UAE Private Joint Stock Company
Posted on 8th February 2010 by Camille Paldi,
Article 215 of Federal Law No. 8 of 1984 Concerning Commercial Companies (the “Law”) defines a private joint stock company as being a company founded by at least three people and whose shares may not be floated to public subscription. The founding members must fully subscribe to the total capital, which may not be less than two million AED. Except the provisions made on public subscription, all the provisions provided in the Law for a public joint stock company apply to a private joint stock company.
Article 215 of the Law states:
A number of not less than three founding members may incorporate amongst them a private joint stock company whose shares are not offered for public subscription. The founding members will full subscribe to the capital, which must not be less than two million AED.
Article 216 of the Law states:
“Except those on public subscription, all provisions stipulated in this law concerning public joint stock companies shall apply to private joint stock companies.”
The law permits a private joint stock company to be converted to a public joint stock company if the following conditions are met:
Article 217 of the Law states:
“A private joint stock company may be converted to a public joint stock company if the following conditions are satisfied:
- That the nominal value of issued shares is fully paid up.
- That a period of not less than two financial years had expired.
- That during the two years preceding the application for conversion, the company had achieved an average net profit of not less than ten percent of the capital, distributable to shareholders.
- That a resolution of the extraordinary general assembly for the conversion of the company is adopted by a majority of three quarters of the company capital.”
A decree by the Minister shall be issued to declare the conversion of the company to a public joint stock company. The decree, along with the company’s memorandum and articles should be published in the Official Gazette at the company’s expense.”
*This information was taken from ‘Choosing Your Type of Company’ published by the Abu Dhabi Chamber of Commerce and the Commercial Companies Law Federal Law No. 8 of 1984.
Posted on 8th February 2010 by Camille Paldi