The UAE government maintains laws and regulations to safeguard the interests of all parties engaged in any economic transaction. The introduction of Memorandum of Association in the UAE highlights the best practices implemented by firms operating there. In this section, we will describe what a Memorandum of Agreement is and explore its functionality.
ALL ABOUT MEMORANDUM OF ASSOCIATION IN THE UAE.
A Memorandum of Association (MoA) is a business document signed by the founding members or partners who agree to start a firm. According to UAE legislation, every shareholder must approve to the creation of a corporation.
MoAs are written in Arabic and may be translated into several languages. Once completed, the draft must be filed in the commercial register of the emirate’s economic department or the free zone authority where the firm will operate. For example, people starting a firm in Dubai will need to work with the Department of Economic Development in Dubai.
Depending on the nature of your firm, you may also need to register with specific regulatory agencies. The Memorandum of Agreement must also be notarised.
UAE’s Memorandum of Association contains the following:
- A MoA outlines the scope and limitations of the company.
- Mentioned the company address.
- The Memorandum of Agreement (MoA) establishes the relationship between the entity and its members, as well as their rights.
- It outlines the activities that a corporation can participate in and ensures that all activities specified are consistent with the desired business operations.
- The Memorandum of Agreement also specifies the company’s share capital and the value of the shares held by each shareholder. A company’s Memorandum of Agreement specifies the company’s responsibilities and ownership.
CONTENT OF MEMORANDUM OF AGREEMENT IN UAE
In the UAE, memorandums of agreement take on a specific structure. A company’s Memorandum of Agreement comprises the following:
- Name Clause: The company’s name with the proper suffix.
- Object Clause: This indicates the items the firm sells. This section can be modified as needed.
- Situation Clause: This section describes the business’s operations in the United Arab Emirates and specifies the nation’s geographic bounds.
- Capital Clause: Includes the amount of registered shares, the company’s stock, and how the shares are now or will be split in the future. It also indicates how much extra cash each shareholder must contribute to start a firm.
- Liability Clause: Indicates whether the business is government-owned, limited, or unconstrained. It also addresses the subject of shareholder or owner duties.
GUIDELINES FOR INCLUDING COMPANY NAME IN MEMORANDUM OF ASSOCIATION
Any company’s name is extremely important. Certain regulations must be followed while naming a business as part of the Company Memorandum of Association.
- The title cannot be same or similar to an already existent company or brand name. It must be unique and cannot be utilized by any other firm in the government’s database.
- The title should not be offensive or negative.
- Does not include any terms that indicate government sponsorship or involvement, either directly or indirectly.
FAQS
WHAT IS THE DIFFERENCE BETWEEN A MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION?
A MoA, in its most basic form, describes the boundaries and scope of the business. The Articles of Association, on the other hand, lay forth the regulations under which the business will operate.
HOW DOES ONE DRAW A MOA?
If you are confused about the writing of a MoA, you can always seek the assistance of business consulting firms. Here are a few options to consider:
- HHS Lawyers (+971-52-178-2364)
- Dhanguard (+971-4-591-6166)
- Legal House (+971-55-800-5160)
- Private Notary (+971-4-255-5496)
Typically, the cost is determined by the type of firm and its capital worth.
CAN A MOA BE AMENDED?
Yes, it can be changed as needed to reflect changes in the operation of the firm.
CAN YOU RUN A BUSINESS WITHOUT A MOA?
No, you must register your Memorandum of Agreement.
