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What penalties are applicable to UAE onshore or mainland LLC companies?

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Gateley Legal

Article by

Amrik Sangha

Amrik Sangha

Mohammad Mian

Mohammad Mian

A number of administrative penalties have been recently introduced following the issuance of a UAE Cabinet resolution. This sets out fines for non-compliance with the UAE Federal Decree by Law No. 32 of 2021 concerning commercial companies (New Companies Law).

The introduction of such a resolution strongly indicates that overseeing UAE Cabinets are taking a much stricter approach to company adherence with the New Companies Law.

Non-compliance  Approximate penalty (AED)
Accounting register: 
Failure to maintain an accounting register		 15,000
Trade name change: 
Failure to comply with a decision to change the trade name		 A monthly fine of 500 reaching a maximum amount of 5,000
Ownership: 
Failure to have a required UAE national ownership percentage/ minimum number of Emirati board members, should the LLC carry out activities with strategic significance		 100,000
Memorandum of Association (MOA): 
Failure to amend the company MOA to ensure it is in line with the New Companies Law		 A monthly fine of 500 reaching a maximum amount of 5,000
Loss disclosure: 
Failure to call a general assembly should the company amount losses equal to 50% or more of its capital		 50,000
Data access: 
Denying shareholders access to minutes of meetings, books and other specific company documents		 5,000
Board meetings: 
Failure to invite a director or board member to a board meeting		 3,000
Refusal of information/ misleading information: 
Refusal, concealment or failure to provide misleading information to authority inspectors		 5,000
Share disposal: 
Disposal of shares in violation of the New Companies Law		 20,000
General assembly: 
Failure to call an annual general meeting		 5,000 which increases to 10,000 if requested by the Ministry

 

For more information

Gateley’s UAE corporate team can offer guidance on avoiding penalties by thoroughly reviewing your company’s paperwork and practices and providing detailed advice on compliance. To learn more, please contact an expert listed below or learn more about our team here.

Gateley Plc is authorised and regulated by the SRA (Solicitors' Regulation Authority). Please visit the SRA website for details of the professional conduct rules which Gateley Legal must comply with.

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