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What does LLC stand for?
What does LLC stand for?
Limited Liability Company
The new Commercial Companies Law (CCL) requires a minimum of 50% Emirati participation in all companies in the UAE.
The new Commercial Companies Law (CCL) requires a minimum of 50% Emirati participation in all companies in the UAE.
False
The 49-51 rule, which required a minimum of 49% Emirati ownership in companies, has been abolished.
The 49-51 rule, which required a minimum of 49% Emirati ownership in companies, has been abolished.
True
What is the name of the committee that decides on activities with strategic importance for the UAE and sets licensing requirements for companies?
What is the name of the committee that decides on activities with strategic importance for the UAE and sets licensing requirements for companies?
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What is the minimum percentage of share capital required for a partner to request a general assembly meeting?
What is the minimum percentage of share capital required for a partner to request a general assembly meeting?
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What was the previous minimum percentage of share capital required for a partner to request a general assembly meeting?
What was the previous minimum percentage of share capital required for a partner to request a general assembly meeting?
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The timeframe for inviting a general assembly meeting has been extended from at least 15 days to at least 21 days.
The timeframe for inviting a general assembly meeting has been extended from at least 15 days to at least 21 days.
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The quorum needed for a general assembly meeting has been reduced from 75% to 50% at the first meeting.
The quorum needed for a general assembly meeting has been reduced from 75% to 50% at the first meeting.
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What is the minimum duration for an adjourned general assembly meeting to be held after the first meeting?
What is the minimum duration for an adjourned general assembly meeting to be held after the first meeting?
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The new CCL allows for virtual general assembly meetings.
The new CCL allows for virtual general assembly meetings.
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A shareholder can now seek a court order to increase the LLC's share capital to prevent its dissolution or pay its debts.
A shareholder can now seek a court order to increase the LLC's share capital to prevent its dissolution or pay its debts.
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The changes introduced by the new CCL regarding the abolishment of the general requirement for Emirati majority participation in companies and branches of foreign companies will come into effect on January 2, 2021.
The changes introduced by the new CCL regarding the abolishment of the general requirement for Emirati majority participation in companies and branches of foreign companies will come into effect on January 2, 2021.
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The Decree Law abolishes Art. 329 of the CCL.
The Decree Law abolishes Art. 329 of the CCL.
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The Decree Law made changes to Article 71 of the CCL, allowing for a one-person LLC to be established by a foreign investor.
The Decree Law made changes to Article 71 of the CCL, allowing for a one-person LLC to be established by a foreign investor.
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Study Notes
UAE Amended Commercial Companies Law
- The UAE government amended the Commercial Companies Law (CCL) in 2020 by issuing Federal Decree Law No. 26 of 2020.
- This overhauled the corporate landscape by removing the requirement for a majority Emirati shareholder.
- The 49-51 rule, requiring a minimum 49% Emirati shareholding or service agent, is now abolished.
- Article 10 of the CCL is amended to introduce a committee deciding on activities with strategic importance for the UAE.
- These activities will have specific licensing requirements, including potentially a percentage of Emirati participation in the company's capital or management.
- This decision-making power is given to the local Department of Economic Development authorities within each emirate.
- Also, Federal Decree Law No. 19 of 2018 on Foreign Direct Investment is abolished.
- The requirement for a local service agent for a branch of a foreign company is removed.
Limited Liability Companies (LLCs)
- The law now allows one-person LLCs. A single owner, either natural or legal person, can establish an LLC.
- The general assembly's threshold for a minority shareholder to request a meeting was reduced from 25% to 10% of the share capital.
- The timeframe for inviting a general meeting was extended from 15 to 21 days, with the option of modern technology methods for invitations specified/allowed in the company's MoA (memorandum of association).
- Quorum requirements for general assembly meetings are reduced from 75% to 50% for the first meeting, and can be adjusted based on the company's MoA (memorandum of association).
- The adjourned meeting must be held within 5-15 days of the first meeting.
- The possibility of virtual general assemblies is now possible.
- A new paragraph in Art. 101 of the CCL allows companies to seek a court order for a capital increase.
Implementation
- Changes will go into effect January 2, 2021, with the exception of the abolishment of majority Emirati participation in foreign company branches.
- A transition period of one year, starting from January 2, 2021, is given to companies to adjust their MoAs.
- This transition period can be extended.
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Description
This quiz provides insights into the significant changes made to the UAE Commercial Companies Law in 2020. Key topics include the removal of the majority Emirati shareholder requirement and the introduction of new licensing requirements for strategic activities. Test your understanding of how these amendments reshape business operations in the UAE.
