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Amendments in Public Joint Stock Company by the New Companies Laws

New Amendments in UAE Companies Law

New Amendments in UAE Companies Law were introduced by the UAE President Sheikh Khalifa Bin Zayed Al Nahyan on September 20, 2021, regarding Commercial Companies Federal Law. Decree No.32 of 2021 was promulgated by amending the Federal Law by Decree No.26 of 2020 which was the substitution of Federal Law No. 2 of 2015. The Federal Decree-Law No. 26 of 2020 was published on 20 September 2020 in which around fifty-one postulates of the Existing Companies Law were revised. The New Companies Law was applied on 2 January 2022.

Public Joint Stock Companies under New Company Laws

The doctrine of foreign shareholding is adapted by revolutionary changes in UAE companies. This doctrine is brought -forward for a foreign shareholding of companies for the following purposes, for instance, collective management, minority protection, modifications in the Existing Law, Division in public joint-stock companies (PSCs), the introduction of special purpose acquisition companies (SPACs), special purpose vehicles (SPVs), the introduction of measures for facilitating public offerings, Competitive capacity for Economic Development, Indication for the value of its shares.

Following amendments are vividly brought in Public Joint Stock Companies under New Company Laws of UAE:-

  • Proxy of a Director

Substitution or proxy of a director is the prerogative of the board of a Public Joint Stock company that is authorized to nominate and recommend a new director within thirty days of the resignation or retirement of the existing director. After the recommendation/nomination by the board, the General Assembly has the authority to elect the nominee director by its own choice. After approval, the new director will complete the remaining term of the previous director. If there is such a situation that the Board could not appoint a director during the stipulated period, the Board has to convene an election to appoint a new director in the first meeting of the General Assembly. The newly elected director shall complete the remaining term of the forerunner.

  • Directors’ salary

From the total profit of an annual accounting period after the deductions (taxes, reserve deductions, etc.) ten percent is subjected to the remuneration of a director. In the end, if the company has not generated profits for that year, despite the company’s constitutional documentation and agreement of the General Assembly, a board member may be paid a lump sum and tax-free salary not more than 200,000  UAE Dirham at the end of the financial year.

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