05 Nov 2018
12 Nov 2018
Part 1 : GENERAL ......................................................................................................................................................... 1
1. Title and repeal .................................................................................................................................................... 1
2. Legislative authority ............................................................................................................................................ 1
3. Application of this Law ..........................................................................................................................................1
4. Date of enactment and commencement ...............................................................................................................1
5. Effect of Regulations made under the Previous Law ........................................................................................... 1
6. Schedules ............................................................................................................................................................. 1
Part 2 : ADMINISTRATION OF THIS LAW .........................................................................................................................3
7. The role of the Registrar ....................................................................................................................................... 3
Part 3 : INCORPORATION AND REGISTRATION OF COMPANIES .........................................................................................4
8. Types of companies................................................................................................................................................4
9. Legal personality....................................................................................................................................................4
Part 4 : COMPANY FORMATION AND INCORPORATION ......................................................................................................5
10. Method of forming a Company..............................................................................................................................5
11. Articles of Association.........................................................................................................................................5
12. Incorporation........................................................................................................................................................5
13. Effect of incorporation ........................................................................................................................................6
14. Licence ................................................................................................................................................................6
15. Effect of Articles of Association..........................................................................................................................6
16. Alteration of Articles of Association....................................................................................................................6
17. Copies of Articles of Association for Shareholders .............................................................................................7
18. Conduct of business in the DIFC ..........................................................................................................................7
19. Filing of Special Resolutions and certain other resolutions and agreements ...................................................7
Part 5 : CORPORATE CAPACITY AND TRANSACTIONS.......................................................................................................9
20. Capacity of Company............................................................................................................................................9
21. Form of contracts ................................................................................................................................................9
22. Pre-incorporation contracts.................................................................................................................................9
23. Participation in a Holding Company .....................................................................................................................9
Part 6 : CLASS RIGHTS.................................................................................................................................................10
24. Variation of class rights.....................................................................................................................................10
25. Shareholders’ right to object to variation or abrogation....................................................................................10
Part 7 : PRIVATE COMPANIES AND PUBLIC COMPANIES ................................................................................................11
CHAPTER 1 – FEATURES OF A COMPANY.....................................................................................................................11
26. Limited Liability .................................................................................................................................................11
27. Definitions of Public and Private Companies .....................................................................................................11
28. Name of a Private Company ...............................................................................................................................11
29. Name of a Public Company .................................................................................................................................11
30. Access to the Confirmation Statement of a Public Company ............................................................................11
CHAPTER 2 –ALTERATION OF COMPANY TYPE..............................................................................................................12
31. Re-registration of a Public Company as a Private Company ..............................................................................12
32. Re-registration of a Private Company as a Public Company ..............................................................................13
CHAPTER 3 – SHAREHOLDERS AND SHARES GENERALLY.............................................................................................14
33. Shareholders......................................................................................................................................................14
34. Nature of Shares.................................................................................................................................................14
35. Minimum share capital........................................................................................................................................15
36. Alteration of share capital .................................................................................................................................15
37. Non-cash consideration for Shares in a Private Company .................................................................................15
38. Non-cash consideration for Shares in a Public Company ..................................................................................16
39. Bearer Shares ....................................................................................................................................................17
40. Shareholders’ pre-emption rights......................................................................................................................17
41. Exceptions to the pre-emption right .................................................................................................................18
CHAPTER 4 – PROHIBITION OF PUBLIC OFFERS BY PRIVATE COMPANIES.......................................................................18
42. Prohibition of public offers by Private Companies.............................................................................................18
43. Enforcement of the prohibition in Article 42 .....................................................................................................19
CHAPTER 5 – REGISTERS AND SHARE CERTIFICATES ..................................................................................................20
44. Register of Shareholders ...................................................................................................................................20
45. Register of debentures.......................................................................................................................................21
46. Transfer and registration of Shares and debentures..........................................................................................21
47. Place where the registers are kept ...................................................................................................................22
48. Inspection of registers ......................................................................................................................................22
49. Rectification of registers ...................................................................................................................................23
50. Share certificates...............................................................................................................................................24
51. Right of Public Company to request information about interests in its Shares.................................................24
CHAPTER 6 – REDEMPTION AND PURCHASE OF SHARES..............................................................................................25
52. Power to issue redeemable Shares....................................................................................................................25
53. Power of Company to purchase its own Shares .................................................................................................26
54. Treasury shares..................................................................................................................................................28
55. Prohibition on financial assistance to acquire Shares.......................................................................................29
CHAPTER 7 – REDUCTION OF CAPITAL.........................................................................................................................31
56. Reduction of share capital.................................................................................................................................31
57. Reduction of share capital by a Private Company supported by a solvency statement ....................................31
58. Reduction of share capital by Special Resolution confirmed by a Court order..................................................32
59. Court order confirming reduction of share capital ............................................................................................33
60. Registration of order and statement of capital..................................................................................................34
61. Public Company reducing its share capital below its authorised minimum ......................................................34
62. Liability to Creditors in respect of reduction of share capital by a Court order ................................................34
63. Treatment of reserves arising from reduction of capital....................................................................................35
CHAPTER 8 –DISTRIBUTIONS.......................................................................................................................................35
64. Restrictions on Distributions..............................................................................................................................35
65. Consequences of unlawful Distribution .............................................................................................................36
CHAPTER 9 – DIRECTORS AND SECRETARIES...............................................................................................................36
66. Directors.............................................................................................................................................................36
67. Election, term and removal of Directors ............................................................................................................37
68. Duties of Directors..............................................................................................................................................37
69. Duty to act within powers ..................................................................................................................................38
70. Duty to promote the success of the Company ...................................................................................................38
71. Duty to exercise independent judgement .........................................................................................................38
72. Duty to exercise reasonable care, skill and diligence ......................................................................................38
73. Duty to avoid conflicts of interest .....................................................................................................................39
74. Duty not to accept benefits from third parties...................................................................................................39
75. Duty to declare interest in a proposed transaction or arrangement .................................................................40
76. Contraventions ..................................................................................................................................................40
77. Duty of Directors to declare interest in existing transaction or arrangement ..................................................40
78. Ratification of interest in existing transaction or arrangement........................................................................41
79. Prohibition of financial assistance to Directors.................................................................................................42
80. Validity of acts of Director..................................................................................................................................42
81. Secretary............................................................................................................................................................42
82. Register of Directors and Secretaries................................................................................................................43
83. Assumptions in relation to Directors and Secretary ..........................................................................................43
84. Disqualification orders.......................................................................................................................................44
CHAPTER 10 – MEETINGS...........................................................................................................................................44
85. Participation in meetings...................................................................................................................................44
86. Annual General Meeting .....................................................................................................................................44
87. Requisition of meetings......................................................................................................................................45
88. Registrar’s power to call meeting in default......................................................................................................45
89. Notice of meetings ............................................................................................................................................45
90. General provisions as to meetings and votes....................................................................................................46
91. Representation at meetings...............................................................................................................................46
92. Resolutions in writing of a Company..................................................................................................................47
93. Recording of decisions by sole Shareholder .....................................................................................................47
94. Proxies................................................................................................................................................................47
95. Demand for poll ..................................................................................................................................................48
96. Minutes and examination of minute books .......................................................................................................48
97.Takeover offers....................................................................................................................................................49
98.Right of offeror to buy out minority Shareholders...............................................................................................49
99.Effect of notice under Article .............................................................................................................................50
100.Right of minority Shareholder to be bought out by offeror................................................................................51
101.Effect of requirement under Article ..................................................................................................................52
102.Applications to the Court...................................................................................................................................53
103.Joint offers........................................................................................................................................................53
104.Associates.........................................................................................................................................................54
Part 8 : MERGERS.........................................................................................................................................................56
CHAPTER 1 –GENERAL...............................................................................................................................................56
105.Application and interpretation..........................................................................................................................56
CHAPTER 2 –REQUIREMENTS APPLICABLE TO A MERGER.............................................................................................57
106.Merger agreement..............................................................................................................................................57
107.Resolutions and certificates.............................................................................................................................58
108.Approval of the Merger Agreement....................................................................................................................59
109.Simplified approval of a Group Merger...............................................................................................................60
110.Objection by Shareholders.................................................................................................................................61
CHAPTER 3 –CREDITORS............................................................................................................................................61
111.Notice to Creditors............................................................................................................................................61
112.Company to apply to Court if solvency statement not made.............................................................................62
113.Objection by Creditor if a solvency statement is made.....................................................................................63
114.Consent of Registrar required for mergers involving Foreign Companies.........................................................63
CHAPTER 4 –COMPLETION OF MERGER AND CONTRAVENTIONS....................................................................................66
115.Effect of completion of merger..........................................................................................................................66
116.Contraventions relating to merger.....................................................................................................................67
Part 9 : COMPROMISES AND ARRANGEMENTS...............................................................................................................68
117.Power of Company to compromise with Creditors and Shareholders................................................................68
118.Information relating to compromise to be circulated........................................................................................69
119.Provisions for facilitating company reconstruction or amalgamation..............................................................69
Part 10 : ACCOUNTS, REPORTS AND AUDIT..................................................................................................................70
CHAPTER 1 –GENERAL...............................................................................................................................................70
120.Application of this Part......................................................................................................................................70
121.Waiver and modification of this Part.................................................................................................................70
CHAPTER 2 –ACCOUNTS AND REPORTS.......................................................................................................................70
122.Maintenance of Accounting Records.................................................................................................................70
123.Financial years..................................................................................................................................................71
124.Accounts...........................................................................................................................................................71
125.Provision of copy of accounts to a Shareholder................................................................................................72
126.Directors’ report for Public Companies..............................................................................................................72
CHAPTER 3 –AUDITORS..............................................................................................................................................73
127.Appointment and removal of auditors...............................................................................................................73
128.Auditor’s report to the Company........................................................................................................................75
129.Auditors’ duties and powers..............................................................................................................................75
130.Resignation of an auditor..................................................................................................................................75
131.Co-operation with auditors...............................................................................................................................76
Part 11 : OTHER TYPES OF COMPANY............................................................................................................................77
132.Incorporation of prescribed types of Company..................................................................................................77
Part 12 : RECOGNISED COMPANIES...............................................................................................................................78
133.Foreign Companies............................................................................................................................................78
134.Registration.......................................................................................................................................................78
135.Effect of registration.........................................................................................................................................78
136.Requirements of a Recognised Company..........................................................................................................78
137.Conduct of business in the DIFC........................................................................................................................79
138.Maintenance of Accounting Records.................................................................................................................79
139.Inspection and Remedies..................................................................................................................................80
Part 13 : TRANSFER OF INCORPORATION......................................................................................................................81
140.Transfer of incorporation to DIFC.......................................................................................................................81
141.Certificate of continuation................................................................................................................................81
142.Effect of certificate...........................................................................................................................................81
143.Copy of certificate of continuation...................................................................................................................81
144.Rights and liabilities..........................................................................................................................................82
145.Transfer of incorporation from DIFC to another jurisdiction..............................................................................82
146.Refusal to grant authorisation to transfer incorporation..................................................................................82
Part 14 : POWERS AND REMEDIES................................................................................................................................83
147.Application of Operating Law.............................................................................................................................83
148.Directions issued by the Registrar....................................................................................................................83
149.Orders in event of unfair prejudice....................................................................................................................83
150.Strike off and Restoration.................................................................................................................................83
Part 15 : REGULATIONS................................................................................................................................................84
151.Power to make Regulations...............................................................................................................................84
152.Waivers and Modification of the Law and Regulations......................................................................................85
Part 16 : MISCELLANEOUS............................................................................................................................................86
153.Public Register...................................................................................................................................................86
154.Fees...................................................................................................................................................................86
Schedule 1 ................................................................................................................................................................87
Schedule 2 ................................................................................................................................................................95
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