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Board is Responsible for Management

Transfer of shares In the event that any of the bondholders wishes to sell its shares, notification must first be agreed to the other shareholders who have an involuntary right of preemption in relation to those shares. Only if those anticipation rights are not exercised is the seller permitted to transmission the shares to a third party. Where federal approval is compulsory for the establishment of the company, such federal consent is also required for the transfer of shares in that company. Note that a transmission must not result in the 51% UAE ownership being reduced. Management Limited liability companies should be accomplished by at least one but not more than five managers. The directors may be an individual or a company. The role of the manager may be equated to that of directors in other jurisdictions.

The powers of the manager and way of appointment and dismissal should be definite in the Memorandum of Association and possibly extra documentation such as a separate management contract If the number of shareholders exceeds seven, it is also needed for the shareholders to establish a Board of Supervisors including at least 3 of the shareholders This Board is responsible for management of the managers management of the company and has powers of examination of financial and other documentation, supervision of the budget groundwork of the annual report and the distribution of incomes The Board of Supervisors reports to the shareholders. General Meetings A Limited Liability Company must assemble at least one general meeting of the shareholders during the four months ensuing the end of the company's financial year.

In addition, the manager must call a universal meeting if so requested by the Board of directors or by a number of shareholders holding not less than 25% of the share wealth Detailed notice provisions apply in each case. All shareholders are allowed to attend general meetings in person or by proxy with the number of votes held being signified by the number of shares owned. Shareholders Resolutions any alteration to the company's Memorandum of Association or change in its share capital must be accepted by shareholders representing at least 75% of the share capital. The company's Memorandum of overtone may however provide for a greater popular Except for the foregoing, resolutions in general meetings are realistically passed if approved by shareholders representing at least 50% of the share capital although again a large majority may be specified in the Memorandum of Association.

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Assumed by Foreign Companies

The most common form assumed by foreign companies is the limited liability company and set out under are certain of the key issues to be measured in relation to such entities. Company name The name of the company should be resulting from its objects or the name of one or more of its allies although this is not mandatory. It is possible to find the approval of the relevant authorities to a precise name prior to proceeding with an application for registration. Local shareholding The law offers that at least 51% of the total shareholding in a limited liability company must be seized by a UAE national (or a company wholly owned by UAE nationals).

Minimum share capital The current minimum share capital obligatory for limited liability companies is Dhs. 300,000 if recorded in Dubai or Dhs. 150,000 if registered in any other emirate. Share principal must be fully paid up and put with a locally registered bank. Contributions in kind are allowed under certain conditions. Profit and Loss The profits and sufferers of a limited liability company can be distributed between the shareholders in, subject as stated below, whatever proportions they approve in the Memorandum of Association The ratio does not essential to reflect the shareholding and indeed often varies in order to dilute the mandatory 51% UAE national shareholding. It is not however allowable for the parties to express a profit share in the Memorandum of Association which implications to entitle the local shareholder to less than 20% of the profits.

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