This is a Special Law Update from ProConsult Advocates & Legal Consultants, bringing to your attention the Mandatory Changes required to the Memorandum of Association of your LLC Companies before the end of June 2017, to avoid dissolution of your company & to prevent fines being imposed.
In fact the Grace Period is about to expire and these changes have to be made before the End of June 2017
THE NEW COMMERCIAL COMPANIES LAW (CCL)
What are the required changes that you as a Business owner have to make in a Memorandum of Association (MOA)?
Introduction: The Law no.2 of 2015 dubbed as the New Commercial Companies Law or New CCL was enacted & came into effect on the 1st, of July 2015. It is a bold & a progressive attempt to regulate the business & commercial sector. It covers areas such as how the companies are to be managed keeping in view the principle of transparency, protection of shareholders rights, auditing of account etc. The new law in general attempts to provide a level playing field, encourage foreign direct investment and good corporate governance. [Article.2].
As a business owner or Manager of a Company where do you stand vis-à-vis the New CCL?
The intention of the legislature is to vigorously enforce the new company law. The provisions of this enforcement policy are as under:
First, all companies are under an obligation to conform to the provisions of the new law within one years of its coming into force. [Article. 374(1)]
Second, any failure to comply with the provisions of the new law will lead to the dissolution of the company in accordance with the provision of the New CCL unless the one year grace period is extended. [Article: 374(2)]
Lastly to ensure that the new law in followed in letter & spirit, the regulatory authorities has been given real teeth in form of a pecuniary penalty regime. For violation of new CCL penalties ranging from AED 10,000/- to AED 100,000/- shall be imposed on companies & their directors/managers/owners.
Therefore, to avoid dissolution of your company & to prevent fines being imposed it has become urgent to make the required changes in the company structure as the grace period is about to expire.