The full name, nationality, date of birth, place of residence and address of each 
shareholder;  
d. The amount of capital and the number of the capital shares, the nominal value per share and the paid -up amount of the value of each share;  
e. An undertaking by the founders to procure the completion of the incorporation procedures;  
f. An estimate of the amount of expenses, charges and costs expected for the 
incorporation process, and which are required to be paid by the Company due to its 
incorporation.  
g. Details of the in -kind contributions, the name of the contributor[s], the initial value 
of such contribution[s], the terms of such contributions and the rights of pledge and 
lien attached to such contributions, if any.  
2. The MOA and AOA of the Company shall be compliant with both this Decree Law and its 
implementing resolutions thereof, and shall include the provisions, competencies and powers of the board of directors and the General Assembly of the Company. The SCA 
shall issue standard MOA and AOA forms which the companies shall adopt.

Article (111 )  
Shareholder's Compliance with the AOA  
1. Subject to the provisions of this Decree Law, the AOA of the Company shall, once the 
latter is registered in the commercial register maintained by the Competent Authority, be binding upon all its shareholders.  
2. Any amount payable by a shareholder to the Company under the provisions of the AOA  
Federal Decree Law No. (32) of 2021 on Commercial Companies  51 
       shall be deemed a debt owed by such shareholder to the Company.

Article (112 )  
Founders Committee 
1. The founders shall choose from among themselves a committee to be called the 
"Founders Committee", consisting of at least three members. The Founders Committee 
shall manage the procedures of incorporating the company and shall be responsible for 
the accuracy, validity and completeness of all the documents, studies and reports 
provided to the relevant entities.  
2. It shall be permissible for the Founders Committee to delegate one of its members or a 
third party to pursue and complete the incorporation procedures with the SCA and the 
Competent Authority according to the controls established by the SCA in this respect.  
3. The Founders Committee shall appoint a financial consultant, a legal consultant and an 
auditor for managing the underwriting process.

Article (113 )  
Incorporation Procedure before the Competent Authority  
1. The Founders Committee shall submit an incorporation application to the Competent 
Authority, together with the MOA and AOA of the Company, an economic feasibility 
study for the business venture to be established by the Company and the proposed 
timetable for its implementation, and such other documents as the Competent Authority 
may require.  
2 .The Competent Authority shall consider the incorporation application and shall furnish to 
the SCA the incorporation application and the documents annexed thereto.

Article (114 )  
Incorporation Procedures before the SCA  
1 . The SCA shall review the MOA and AOA of the company, the economic feasibility of the 
venture to be established by the company and the proposed schedule for its  
Federal Decree Law No. (32) of 2021 on Commercial Companies  52 
       implementation, the Prospectus and any approvals by the competent authorities in 
relation to the application in accordance with the applicable requirements of the SCA.  
2. The SCA shall consider the incorporation application and shall notify the Founders 
Committee of its observations on the incorporation application and its supporting documents within 10 [ten] business days of the date of filing a complete application or 
of the date on which the valuator appointed by the SCA presents his final report on the 
valuation of the in -kind contributions, if any. The Founders Committee shall complete 
any deficiencies or make such amendments as the SCA may deem necessary to complete 
the incorporation application, within fifteen [15] business days of the notification date, 
failing which, the SCA may consider the same as waiver of the incorporation application.  
3. The SCA shall send a copy of the application and its supporting documents to the 
Competent Authority within 10 [ten] business days of t he date of filing a complete 
application, in order to be considered. A Joint Committee comprising members from both the SCA and the Competent Authority and formed under an administrative resolution issued by the SCA, shall convene within 10 [ten] business days of the date of 
sending the application to the Competent Authority. If the Competent Authority has any 
observations, the SCA shall notify the Founders Committee of the same, and the latter 
shall have 10 [ten] business days to complete any deficiencies or to make such 
amendments as the Competent Authority may require for completing the incorporation application, within ten [10] business days of the date of notification of the Founders 
Committee. Failing which, the SCA may consider the same as waiver of the incorporation 
application. After verifying that all the documents are complete and that all observations 
have been rectified, the SCA shall send an amended copy to the Competent Authority.  
4. If the Joint Commission rejects the incorporation application or if the time limit referred to 
in Clause [3] of this Article expires without a decision, the Founders Committee may 
appeal against the rejection decision before the competent Federal Court within thirty 
[30] days of the date on which it is notified of the rejection decision, or of the date on 
which such time limit expires in the absence of a decision approving the incorporation of 
the company.  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  53

Article (115 ) 
Attestation of the MOA  
The Founders Committee shall have the MOA duly attested in accordance with the 
provisions of this Decree Law and provide to the SCA a copy of the MOA and a copy of the 
Competent Authority's initial decision approving the license as well as a certificate from a 
bank licensed to operate in the State confirming that the founders have paid their respective capital contributions, prior to the approval of the Prospectus by the SCA.

Article (116 )  
Amendment of Incorporation Application's Information  
The information of the incorporation application may not be amended, at any stage of the 
incorporation process, once it has been submitted to the Competent Authority, whether 
such information pertains to the capital or objects of the Company, the names of the founders or otherwise. If this occurs, the matter shall be referred to the Competent Authority 
for necessary action.

Article (117 )  
Founders' Contribution to the Company's Capital  
1 .The Founders shall subscribe for shares of the company's issued capital to the extent of 
the ratio described in the Prospectus, before offering the remaining shares of the 
company at a public offering, subject to the requirements of the SCA in this regard.  
2. The founders may not subscribe for shares offered for sale at a public offering.

Article (118 )  
Valuation of In -kind contributions  
1. Founders of the company may provide in -kind contributions in consideration of their 
shares in the company, and the valuation of such contribution shall take place at the 
expense of their contributors.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  54 
       2. The in -kind contributions shall be valuated according to the controls and procedures to be 
issued under a resolution of the SCA in this regard.  
3. The valuator may review any information or documents deemed necessary to carry out 
the required valuation and to prepare the valuation report efficiently. The Founders 
Committee or the Board of Directors, as applicable, shall take the necessary actions to 
provide the valuator with the information, papers and documents required as soon as 
practically possible of the date of the application.  
4. The Founders Committee and the Board of Directors, if applicable, shall both be fully 
liable for the accuracy, adequacy and completeness of the data and information. The 
valuator shall exercise due diligence upon carrying out his duties.  
5. The SCA may discuss and object to the valuation report. It may also appoint a substitute 
valuator, if required, at the expense of the under -incorporation company.  
6. It shall be permissible for the contribution or in -kind contributions provided by a public 
person to be a concession or a right to use any public property.

Article (119 )  
Subsequent Valuation of In- kind contributions  
The valuation of in -kind contributions following the incorporation process of the Company 
shall be subject to the same valuation provisions set forth in this Decree Law.

Article (120 )  
Overvaluation of In- kind contributions  
1. If the SCA is convinced that there is any overvaluation or negligence in the valuation of 
in-kind contributions by the valuator, the SCA may:  
a. Prevent the valuator from carrying out valuation activities for the SCA for a period of at least two years.  
b. Permanently prevent the valuator from carrying out valuation activities for the SCA 
in case of repeated violation.  
2. The valuator may file a grievance against the SCA's decision with the chairman of the SCA  
Federal Decree Law No. (32) of 2021 on Commercial Companies  55 
       within fifteen [15] business days of receiving notice of either of the two decisions 
mentioned in Clause [1] of this Article. If the chairman of the SCA dismisses the 
grievance or fails to make a decision thereon within fifteen [15] business days after 
being filed, the valuator may appeal the same before the competent court within thirty [30] business days of the date on which the grievance is dismissed or of the expiry date 
of the time limit set for issuing a decision on the grievance, as the case may be.

Article (121 )  
Invitation to Public Offering  
1. The prospectus shall be signed by the Founders Committee and the board of directors, if 
applicable, and they shall be responsible for the validity of the data and information set 
out in the prospectus. The consultants and parties involved in the public offering process 
and their representatives shall exercise due diligence as expected from a prudent person 
and each of them shall be responsible for fulfilling his duties.  
2. Invitation to public offering shall be made by a prospectus to be published in two daily 
local newspapers; one of which to be issued in Arabic, at least five business days prior to 
the start date of the offering.  
3. Subscription for the shares shall be made in accordance with an application the details of 
which to be determined by the SCA. The application shall include, in particular, the name, objects and capital of the company, the conditions of subscription, the subscriber's name, address in the State, profession and nationality, the number of the 
shares subscribed for by the subscriber, and the latter's undertaking to accept the 
provisions of the MOA and AOA of the company.

Article (122 )  
Entities Authorized to Receive Subscription Applications  
1. Subscription applications shall be submitted to a duly licensed entity/ entities in the State, 
as specified by the Founders Committee in the Prospectus. Subscription applications 
may also be submitted electronically as determined by the SCA in this respect.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  56 
       2. The entity / entities receiving the subscription applications shall keep the money paid by 
the subscribers and the subscription proceeds for the benefit of the under -incorporation 
Company. Such money shall only be paid to the board of directors of the Company after 
the SCA issues a certificate of incorporation of the Company and the latter is registered in the commercial register maintained by the Competent Authority.

Article (123 )  
Underwriter  
1. Without prejudice to the provisions of Article [10] of this Decree Law, the company may 
have, upon incorporation or upon increase of its capital, one or more underwriters to be 
approved by the SCA in accordance with the conditions, controls and procedures issued 
under a resolution of the SCA.  
2. A resolution shall be issued by the board of directors of the SCA indicating the controls 
and conditions for the practice of underwriting activities in the State.

Article (124 )  
Subscription Controls and Procedures  
1. Subscription shall remain open throughout the duration described in the Prospectus, 
which may not exceed thirty [30] business days.  
2. If all shares offered for subscription are not fully underwritten within the specified 
duration, the Founders Committee may apply to the SCA for approval to extend the 
period of subscription for an additional period not exceeding the duration specified in 
the Prospectus.  
3. If the additional period expires without all shares offered for public subscription are 
underwritten, the founders may underwrite the remaining shares subject to the 
requirements of the SCA in this regard.  
  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  57

Article (125 )  
Distribution of Shares to Subscribers  
If the shares offered for subscription are oversubscribed, the available shares shall be 
distributed to the subscribers in proportion to their respective subscriptions or as 
determined in the Prospectus and approved by the SCA. The shares distributed shall be 
rounded to the nearest whole number.

Article (126 )  
Allotment of Shares and Return of Excess Amounts  
The entities licensed to receive subscription applications shall, upon closure of subscription, 
take the following actions:  
1. Allot the shares to the subscribers within not more than five [5] business days of the date 
of closure of subscription.  
2. Refund the excess amounts paid by the subscribers and the proceeds for which no 
shares have been allotted, not later than five [5] business days of the date of allotment of 
shares to subscribers.

Article (127 )  
Subscription by Emirates Investment Authority  
Emirates Investment Authority may subscribe for the shares of any Public Joint Stock 
Company incorporated in the State and which offers its own shares for public subscription, 
at a ratio not exceeding 5% of the shares offered for public subscription, provided that the 
value of such shares is paid prior to subscription deadline and that the SCA is provided with a proof of such payment.

Article (128 )  
Announcement of Non- Incorporation of the Company 
If the Co mpany is not incorporated, the SCA shall announce such situation to the public.  
Federal Decree Law No. (32) of 2021 on Commercial Companies  58 
       Such announcement shall entail the following:  
1. Subscribers shall be entitled to recover the am ounts paid by them within 10 [ten] 
Business days of the date of the announcement, together with their interests. The 
founders shall be jointly liable for the refund of such amounts and, if applicable, compensation.  
2. The founders shall bear the expenses incurred in the course of incorporating the 
Company and shall be jointly liable vis -à-vis third parties for their own acts and conduct 
during the incorporation period.

Article (129 ) 
Book Building  
Subject to the provisions of Articles [117 and 279] of this Decree Law, the SCA may issue a 
resolution regulating the mechanism of subscription on the basis of Book Building. Entities 
wishing to follow such method shall comply with the provisions and procedures contained 
in the resolution to be issued by the SCA in this respect.

Article (130 )  
Incorporation Expenses  
The Company shall bear all the expenses incurred by the Founders Committee in the course 
of incorporating the Company and issuing its Securities. A detailed statement of such 
expenses shall be submitted to the Constituent General Assembly of the Company for 
consideration and approval.

Article (131 )  
Constituent General Assembly  
1. The Prospectus of offering the Company's shares at a Public Offering shall include a call to the shareholders to hold a Constituent General Assembly of the Company, the 
financial market's approval on the listing of the Company's shares and the date of  
Federal Decree Law No. (32) of 2021 on Commercial Companies  59 
       commencement of trading on the Company's shares in the financial market.  
2. Unless the AOA of the Company stipulates a higher percentage, the quorum of the 
Constituent General Assembly shall require the attendance of shareholders holding in 
person or by proxy at least [50%] of the capital of the Company. If the quorum is not reached, the meeting shall be postponed for a period between five [5] days and fifteen 
[15] days of the date of the first meeting. The postponed meeting shall be valid 
irrespective of the number of shareholders present.  
3. The meeting shall be chaired by whoever is elected by the Constituent General Assembly 
for such purpose from among the founders.  
4. Resolutions of the Constituent General Assembly shall be passed by a majority of 
shareholders holding at least three quarters of the shares represented at the meeting.

Article (132 )  
Competences of the Constituent General Assembly  
The Constituent General Assembly shall, in particular, consider and decide on the following 
issues:  
1. The founders' report on the procedures and costs of incorporating the Company.  
2. Company -related actions of the founders during the incorporation period.  
3. Approving the incorporation of the Company.  
4. Appointing the first board of directors if not already appointed by the founders.  
5. Appointing the auditors if not already appointed by the founders.  
6. Appointing the members of Internal Sharia Supervisory Committee and the Sharia Controller if the Company is carrying on its business in compliance with the rules of 
Islamic Sharia, if not already appointed by the founders.

Article (133 )  
Application for Incorporation Certificate  
The board of directors of the Company shall, within 10 [ten] business days of the meeting 
date of the Constituent General Assembly, submit an application to the SCA to have a  
Federal Decree Law No. (32) of 2021 on Commercial Companies  60 
       certificate of incorporation issued for the company. The application shall be accompanied by 
the following items:  
1. A report by the entity that audited the subscription accounts.  
2. A declaration by the Founders Committee confirming that the capital has been fully subscribed, and indicating the amounts paid by the subscribers from the value of the 
shares, the names and nationalities of the subscribers and the number of shares 
subscribed for by each subscriber.  
3. A bank certificate confirming that the paid -up capital of the Company has been 
deposited.  
4. A statement showing the names of the Directors of the Company and a declaration by 
them confirming that their membership does not conflict with the provisions of this 
Decree Law and the resolutions issued in implementation hereof.  
5. A statement showing the names of members of the Internal Sharia Supervisory Committee and the Sharia Controller, if the Company is conducting its business in compliance with the rules of Islamic Sharia.  
6. Minutes of meeting of the Constituent General Assembly.  
7. Any other documents required by the SCA.

Article (134 )  
Issuance of Incorporation Certificate  
Once the documents listed in Article [133] of this Decree Law are completed, the SCA shall 
issue a certificate of incorporation of the Company within five [5] business days of the date 
of filing a complete application by the board of directors of the Company.

Article (135 )  
Registration of the Company with the Competent Authority  
1. The board of directors of the Company shall, within 10 [ten] business days of the date of 
issuance of an incorporation certificate by the SCA, commence the process of registering the Company with the Competent Authority.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  61 
       2. The Competent Authority shall record the Company in the commercial register and shall 
issue a business license for the Company within five [5] business days of the date of 
completion of the documents and payment of the prescribed fees, and shall provide the 
SCA with a copy of the business license.

Article (136 )  
Notice to The Registrar  
The chairman of the Company's board of directors shall, within five [5] business days of the date of issuance by the Competent Authority of the company's business license, furnish to 
the Registrar the certificate of incorporation, MOA, AOA and business license of the 
company, in order to have the company recorded in the companies register, and shall 
publish such documents at the Company's expense according to the controls laid down by 
the Minister in this respect.

Article (137 )  
Listing the Company's Shares on the Financial Market  
1. The board of directors of the Company that offers its shares at a public offering shall, 
within fifteen [15] business days of the date of recording the company in the commercial 
register with the Competent Authority, list the Company's shares on a financial market 
licensed in the State according to the applicable listing rules and regulations of the SCA 
and the financial market on which the Company's shares are to be listed.  
2. Companies listed on a financial market in the State shall comply with the laws and 
regulations of the financial market.

Article (138 )  
Acts of the Founders  
Once the Company is recorded in the commercial register with the Competent Authority, the 
effects of all acts performed by the founders for the Company's for the latter's benefit prior  
Federal Decree Law No. (32) of 2021 on Commercial Companies  62 
       to its registration, shall be transferred to the Company. The Company shall bear all the 
expenses incurred by the founders in this respect.

Article (139 )  
Amendment of MOA or AOA  
Subject to the provisions of this Decree Law, the company may, subject to prior consent of 
the SCA, issue a special resolution to amend its MOA or AOA. The company shall provide 
the Competent Authority with a copy of this resolution.

Article (140 ) 
Access to Information and Data 
1. The Company shall provide on its website a copy of its MOA, AOA and any documents or 
other information as determined by the SCA. 2. The Company shall send a copy of its 
MOA and AOA to any shareholder who so requests, at the latter's expense.

Article (141 )  
Shareholder Register and Company Records  
1. Each Company shall keep a register of its shareholders in accordance with the guidelines 
laid down by the SCA.  
2. The SCA may review the shareholder register and the books, documents and records of 
the Company.

Article (142 )  
Purchase of Assets during the First Fiscal Year 
If, prior to the General Assembly's approval of the company's accounts for the first fiscal year, the Company purchases assets, companies or corporate bodies for an amount in excess 
of [20%] of its capital, the board of directors shall notify the SCA of the same. The SCA may 
subject such assets, companies or corporate bodies to valuation in accordance with the 
provisions of this Decree Law.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  63 
       Chapter Two  
Management of the Public Joint Stock Company

Article (143 )  
Formation of the Board of Directors  
1. The management of the Company shall be undertaken by a board of directors. The AOA 
of the Company shall regulate the formation of the board of directors, the number of 
directors and their term of office, provided that their number is odd not less than 3 and 
not exceeding 11, and their term of office may not exceed 3 calendar years starting from 
the date of election or appointment. Directors may be re -elected for consecutive terms.  
2. The board of directors shall elect, from among its members, by secret ballot a chairman 
and a deputy chairman who shall act on behalf of the chairman if the latter is absent or has any situation impeding the performance of his duties. A Managing Director may be 
elected for the Company. The Managing Director may not be the CEO or Director 
General of any other Company.  
3. The board of directors shall notify the SCA of the resolutions electing the chairman, the 
deputy chairman and the managing Director. The Central Bank's approval of such resolutions shall be obtained if the Company is licensed by the Central Bank.  
4. The Company shall appoint a secretary for the board of directors. The secretary shall not 
be a Director.  
5. The board of directors of the SCA shall issue a resolution setting out the conditions and 
guidelines which the companies are required to abide by for appointing the board of directors and nominating the Directors. The Central Bank shall issue an appropriate 
decision in this respect if the Company is licensed thereby.

Article (144 )  
Electing the Directors  
1. Subject to the provisions of Article [143] of this Decree Law, the General Assembly shall 
elect the directors by way of cumulative secret voting. Notwithstanding this, it shall be permissible for the founders to appoint the members of the first board of directors under  
Federal Decree Law No. (32) of 2021 on Commercial Companies  64 
       the company's AOA.  
2. Cumulative voting shall mean that each shareholder is entitled to a number of votes 
equivalent to the number of the shares held by him, so that he may either cast all votes 
in favor of one candidate for the membership of the board or distribute the votes among the nominated candidates, provided that the number of votes granted to the candidates 
does not exceed the number of votes to which the shareholder is entitled.  
3. Subject to the provisions of this Decree Law and the company's AOA, directors may be 
persons with expertise other than the shareholders.  
4. Every company shall keep a register of the members and the secretary of the board of 
directors at its headquarters. The SCA shall determine the details to be included in such register.  
5. The register of members and secretary of the board of directors of the company referred 
to in Clause [3] of this Article shall be made available for review by any shareholder or 
director of the company, free of charge during the working hours, subject to any reasonable restrictions as may be imposed by the company under the AOA.

Article (145 )  
Vacant Position of Director  
1. If the position of any Director becomes vacant, the board of directors shall, subject to the 
provisions of Article [143] of this Decree Law, appoint a new Director to fill in the 
vacancy within thirty [30] days, provided that such appointment is referred to the 
General Assembly at its first meeting for approval of the appointment or the 
appointment of a substitute Director. The new Director shall complete the term of office 
of his predecessor. If no new director is appointed to fill in the vacant position within 
such time limit, the board shall invite candidates to fill in the vacant position at the first 
General Assembly meeting, and the new director shall complete the term of office of his 
predecessor.  
2. If the number of vacancies reaches one fourth of the numbe r of Directors, the remaining 
Directors shall call the General Assembly to convene within thirty [30] days of the date  
Federal Decree Law No. (32) of 2021 on Commercial Companies  65 
       of the last vacancy, in order to elect new Directors to fill in such vacancies.

Article (146 )  
Voting Mechanism for Directors Election  
Each shareholder of the Company shall be entitled to a number of votes equal to the number 
of shares he holds. The SCA shall issue a resolution determining the voting mechanism to be 
used at the general assemblies for the election of Directors.

Article (147 ) 
Nomination of Directors  
No person may be appointed or elected as a Director of the Company unless and until such 
a person declares in writing his acceptance of the nomination. The declaration shall state 
any activity that competes with the business of the Company and is conducted directly or indirectly by the nominee, together with the names of the companies and establishments in 
which such person works or holds the position of a Director.

Article (148 )  
Government's Representation in the Board of Directors  
Notwithstanding the provisions of Article [143] hereof, the Federal or Local Government 
may, if it holds [5%] or more of the capital of the Company, appoint representatives in the 
board of directors at the same ratio of the number of directors, or at least one Director if the 
ratio required to appoint the Director exceeds the above -mentioned ratio. The Government 
shall waive its voting rights for the ratio of directors in respect of which the appointment is 
made. If the Government holds any remaining ratio that does not make it eligible for appointing any other Director, the Government may use such ratio for voting.  
  
 
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  66

Article (149 )  
Membership of the Boards of Directors of Several Joint Stock Companies  
1. No person, in his personal capacity or in his capacity as the representative of a legal 
person, may serve as a Director of more than five joint stock companies headquartered 
in the State, or a chairman or deputy chairman of more than two companies 
headquartered in the State, nor be a Managing Director of more than one Company 
headquartered in the State.  
2. The position of any Director who violates the provisions of Clause [1] of this Article shall 
be null and void in respect of the boards of directors of companies exceeding the legal 
limit, taking into consideration the recent appointment. A Director whose position is invalidated shall pay back all amounts received from the Company.

Article (150 )  
Director's Duty to Disclose Conflict of Interest  
1. Every Director of the Company, who may have a common interest or a conflicting interest 
in respect of any transaction that is submitted to the board of directors for approval, shall 
notify the board of directors of such interest and his declaration shall be recorded in the 
minutes of the meeting. Such Director may not vote on any resolution concerning such 
transaction.  
2. If a Director fails to notify the board in accordance with the provisions of Clause [1] of this 
Article, the Company or any of its shareholders may apply to the competent court to 
invalidate the contract of the underlying transaction or to require the violating Director to pay back to the Company any profit or benefit earned as a result of such contract.

Article (151 )  
Nationality of Directors  
Subject to the provision of Article [10] of this Decree Law, any requirements laid down by the Cabinet or Competent Authority shall be observed on the formation of the board of 
directors. If the ratio of UAE nationals in the board of directors falls below the limit set forth  
Federal Decree Law No. (32) of 2021 on Commercial Companies  67 
       in such Article, the deficit shall be rectified not later than three months. Otherwise, the 
resolutions of the board of directors shall be null and void.

Article (152 )  
Prohibited Acts of Related Parties  
1. Related parties shall be prohibited from taking advantage of any information that comes 
to their possession by virtue of their membership or position in the company for the sake 
of achieving any personal interest for themselves or for third parties, as a result of 
dealing in the securities of the company and any other transactions. In addition, it shall not be permitted for any of these parties to knowingly have any direct or indirect interest 
with any entity that carries out transactions intended to influence the rates of the 
securities issued by the company.  
2. The company may not enter into any deals with a related party for a value not exceeding 
[5%] of its capital without the prior consent of the board of directors. In addition, 
approval of the company's General Assembly shall be deemed a prerequisite for any 
value in excess of such percentage after the deals have been valuated in accordance with 
the controls and conditions laid down a resolution of the SCA.  
3. It shall not be permitted for a director – without the consent of the General Assembly of 
the company [to be renewed every year] – to participate in any business which is in 
competition with the company, or to trade for their own benefit or for the benefit of 
third parties in any branch of the activity conducted by the company. In addition, it shall 
not be permitted for a board member to disclose any information or data related to the 
company, otherwise the company may demand compensation or the resulting profits 
the member has earned as a result.  
4. Prior to entering into any deal with the company, the related party is required to disclose 
to the board of directors the nature and terms of the deal and all essential information 
concerning their stake or contribution to the two companies involved in the deal, and 
the extent of their relevant interest or benefit.  
5. When the Company enters into deals with the related parties, the Chairman of the board  
Federal Decree Law No. (32) of 2021 on Commercial Companies  68 
       of directors of the company shall furnish to the SCA a statement containing the 
information about the related party, details of the deal, and the nature and extent of the 
related party's potential benefit from the deal, in addition to any further data, 
information or documents requested by the SCA, along with a written confirmation by the related party acknowledging that the terms of the deal are fair, reasonable and in 
favor of the company's shareholders.  
6. The related parties, transactions associated with the interest conflict, duties of the party 
relevant to the company, as well as the deals, shall be defined according to the 
resolutions and regulations to be issued by the SCA.

Article (153 )  
Prohibition of Loans to Directors  
1. Except for the financial institutions that are subject to the control and supervision of the 
Central Bank, it shall not be permitted for a joint stock company to provide any loans to any of its directors, nor to enter into guarantees or provide any collaterals in connection 
with any loans granted to them. Any loan granted to the director's spouse, children or 
relatives up to the second degree shall be deemed a loan granted in accordance with the 
provisions of this Decree Law.  
2. No loan may be granted to a company in case any of its directors or his spouse, children or 
relative up to the second degree holds over 20% of its capital.  
3. Any agreement that conflicts with the provisions of this Article shall be null and void. The 
auditor shall refer, in their report submitted to the General Assembly of the company, to 
such loans and credits granted to the directors and the extent to which the company 
complies with the provisions of this Article.

Article (154 )  
Powers of the Board of Directors  
The board of directors shall have all the powers specified in the AOA of the Company except 
those powers exclusively conferred upon the General Assembly under this Decree Law or  
Federal Decree Law No. (32) of 2021 on Commercial Companies  69 
       the AOA of the Company. However, the board of directors may not enter into loan 
agreements for terms exceeding three years, sell the Company's property or business 
premises, mortgage the movable and immovable property of the Company, discharge 
debtors of the Company from their obligations, enter into amicable conciliation or agree on arbitration, unless such acts are authorized under the AOA of the Company or fall within the 
objects of the Company by nature. Other than those two cases, such acts shall require a 
Special Resolution of the General Assembly.

Article (155 )  
Representation of the Company  
1. The chairman shall legally represent the Company before the courts and in respect of its 
relationships with third parties, unless the AOA of the Company provides that its 
Director General shall act as its representative before the courts and on its relationships 
with third parties.  
2. The chairman may delegate any of his powers to any Director.  
3. The board of directors may not confer upon the chairman an absolute delegation of its 
responsibilities.

Article (156 )  
Board Meetings  
1. The board of directors shall meet at least four [4] times a year at a call by the chairman, 
unless the AOA of the Company provides for more meetings, in accordance with the 
procedures specified in the AOA. However, the chairman shall call the board of directors 
to upon the request of at least two directors, unless the AOA of the Company provides otherwise.  
2. Meetings of the board of directors shall be held at the headquarters of the Company, 
unless the board resolves otherwise. Board meetings shall be valid only if all the 
Directors are called to the meeting and the majority of the Directors are present in 
person, unless the AOA of the Company permits attendance through means of modern  
Federal Decree Law No. (32) of 2021 on Commercial Companies  70 
       technology approved by the SCA.

Article (157 )  
Board Resolutions  
1. Board resolutions shall be passed by a majority of votes; in the event of equal votes, the 
chairman shall have the casting vote.  
2. Notwithstanding the provision of Article [156.2] of this Decree Law, the board of directors 
may pass any resolutions by way of circulation, in accordance with the conditions and 
procedures to be established under a decision of the SCA.

Article (158 )  
Director's Absence  
If any Director fails to attend three [3] consecutive or five [5] intermittent board meetings 
during the term of office of the board of directors, without an excuse acceptable to the 
board, such Director shall be deemed to have resigned.

Article (159 )  
Minutes of Board Meetings  
The secretary of the board of directors shall prepare the minutes of meetings, which shall be signed by the secretary himself together with the directors attending the meeting. The 
Director who opposes any resolution passed by the board may record his opposing opinion 
in the minutes of the meeting. The signatories to such minutes shall assume responsibility for the accuracy of the details contained therein. The SCA shall lay down the applicable 
guidelines in this respect.

Article (160 )  
Appointment of Director as Proxy at Board Meetings  
1. The Director may not appoint any other Director as his proxy to attend a board meeting  
Federal Decree Law No. (32) of 2021 on Commercial Companies  71 
       unless so permitted by the AOA of the Company. Each Director may act as a proxy for 
only one Director, but at least 50% of the Directors shall be present in person.  
2. No voting may take place by correspondence. The Director acting as a proxy shall vote on 
behalf of the absent Director as determined in the deed of proxy.

Article (161 )  
Liability of the Company for Acts of Board of Directors  
The Company shall be bound by the acts duly carried out by the board of directors and shall be liable for any damage caused by the unlawful acts of the chairman and directors of the 
Company.

Article (162 )  
Liability of Board of Directors and Executive Management  
1. The directors and executive management officer shall be liable vis -à-vis the company, 
shareholders and third parties for all acts of fraud, abuse of power and violation of the provisions of this Decree Law and the AOA of the company. Every condition to the 
contrary shall be null and void. The executive management shall be represented by the 
Director General, Managing Director or CEO of the company, their deputies, everyone in 
senior executive positions, executive management officers and those employees 
appointed personally by the board of directors.  
2. The scope of liability provided for in Clause [1] of this Article shall apply to all directors if 
the error in question arises from a resolution passed unanimously by them. However, if 
the resolution in question is passed by majority, the members who oppose this 
resolution shall not be held liable, provided they express their opposition in writing in the minutes of the meeting. If a member fails to attend the meeting at which the 
resolution is passed, they shall not be relieved of the liability unless it is proven that the 
absent member either is not aware of the resolution or is aware of it but unable to object 
thereto. The liability cited in Clause [1] of this Article shall fall upon the executive 
management if the error in question arises from a resolution passed by it.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  72 
       3. Wi thout prejudice to any penalty stipulated in this Decree Law or any other law, any 
chairman or a director of the company or of its executive management shall be deemed 
dismissed from their position by force of law if a final judgement is issued establishing 
that they have committed any act of fraud or abuse of power or if they have entered into transactions or deals involving conflict of interest and in violation of the provisions of 
this Decree Law or its implementing resolutions. Such a person shall not be accepted to 
run as a candidate for membership of a board of directors of any joint stock company in 
the State, nor to undertake any executive management duties for the company until at 
least three years have passed of the date of their dismissal. The provisions of Article 
[145] of this Decree Law on occupying the new membership position in the company's 
board of directors shall apply. If all members of the company's board of directors are 
dismissed, the SCA shall convoke the General Assembly to elect a new board of directors.

Article (163 )  
Acts of Directors  
The Company shall be bound by the acts of any of its Director vis -à-vis bona fide third 
parties, even if it subsequently appears that his election or appointment has been invalid or 
that the applicable conditions for such election or appointment are not satisfied.

Article (164 )  
Acts Detrimental to the Company's Interests  
1. If one or more shareholders holding at least [5%] of the shares of the Company are 
convinced that the affairs of the Company are being or have been conducted to the detriment of the interests of all or any of the shareholders, or that the Company intends 
to make an act or omission that may prejudice any shareholder[s], such shareholder[s] shall have the right to submit an application to the SCA, together with supporting 
documents, to issue appropriate decisions at its own discretion.  
2. If the SCA rejects the application or the if application is not decided on within thirty [30] 
business days, the shareholder[s] shall be entitled to resort to the competent court  
Federal Decree Law No. (32) of 2021 on Commercial Companies  73 
       within ten [10] days of the date on which the application is rejected or when the time 
limit expires, as the case may be.  
3. The SCA may resort to the competent court if it is convinced that the affairs of the 
Company are being or have been conducted to the detriment of the interests of all or any of the shareholders, or that the Company intends to make an act or omission that may 
prejudice the shareholders.  
4. The competent court shall hear the case filed by the shareholder or the SCA as a matter of 
urgency in the two instances described in Clauses [2] and [3] of this Article. The court 
may appoint one or more experts to provide a report on one or more aspects of 
management. The court may issue a judgment invalidating the act or omission in 
question or requiring the Company to resume any act which the Company has ceased to 
perform.

Article (165 )  
Lawsuit by the Company against Board of Directors  
The Company may file a liability lawsuit against its board of directors on the grounds of its 
errors that may result in damage to all the shareholders, under a resolution to be adopted by 
the General Assembly for nominating a representative of the Company to institute the 
lawsuit in the name of the Company.

Article (166 )  
Shareholder's Lawsuits 
1. Any shareholder may file with the c ompetent court a lawsuit against the company and its 
board of directors and executive management, if any damage is inflicted upon the 
shareholder as the result of an act by the company or its board or executive 
management in violation of the provisions of this Decree Law.  
2. The shareholder shall have the right to recover from the company all the legal expenses 
actually incurred as judicial and attorney fees for the lawsuit, in the event that a final and 
conclusive judgement is issued on the lawsuit, whether the judgement issued by the  
Federal Decree Law No. (32) of 2021 on Commercial Companies  74 
       competent court is in favor of or against the shareholder [Plaintiff], subject to the 
following requirements:  
a. Submission of the documents supporting such legal expenses.  
b. The lawsuit of the shareholder [the plaintiff] is not based on malicious grounds aimed at inflicting harm upon, defaming or blackmailing the defendant or the 
company and its shareholders, or affecting the share price in the financial market.

Article (167 )  
Lawsuit against the Related Party  
1. Any single shareholder, or all shareholders acting collectively, may file a lawsuit with the 
competent court under their name and on behalf of the company against any related 
party of the company for the damage incurred by the company as a result of the related 
party's breach of duties vis -à-vis the company according to this Decree Law or any other 
law. For this purpose, the following requirements shall be satisfied:  
a. That the damage or violation to duty has been caused to the company;  
b. That the plaintiff is a shareholder of the company at the time when the acts involved 
in the lawsuit have been committed, or has acquired such capacity as a result of the 
transfer the interest or shares of such a person from a person who has had such 
capacity at that time.  
c. That the plaintiff or plaintiffs collectively have shares which represent at least 10% of 
the company's capital.  
d. That the plaintiff has earlier submitted to the board of directors of the company a 
written application for filing the lawsuit and stating its grounds, but such application 
has either been rejected or not responded to by the board within thirty [30] days.  
e. That the lawsuit documents include a copy of the application referred to in the previous paragraph of this Article, and details of all other efforts made to urge the 
company to file the complaint by itself.  
2. Subject to the provisions of Clause [1] of this Article, the plaintiff or plaintiffs may not 
enter into amicable conciliation or settlement with the defendant in such case without  
Federal Decree Law No. (32) of 2021 on Commercial Companies  75 
       the approval of the court following the full disclosure of the details of the proposed 
conciliation or settlement.  
3. If a judgement is issued in favor of the plaintiff or plaintiffs according to the provisions of 
this Article, the ownership of amounts ordered by the court to be refunded and the compensation for damage shall be conferred upon the company, with the exception of 
the legal expenses and attorney fees which shall be paid back to the plaintiff or plaintiffs 
who had actually paid them. The competent court shall approve the value of such legal expenses if it is convinced that the lawsuit is based on malicious grounds with the aim of 
inflicting damage upon the defendant, the company and its shareholders, or of defaming 
or affecting the price of the share in the financial market.

Article (168 )  
Direct Legal Proceedings  
Any single shareholder, or all shareholders acting collectively, may file a lawsuit with the competent court under their name against any related party of the company on the grounds 
of the damage caused to them as a result of any breach of the provisions of this Decree Law 
or any other law.

Article (169 )  
Lapse of Liability Lawsuit  
Any resolution passed by the Gene ral Assembly to discharge the board of directors from 
liability shall not give rise to lapse of the liability lawsuit against the Directors due to the 
errors committed by them in the course of performing their duties. If the act giving rise to 
liability has been presented to and approved by a General Assembly, the liability lawsuit shall lapse upon the expiry of one year of the date of such General Assembly Meeting. 
However, if the act ascribed to the Directors is a criminal offence, the lawsuit shall only lapse 
when the criminal case lapses.  
  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  76

Article (170 )  
Removal of Directors  
1. The General Assembl y may remove all or any of the Directors, even if the AOA of the 
Company provides otherwise. In such case, new Directors shall be elected instead of the 
directors so removed, subject to the provisions of Articles [143 and 144] of this Decree 
Law. The SCA and the Competent Authority shall be notified of such election.  
2. If a Director is removed, he shall not be eligible for re -nomination to the board before the 
lapse of three [3] years of the date of the resolution approving his removal.

Article (171 ) 
Remuneration of Directors  
1. The AOA shall determine the way in which the remuneration of Directors is to be 
calculated, provided that it does not exceed [10 %] of the net profit for the fiscal year 
then ended, after the deduction of depreciation and reserves.  
2. Notwithstanding clause [1] of this Article, and subject to the controls to be issued by the 
SCA in this regard, any director may be paid a lump sum remuneration not exceeding [AED 200,000] two hundred thousand dirhams at the end of the fiscal year, provided 
that the Company's AOA so permits and that the General Assembly has approved the 
payment of such remuneration in the following cases:  
a. If the company fails to make any profit;  
b. If the company makes a profit and the director's share of those profits is less than 
[AED 200,000] two hundred thousand dirhams, in which case, the remuneration and 
fees may not both be paid to a single director.  
3. The fines imposed on the Company due to violations by the board of directors of the 
Law or the AOA of the Company during the fiscal year ended shall be deducted from the 
remunerations of the board of directors. The General Assembly may decide to not 
deduct such fines if it is convinced that they are not due to any negligence or error on the part of the board of directors.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  77

Article (172 ) 
Invalidity of Resolutions  
1. Without prejudice to the rights of bona fide third parties, any resolution issued in violation 
of the provisions of this Decree Law or the MOA or AOA of the Company or for or 
against a certain class of shareholders or to bring a special benefit to the Related Parties 
or Third Parties without consideration of the interests of the Company shall be invalid.  
2. The judgment establishing such invalidity shall render the resolution void ab initio in 
respect of all the shareholders.  
3. The board of directors shall publish the judgment in two daily local newspapers; at least 
one of which is published in Arabic.  
4. The invalidity lawsuit shall be time barred after the passage of sixty [60] days of the 
issuance date of the contested resolution. Filing the lawsuit shall not give rise to stay of execution of the resolution in question, unless the competent court orders otherwise.  
  
Chapter Three   
General Assemblies of Public Joint Stock Company

Article (173 )  
Convening the General Assembly  
1. The General Assembly of shareholders shall convene, subject to prior approval of the SCA, 
at the call of the board of directors at least once a year, within the four [4] months 
following the end of the fiscal year, at such time and venue as determined in the notice 
of meeting. The board may call the General Assembly to convene as necessary.  
2. If the board of directors fails to send a call for General Assembly meeting under the 
circumstances where this is required hereunder, the auditor shall send out such a call. 
This shall also apply whenever necessary. In this case, the auditor shall prepare and 
publish the agenda.  
  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  78

Article (174 )  
Notice of General Assembly Meeting  
1. Except for the meeting of the General Assembly being postponed due to the lack of 
quorum, in accordance with the provisions of Article [185] of this Decree Law, the call to 
General Assembly Meeting shall be served based upon the approval of the SCA to all 
shareholders according to the controls and conditions to be included in a resolution of 
the SCA, subject to the following:  
a. The notice of General Assembly  Meeting shall be sent at least twenty -one [21] days 
prior to the scheduled date of meeting.  
b. The notice of meeting shall be sent in accordance with the notification method 
issued by a resolution of the SCA.  
c. The shareholders shall be notified by registered letter or through the modern means 
of technology as stipulated in the AOA of the company.  
d. The company shall serve upon both the SCA and the Competent Authority a copy of 
the notice of meeting on the date of the notification of the call for meeting.  
2. The notice of meeting shall include the agenda, venue, date and time of the first meeting 
and the second meeting [in the event of the lack of quorum for the first meeting]. In addition, it shall also indicate the persons eligible to attend the General Assembly and 
their right to delegate whoever they select from outside the directors under a special 
written power of attorney as determined by the SCA in this regard, the shareholder's 
eligibility to discuss the matters listed in the General Assembly's agenda, and to pose questions to the board of directors, the auditor, the quorum required for the meetings of 
the General Assembly and the resolutions issued thereat. It shall also indicate the names 
of persons eligible to the receive dividends, if any.  
3. It shall be permissible for meetings of the General Assembly to be held and for the 
shareholder to participate in their deliberations and vote on their resolutions through 
modern means of technology of telepresence according to the controls set forth by the 
SCA in this regard.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  79

Article (175 )  
Valid Notice to Shareholders  
If the notice of meeting of the General Assembly is sent prior to the date of the meeting 
within a period less than the period specified in Article [174] of this Decree Law, then the 
notice to General Assembly Meeting shall be valid if approved by shareholders representing 
[95%] of the capital of the Company.

Article (176 )  
Shareholders' Request to Call the General Assembly Meeting  
1. The board of directors of the company shall call the General Assembly to convene 
whenever one or more shareholders holding shares that represent at least [10%] of the company's shares requests so, so that the call to General Assembly is sent within five [5] days of the date of the request. The General Assembly shall convene within thirty [30] 
days of the date of call for the meeting.  
2. The request referred to in Clause [1] of this Article shall be submitted to the headquarters 
of the company and shall indicate the purpose of the meeting and the matters to be 
discussed. The party calling for the meeting shall provide a certificate from the financial market on which the shares of the company are listed, indicating that the disposition of 
its own shares is prohibited upon its request until the meeting of the General Assembly is 
held.

Article (177 )  
General Assembly Meeting Convoked by Auditor  
1 .The board of directors shall call the General Assembly to convene upon the request of the 
auditor. If the board fails to send out a notice of meeting within five [5] days of the date 
of the request, the auditor shall send it out.  
2 .The General Assembly shall convene not less than fifteen [15] days and not more than 
thirty [30] days of the date of the notice of the meeting.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  80

Article (178 )  
General Assembly Meeting Convoked by SCA  
1. The SCA may instruct the c hairman of the board of directors of the company or his 
representative to call a General Assembly Meeting in any of the following cases:  
a. Upon the expiry of thirty days of the date described in Article [173] of this Decree 
Law without the General Assembly being called to convene.  
b. If the number of directors goes below the minimum limit required for the board 
meeting to be valid.  
c. If the SCA is convinced, at any point of time, of the occurrence of any violations of 
the Law or of the company's AOA, or that there is any defects in the company's management.  
d. If the board of directors of the company fails to respond to the request of the 
shareholder [s] in accordance with the provision of Article [176] of this Decree Law.  
2. If the chairman of the board of directors of the company, or the person acting in lieu of 
him, fails to call the General Assembly Meeting in any of the above cases within five [5] 
days of the date of the SCA's request, the SCA shall call the meeting at the expense of the 
company.

Article (179 )  
Competences of Annual General Assembly  
In particular, the annual General Assembly of the Company shall consider and decide on the 
following issues:  
1. Consideration and approval of the board of directors' report on the activities and financial position of the Company during the year and the auditor's report and, if the 
Company conducts its activity in compliance with the rules of Islamic Sharia, the report 
of the Internal Sharia Supervisory Committee;  
2. The balance sheet and profit and loss account;  
3. The election of Directors if necessary;  
4. The appointment of members of the Internal Sharia Supervisory Committee if the  
Federal Decree Law No. (32) of 2021 on Commercial Companies  81 
       Company conducts its activity in compliance with the rules of Islamic Sharia;  
5. The appointment and remuneration of auditors;  
6. Consideration of proposals by the board of directors for the distribution of profits, 
whether in cash or as bonus shares;  
7. Consideration of proposals by the board of directors for the remuneration of the 
Directors and the determination of their remuneration;  
8. Exonerating or dismissing Directors and filing liability lawsuits against them, as the case 
may be; and  
9. Exonerating or dismissing auditors and filing liability lawsuits against them, as the case may be.

Article (180 )  
Right to Attend the General Assembly  
1. Every shareholder shall have the right to attend the General Assembly and shall have a 
number of votes equal to his number of shares. Any shareholder that has the right to 
attend the General Assembly may appoint a proxy other than a Director, under a special 
written proxy. A proxy holder acting on behalf of several shareholders shall not hold in 
this capacity over 5% of the share capital of the Company. Shareholders who are minors 
or legally incompetent shall be represented by their legal representatives.  
2. The legal person may appoint any of its representatives or those in charge of its 
management under a resolution to be passed by its board of directors or any similar 
entity to represent it at any General Assembly of the Company. The proxy shall have the 
powers defined in the proxy resolution.

Article (181 )  
Supervision of General Assembly Meetings  
1. The SCA and the Competent Authority may send one or more controllers on their behalf 
to attend meetings of the General Assembly of companies without having the right to vote. The presence of such controllers shall be recorded in the minutes of meeting of the  
Federal Decree Law No. (32) of 2021 on Commercial Companies  82 
       General Assembly.  
2. The Central Bank or the Insurance Authority may send one or more controllers to attend 
meetings of the General Assembly of companies licensed by the Central Bank or the 
Insurance Authority, without having the right to vote. The presence of such controllers shall be stated in the minutes of meeting of the General Assembly.

Article (182 )  
Powers of the General Assembly  
1. Subject to the provisions of this Decree Law and the resolutions issued in implementation 
hereof and the AOA of the company, the General Assembly shall be competent to 
consider all the issues in connection with the company. The General Assembly is not 
permitted to consider matters other than those listed in the agenda.  
2. Notwithstanding the provisions of Clause [1] of this Article, the General Assembly shall 
have the right to consider the serious incidents revealed during the meeting. If the SCA or 
a shareholder or a number of shareholders holding at least 5% of the share capital of the 
company request, before commencing the discussion of the General Assembly's agenda, 
to list an additional item or items in the agenda, the chairman of the meeting shall list 
such item or items. The SCA will issue a resolution determining the conditions to be 
observed for listing a new item on the General Assembly's agenda.

Article (183 )  
Record of General Assembly Meetings  
The shareholders shall record their names for the attendance of the meeting of the company's General Assembly in accordance with the controls, terms and procedures to be 
issued by a resolution of the SCA in this regard.  
  
 
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  83

Article (184 )  
Chairmanship of the General Assembly  
The chairman of the board of directors of the company or, in his absence, the deputy 
chairman or, if both the chairman and the deputy chairman are absent, any director so 
selected, shall assume chairmanship of the General Assembly. If the board of directors fails 
to select a member to chair it, it shall be chaired by any person selected by the General 
Assembly. The General Assembly shall also appoint a secretary for the meeting. If the 
General Assembly discusses a matter related to the chairman of the meeting, the General 
Assembly shall select from the shareholders a chairman for the meeting during the 
discussion of this issue.

Article (185 )  
Quorum for General Assembly Meetings  
Unless the AOA states a higher percentage, the quorum for meetings of the General 
Assembly shall be fulfilled if the shareholders holding or representing by proxy at least 50% 
of the share capital of the Company are present at the meeting. If a quorum is not present at 
the first meeting, the General Assembly shall be postponed to another future date at least 
five [5] days, but not more than fifteen [15] days after the date of the first meeting. The 
quorum for the postponed meeting shall be fulfilled irrespective of the number of 
shareholders present.

Article (186 )  
Withdrawal from the Meeting of the General Assembly  
If any of the shareholders or their representatives withdraws from the meeting of the 
General Assembly after the quorum has been fulfilled, such withdrawal shall not affect the 
validity of the General Assembly, provided that the resolutions shall be passed by the 
majority described in this Decree Law for the remaining shares represented at the meeting.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  84

Article (187 )  
Discussion of the General Assembly's agenda  
1. Every shareholder attending the General Assembly shall be entitled to discuss the matters 
listed on the General Assembly's agenda and to address questions to the Directors and 
the auditor. The Directors and the auditor shall reply to the questions to the extent that 
the interests of the Company are not compromised.  
2. A shareholder may resort to the General Assembly if the shareholder feels that the answer 
to his question is unsatisfactory. The General Assembly's decision shall be enforceable 
and every provision in the AOA of the Company to the contrary shall be invalid.

Article (188 ) 
Voting on General Assembly's Resolutions  
1. Subject to the provision of Article [146] of this Decree Law, voting on the General 
Assembly's resolutions shall be conducted via the method as determined by the AOA of the company. However, voting shall be secret if related to the election, dismissal or 
accountability of the directors. It shall be permissible for voting on meetings of the 
General Assembly to be conducted using the online voting mechanism, provided that the 
controls and terms issued by the SCA in this regard are adhered to.  
2. Subject to the provision of Article [180] of this Decree Law, it shall not be permitted for 
directors to participate in voting on resolutions of the General Assembly related to being 
discharged from the liability for their management, or in connection with a special 
benefit for them, or resolutions that are related to a conflict of interests or an existing 
dispute between them and the company.

Article (189 )  
Minutes of General Assembly Meeting  
1. Minutes shall be drafted for all meetings of the General Assembly. The minutes of every 
meeting shall include the names of the shareholders present in person or by proxy, the number of shares held by them in person or by proxy, the number of votes per share, the  
Federal Decree Law No. (32) of 2021 on Commercial Companies  85 
       resolutions passed, the number of votes for or against such resolutions, and an adequate 
summary of the deliberations of the meeting.  
2. Minutes of General Assembly meetings shall be duly recorded after each meeting in a 
special register, to be kept in accordance with the guidelines laid down in a resolution of the SCA. The minutes shall be signed by the chairman and the secretary of the meeting, 
the vote counter and the auditor. The persons who sign the minutes of meeting shall be 
responsible for the accuracy of their contents.

Article (190 )  
Resolutions of General Assembly  
1. Resolutions of  the General Assembly shall be passed by a majority vote of the shares 
represented at the meeting, or such higher majority as specified by the AOA of the 
Company.  
2. Resolutions passed by the General Assembly in accordance with the provisions of this 
Decree Law and the AOA of the Company shall be binding on all the shareholders, whether present at or absent from the meeting at which the resolution is passed and 
whether they assent or dissent to the resolution in question.

Article (191 )  
Implementation of Resolutions of the General Assembly  
The chairman of the Company shall implement the resolutions of the General Assembly and 
shall send a copy thereof to the SCA, the financial market on which the shares of the 
Company are listed as well as to the Competent Authority, in accordance with the guidelines 
laid down by the SCA.

Article (192 )  
Review of Minutes of General Assembly Meetings  
1. The minutes of meetings of the General Assembly of shareholders shall be kept at the  
Federal Decree Law No. (32) of 2021 on Commercial Companies  86 
       headquarters of the Company. Any shareholder may review such minutes without 
consideration during ordinary working hours.  
2. If the Company rejects or fails to comply with the provisions of this Article, the SCA may 
issue an order to scrutinize the contents of the minutes on the deliberations of the General Assembly. The SCA may also issue an order instructing the Company to deliver 
the required copies to the person or persons who request such copies.

Article (193 )  
Suspension of General Assembly's Resolution  
1. Upon the request of shareholders holding not less than [5%] of the Company's capital, the 
SCA may issue a resolution to suspend the enforcement of resolutions passed by the 
General Assembly of the Company if they are detrimental to the shareholders, in favor of 
a certain class of the shareholders or bring a special benefit to the Directors or to Third 
Parties, whenever such request is considered well grounded.  
2. Any request to suspend the implementation of resolutions of the General Assembly shall 
not be admitted after three [3] business days of the issue date of such resolutions.  
3. The stakeholders may file a lawsuit to invalidate such resolutions with the competent 
court and shall forward a copy thereof to the SCA within five [5] days of the issuance date of the resolution suspending the enforcement of the resolutions of the General 
Assembly; otherwise, the suspension shall be void ab initio.  
4. The court shall hear the lawsuit that claims invalidity of the resolutions of the General 
Assembly, and may order, as a matter of urgency, that the enforcement of the SCA's resolution be suspended upon the request of the opponent until a decision has been 
rendered on the merits of the lawsuit.

Article (194 )  
No Election of Board of Directors or Appointment of Auditor  
1. Subject to the provisions of Article 143 of this Decree Law, if the General Assembly of the 
Company fails to pass a resolution on the election of Directors at two consecutive  
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       meetings where the quorum is fulfilled, the SCA shall refer the matter to the chairman of 
its board of directors, after consulting the Competent Authority and the entities 
responsible for supervising the Company's activities in the State, for an interim board of 
directors to be appointed for the Company for a term not exceeding one fiscal year. At the end of the fiscal year, the interim board of directors shall call the General Assembly 
of the Company to elect Directors. If the General Assembly fails to elect Directors, the 
SCA shall refer the matter to the chairman of its board of directors, after consulting the Competent Authority and the entities responsible for supervising the Company's 
activities in the State, for an appropriate resolution to be passed for, inter alia, the 
dissolution of the Company.  
2. If the General Assembly of the Company fails to pass a resolution on the appointment of 
its auditor at its annual meeting in accordance with the provisions of Articles [246] and 
[245] of this Decree Law despite the presence of a quorum, the SCA may appoint an 
auditor for the Company for one fiscal year and determine his fees.  
  
Chapter Four   
Capital of Public Joint Stock Company"

Article (195 )  
Capital of Public Joint Stock Company  
The mi nimum issued capital of a public joint stock company shall be at least thirty million 
dirhams AED [30,000,000]. This limit may be amended under a resolution by the Cabinet 
based upon the proposal of the chairman of the SCA's board of directors.

Article (196 )  
Capital Increase  
1. Subject to the provisions of this Decree Law, the shareholders are required to approve – 
under a special resolution –  the issuance of every new shares for increasing the issued 
capital.  
2. Upon satisfying its full issued capital, the company may increase its issued capital under a  
Federal Decree Law No. (32) of 2021 on Commercial Companies  88 
       special resolution. The company's board of directors shall implement such a special 
resolution within three [3] years of its issuance date; otherwise, the resolution shall be 
deemed void ab initio with regard to the amount of increase not implemented during the 
aforementioned period.  
3. The resolution increasing the issued capital shall state the amount of increase and the 
price of the new shares issued.  
4. If the increase of the issued capital of the company includes in- kind contributions, the 
provisions related to the valuation of in -kind contributions as contained in this Decree 
Law shall apply.  
5. The SCA shall issue a resolution determining the terms and controls for increasing the 
issued capital of the company.

Article (197 )  
Methods of Capital Increase  
The share capital of the Company may be increased by any of the following means:  
1. Issue of new shares;  
2. Capitalization of the reserve; or  
3. Conversion of Company -issued bonds or Sukuk into shares.

Article (198 )  
Share Premium and Share Discount  
1. Shares of capital increase of the company shall be issued at a nominal value equivalent to 
that of the original shares. However, the company may, under a special resolution and 
based upon the approval by the SCA, decide:  
a. To add the value of a share premium to the nominal value of the share and 
determine its value, if the market value exceeds the nominal value of the share, while 
the share premium shall be added to the statutory reserve, even if it exceeds half of 
the capital.  
a. Grant and a share discount on the nominal value of the share and determine its value  
Federal Decree Law No. (32) of 2021 on Commercial Companies  89 
       in the event that the market value is lower than the nominal value of the share. 
Against the share discount, a negative reserve in equity in the balance sheet shall be created and deducted from the future profits of the company before any dividends 
are approved.  
2. The Board shall be provided with a report from an independent financial adviser 
approved by the SCA, in which it determines how to calculate the share premium or 
share discount.

Article (199 )  
Rights Issue  
1. Without prejudice to the provisions of Articles [225], [226], [227], [228], [231], [285] and 
[299] of this Decree Law, the shareholders shall have priority to subscribe for newly 
issued shares. Any provision to the contrary in the company's AOA or the resolution 
increasing the issued capital shall be null and void.  
2. The shareholder may sell the rights issue to any other shareholder or to a third party 
against a financial consideration. The SCA's board of directors shall issue the resolution regulating the conditions and procedures for selling the rights issue.

Article (200 )  
Subscription For New Shares  
1. Subscriptions for newly issued shares shall be governed by the same rules of subscription 
for the original shares.  
2. The board of directors shall publish a summary of the prospectus of the shares of rights 
issue as approved by the SCA, in two local daily newspapers; one of which is published in Arabic, to give the shareholders notice of their priority to subscribe for newly issued 
shares.  
  
  
Federal Decree Law No. (32) of 2021 on Commercial Companies  90

Article (201 )  
Dist ribution of New Shares  
1. New shares shall be distributed to the shareholders applying for subscription in 
proportion to the shares held by them, provided that this proportion shall not exceed the 
new shares they have applied for.  
2. Subject to Article [199.2] hereof, the remaining shares shall be distributed to the 
shareholders who have applied for shares more than the number of shares held by them. 
Any remaining shares shall be offered for public subscription if so included in the capital 
increase resolution, subject to the requirements of the SCA.

Article (202 )  
Capitalization of the Reserve  
Under a special resolution, the reserve may be converted into capital through the issuance of 
bonus shares to be distributed to the shareholders in proportion to their respective 
shareholdings, or through an increase in the nominal value of the shares in proportion to the 
increase in share capital. This, however, may not give rise to any financial burden on the shareholders.

Article (203 )  
Conversion of Sukuk or Bonds into Shares  
The Bonds or Sukuk shall be converted into shares according to the terms of the prospectus as approved by the SCA. The approval of the Central Bank shall be obtained if the Company 
is licensed thereby.

Article (204 )  
Capital Reduction  
The Capital of the Company may not be reduced without the prior consent of the SCA and 
the issuance of a Special Resolution after hearing the report of the auditor. The Capital may  
Federal Decree Law No. (32) of 2021 on Commercial Companies  91 
       be reduced in either of the following cases:  
1. If it exceeds the needs of the Company;  
7. If the Company has incur red a loss that cannot be recouped through future profits.

Article (205 )  
Methods of Capital Reduction  
The Capital may be reduced by any of the following methods:  
1. Reducing the nominal value of the shares, through either partially refunding their value 
to the shareholders or relieving the shareholders of all or part of the outstanding share 
price owed by them;  
2. Reducing share value by writing off a part thereof equal to the loss incurred by the 
Company;  
3. Writing off a number of the shares equal to the proposed reduction; or  
4. The purchase and subsequent cancelation of a number of shares equivalent to the 
proposed reduction.

Article (206 )  
Capital Reduction Procedures  
1. Upon reducing its capital by any method according to the provisions of this Decree Law, 
the company shall adhere to the following:  
a. The controls, conditions and procedures to be issued under a resolution of the SCA.  
b. Publish the capital reduction resolution in accordance with the controls and 
procedures determined by the SCA, so that the announcement includes the amount 
of capital before and after the reduction, the value of each share and effective date of 
the reduction. The creditors  shall provide the company with the documents that 
support their debts within thirty [30] days of the publication date of the 
announcement of the capital reduction resolution.  
2. If the capital is reduced through refunding part of the nominal value of the shares to the 
shareholders or relieving them of the unpaid amount of the value of the shares or any  
Federal Decree Law No. (32) of 2021 on Commercial Companies  92 
       part thereof, such reduction may only be invoked vis -à-vis the creditors who submitted 
their claims on the date described in Clause [1/B] of this Article if such creditors have 
picked up their due debts or obtained the securities necessary for the repayment of the 
debts not yet due.

Article (207 )  
Capital Increase or Reduction Resolution  
The board of directors of the Company shall, within five [5] business days of the effective date of the resolution to increase or reduce its capital, have such resolution registered with 
the SCA, the Competent Authority and the Registrar.  
  
Chapter Five  
Shares, Bonds and Sukuk

Article (208 )  
Shares -Related Rights  
1. Unless otherwise provided for in this Decree Law, the rights attached to all shareholder 
shares shall rank pari passu and the Company may not issue different classes of shares.  
2. Notwithstan ding the provision of Clause [1] of this Article, the Cabinet may, based upon 
the proposal of the chairman of the SCA, issue a resolution specifying other classes of shares and the conditions of their issuance, the rights and obligations attached to the 
shares and the governing rules and procedures.  
3. No shareholder may claim redemption of his capital contribution.

Article (209 )  
Nominal Value of Shares  
1. Each share shall have a nominal value as specified in the AOA of the Company.  
2. Shares may be issued against the payment of at least one quarter of their nominal value, 
so that the remaining value balance thereof shall be paid not later than three [3] years of  
Federal Decree Law No. (32) of 2021 on Commercial Companies  93 
       the date on which the company is registered with the competent authority.  
3. Subject to Clause [1] of this Article, the company may, under a special resolution and 
subject to prior approval of the SCA, split the nominal value of share.

Article (210 )  
Nature of Shares  
Shares shall be of a registered type, and no bearer shares may be issued. Shares shall also be 
negotiable.

Article (211 )  
Disposition of Shares 
The method and conditions for disposition of shares shall be determined in accordance with 
the provisions of this Decree Law, the regulations and resolutions of the SCA and the AOA of 
the Company. Disposition of shares may not reduce the shareholding percentage of UAE 
nationals below the minimum limit described hereunder.

Article (212 )  
Pledge of Shares  
Shares may be pledged by being delivered to the creditor or his representative after the applicable procedures have been satisfied. The pledgee shall be entitled to pick up the 
profits and to exercise the rights attached to the share, unless otherwise agreed under the 
pledge agreement.

Article (213 )  
Transfer of Title to Listed Shares  
Title to Company's shares listed on any of the financial markets licensed in the State shall be transferred in accordance with the applicable procedures of the SCA and the financial 
market on which such shares are listed.   
Federal Decree Law No. (32) of 2021 on Commercial Companies  94

Article (214 ) 
Transfer of Title to Unlisted Shares  
1. Title to Company's shares that are not listed on the financial markets shall be transferred 
by recording the transfer in a register held by the Company, and the same shall be 
annotated on the share certificate. The transfer shall become effective vis -à-vis the 
Company and third parties only of the date of being recorded in such register.  
2. However, the Company may refrain from recording any share transfer transaction in the 
following cases:  
A. If such transfer is made in violation of the provisions of this Decree Law or its implementing resolutions or the AOA of the Company;  
B. If the shares are pledged or attached by a court order;  
C. If the share certificate has been lost and no shares have been issued by the company;  
D. If the Company has any outstanding debt on the shares, the Company may suspend 
the registration of share transfer unless its debt has been settled; and  
E. If any of the contracting parties is lacking legal capacity, is incapacitated or has been 
declared bankrupt or insolvent.

Article (215 )  
Transfer of Title to Shares by Inheritance, Will or Court Order  
1. If title to a share is transferred by way of inheritance or will, the heir or legatee shall 
request that the title transfer be recorded in the share register.  
2. If the title transfer is effected under an enforceable court order, it shall be recorded in the 
Share Register pursuant to such order. The transferee shall be able to exercise the rights 
resulting from the transfer as of the date of registration.

Article (216 )  
Indivisibility of Shares  
Every share shall be indivisible. However, if the title to a share is conferred upon several  
Federal Decree Law No. (32) of 2021 on Commercial Companies  95 
       heirs or if the share has multiple holders, they shall choose from among themselves a 
representative vis -à-vis the Company. The holders shall be jointly liable for the obligations 
arising from share title. If the holders fail to agree on a representative, any of them shall be entitled to recourse to the competent court for the appointment of such a representative.

Article (217 ) 
Restrictions on Trading Founders' Shares  
1. Founders' shares, whether in cash or in kind, may not be traded prior to the publication of 
the balance sheet and the profit and loss account for at least two fiscal years of the date 
of listing the Company on the financial market in the State or of the date of registration 
of the Company in the commercial register maintained by the Competent Authority, in the case of companies exempted from listing. Such shares shall bear an annotation 
indicating that they are founders' shares. The provisions of this Article shall apply to 
shares subscribed for by founders in connection with a capital increase prior to the end 
of the restriction period.  
2. During the restriction period, such shares may be pledged or transferred by way of sale by 
a founder to another founder or by the heirs of a founder [if deceased] to a third party or by the bankruptcy trustee of a founder to a third party or under a final judgment.  
3. The board of directors of the SCA may issue a resolution to extend the restriction period 
mentioned in Clause [1] of this Article for up to [3] further years.

Article (218 )  
Attachment of Shares  
The company's property may not be attached on account of a shareholder's debt. However, 
any shareholder's creditors may attach the shareholder's shares and their resulting profits, so 
that the attachment shall be annotated in the Share Register and in the financial market on 
which the Company's shares are listed.  
   
Federal Decree Law No. (32) of 2021 on Commercial Companies  96

Article (219 )  
Shareholder's Failure to Pay Outstanding Share Value  
1. If a shareholder in a Joint Stock Company fails to pay any installment on his subscription 
when it becomes due, the board of directors may notify the shareholder to pay the 
outstanding installment by registered letter. If the shareholder fails to make payment 
within [30] days, the Company may then sell the share at an open auction or according 
to the resolutions of the SCA.  
2. The Company shall satisfy from the sale proceeds the balance of overdue installments and 
expenses as compensation for the delay, and shall pay the remaining amount to the 
holder of the share. The Company shall have a right of recourse against the assets of the shareholder insofar as the Company's claims remain unsatisfied, and the shares shall be 
recorded in the Share Register in the name of the purchaser.

Article (220 )  
Discharge of Shareholder  
1. The Company may not relieve the shareholder from his obligation to pay the value of a 
share, and such obligation may not be set off against any of the shareholder's rights owed by the Company.  
2. Any creditors of the Company may file a lawsuit against the shareholder to compel 
payment of the value of the share.

Article (221 )  
Treasury Shares  
1. The company may not pledge its own shares or purchase such shares unless the purchase 
is intended to reduce the issued capital or for the amortization of the shares. in which case, such shares shall not have a vote in the deliberations of the General Assembly nor a 
profit share.  
2. Notwithstanding the provision of Clause [1] of this Article, it shall be permissible for the 
company that has been incorporated for at least two fiscal years to purchase – subject to  
Federal Decree Law No. (32) of 2021 on Commercial Companies  97 
       prior approval of the General Assembly – a percentage not exceeding [10%] of its shares 
for the purpose of disposing of the same in any way, including transfer of ownership, in 
accordance with the conditions, controls and procedures to be decided by the SCA. The 
treasury shares may not be included in the quorum for meetings of the General Assembly, nor may they have a vote in deliberations of the General Assembly or a share 
in the profit, unless they have been transferred or cancelled. In case such shares are 
cancelled, the company capital shall be reduced by the number of cancelled shares. In this case, the reduction process shall not be subject to the provisions of Articles [206] 
and [204] of this Decree Law.