Dubai Multi Commodities Centre (DMCC) recently announced new DMCCA

Company Regulations 2020, which came into effect from 2 January 2020 to further enhance the ease of registration and

operation of businesses.

The new Regulations have brought in some changes in the existing

company law framework, increasing

by this the remit of the activities undertaken by the DMCC registered

companies.

Some of the key changes brought in through the New Regulations

are as under:

Association - As per the New Regulations, DMCC

registered Companies will have the following flexibility in drafting their Articles

of Association:

prescribed by DMCCA (Standard DMCC Articles),

within the Standard DMCC Articles, or

Articles entirely by special resolution, provided they meet the required

standards and conditions as set out in the Regulations.

DMCCA has made it easier for shareholders to determine how they

structure the activity of their

business, within the existing regulatory framework.

structure their shareholdings in the way that best suits their requirements.

Previously DMCCA only allowed only ordinary shares. Under the 2020 Regulations,

a company may issue other share types such as treasury shares, preference

shares, redeemable shares and bonus shares, by this reflecting more flexibility

in the equity structure of the organization.

share capital requirement of AED 50,000. However, Registrar still has the right

to specify the minimum amount of share capital for companies, in agreement with

the applicable business standards and the type of activity undertaken.

company officers: the new Regulations expressly prohibit the financial assistance

to directors and further deals with the role, duties and liabilities of

directors, managers or company secretaries. For adding clarity, each of these

responsibilities is described in terms of actions and outcomes.

stress out the already existing rule on mandatory yearly audits for DMCC

companies, audits that are to be prepared in accordance to IAS, submitted to

and approved by the DMCC Authority. In furtherance, the auditors are subject to

new obligations of disclosure of breaches in the activity of the companies at

issue and, correlatively, companies are being called to implement adequate

internal standards in order to comply with the new requirements.

to and from the DMCC: As per the new regulation and Non

DMCC entity can make an application to the registrar of DMCC for transfer of

company to DMCC or transfer of DMCC company to another jurisdiction subject to

fulfilling of certain conditions stipulated in the Regulations.

to voluntarily suspend its License for a period of up to twelve months or even

for a longer period, as approved by the Registrar. The change of status to "dormant"

allows a company to cease operations for a determined period, without being

required to terminate its commercial license.

insolvency: New sections on winding up and

insolvency outline, among other things, the different methods of winding up a

company and the specific obligations of office holders. The new Regulations

also give office holders much clearer guidance on the steps involved in winding

up a company, and the obligations they are required to fulfill. It also states

that the provisions of the UAE Federal Bankruptcy Law and any repealing or

amending legislation are applicable to DMCC companies.

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