Transferring shares in a Limited Liability Company (LLC) in Dubai Mainland is a common practice for businesses looking to expand, bring in new investors, or restructure ownership.
In this article, you will learn the step-by-step process of share transfer for an LLC in Dubai Mainland, putting the required documentation and legal compliances into perspective to ensure the process is as smooth as possible.
Steps to Transfer Shares for an LLC in Dubai Mainland
Gatestone Group will assist in the following tasks involved in transferring shares in an LLC in Dubai Mainland:
1. Understanding the Transfer of Shares
The transfer of shares in an LLC implies the transfer of ownership, usually governed by the United Arab Emirates (UAE) Commercial Companies Law. The law states that every company should follow a particular procedure for share transfer to be considered legally valid and acceptable to the concerned authorities.
The share transfer might affect the entity’s ownership structure and must be done carefully. Also, if there is any element of foreign ownership in the firm, the transfer must be in conformation with any applicable foreign ownership legislation.
2. Preparation of Documents
The basic requirement for share transfer is collecting the documents required for due process to comply with the structure laid by the UAE authorities. Some of the required documents include, but are not limited to:
- Memorandum of Association (MoA): It is required to provide a copy of the firm’s MOA, notarised and attested. This is the ownership structure document where one can locate the agreed terms, if any, about the transfer of ownership.
- Shares Sale Agreement: There must be a signed legal agreement between the buyer and seller of the shares.
- Board Resolution: The company board must pass a resolution for approval to transfer shares.
- Amended MOA: After the transfer, the addendum MOA must to reflect the latest shareholding pattern.
- Identification Documents: Personal identification documents are needed for the seller and buyer, accordingly, and may include passport copies, Emirates ID, etc.
- Power of Attorney: When any person acts on behalf of the buyer or seller, such a person should have a notarised power of attorney.
After preparing all these documents, it would be time to approach the Department of Economy and Tourism (DET) for its approval.
3. Approval Through DET
The DET in Dubai Mainland is the governing body that approves the company’s change in ownership, All the required documents, including the Share Sale Agreement and Board Resolution, must be submitted to DET by the company for its approval.
According to the local laws, the DET will check the submitted documents for validity. After approval, the DET will update a company’s registration by reflecting new ownership. The complications associated with such a transfer mean that the time it takes for such a procedure to be completed can range from a few days to a couple of weeks.
To help you through the legal process involved in any share transfer, you may consult Gatestone Group. We are here to guide you right from the initial consultation through execution.
4. Amend Memorandum of Association (MOA)
After the DET approves the application, the next step is amending the MOA of the company. It is here that new ownership structure information needs to be represented. Afterwards, the modified MOA must also be notarised and attested by a public notary in Dubai.
The modification to the MOA will ensure that the new shareholder structure is legally recognised and documented, which is important to avoid any further disputes related to the ownership.
It is important to note that in Abu Dhabi, it is a requirement to have 14 days publication in two local newspapers.
5. Obtain the New Trade License
Once the DET approves the share transfer, the company will receive a new trade license reflecting the updated shareholder information.
Conclusion
A successful share transfer in a Dubai Mainland LLC involves meticulous attention to detail and compliance with legal regulations. By understanding the key steps, documentation requirements, and potential challenges, you can navigate the process efficiently and minimize risks. Consider seeking expert guidance to ensure a smooth and successful transfer of ownership.
Need help transcribing your shares in Dubai due to legal technicalities? Gatestone Group will walk you through it. Our professionals undertake every process professionally and within the laws of the UAE. Contact Gatestone Group for a free consultation at [email protected] or call us at +971 4 450 1023.
FAQs
The time required will depend upon the complexity involved with the transfer and the speed at which the necessary approvals are obtained. In general terms, it should take approximately 2-4 weeks.
Yes, a share transfer needs modification of the company’s MOA to show the new owners. This is for legal purposes and to avoid disputes in later stages.
Yes, but only under observance of the foreign ownership laws in the UAE. Foreign investors can have 100% ownership for most sectors, but restrictions apply in some industries.
