Company shareholders in Dubai have a series of rights available to them according to the types of shares purchased in a company. The liability of company partners in the UAE is limited only to the extent of the investments that have made in that company. According to the Commercial Companies Law, the most commonly used types of companies with shareholders are the limited liability company and the joint stock company. These types of legal entities are also those that offer limited liability to their investors.
Each of them requires a minimum number of shareholders. Foreign investors in Dubai generally open limited liability companies. These companies do not issue share certificates but their shareholders hold a percentage of the capital. Investors in Dubai can request the services provided by the experts at our law firm in Dubai for details about the limited liability companies that can be incorporated in the Free Zones in the city.
General shareholder rights in Dubai
Shareholders in Dubai are entitled to a series of basic rights after they have invested in a company. These are:
-the right to transfer shares and pre-emption rights;
-the right to share in the profits of the company (may be subject to statutory conditions).
The Board of Directors in a private or public joint stock company must assemble an ordinary shareholder’s general meeting at least one a year. The place for these meetings and, in some cases, even their time, is usually stipulated in that company’s by-laws. During these meeting, the shareholders discuss issues like the company’s activities and financial situation for the respective year, the profits and loss account and budget, the distribution of the share of profits among themselves.
In some cases, company shareholders have rights against the company directors. One of our lawyers in Dubai can tell you more about the relationship between the shareholders and the company directors.
We have prepared a video with information about the shareholders of companies in Dubai we invite you to watch:
Shareholders’ agreements and other issues
Minority shareholders can benefit from special rights. These may be stipulated in the company’s articles of association or they may be agreed upon through a shareholders’ agreement concluded afterward and enforced in a UAE court. Shareholders in companies in Dubai have a certain right to disclosure of information. They are entitled to knowing complete and accurate information about the financial position of the company and its evolution. However, the company’s activities outside of the general assembly may be privy from them.