LLC Regulations

Implements the Commercial Companies Law for limited liability companies, including single-owner LLCs: it sets which joint-stock rules do not apply, how the general meeting and directors operate, that the memorandum must state the capital and its valuation, that accounts follow international standards with a licensed auditor, and that approved cash dividends are paid within 30 days.

Summary

Cabinet Resolution No. 77 of 2022 fills the gaps the Commercial Companies Law (Federal Decree-Law No. 32 of 2021) leaves for limited liability companies, and in particular for the single-owner LLC. Issued on 16 August 2022, it took effect the day after its publication in the Official Gazette (Article 24); the portal records 31 August 2022. It has no repeal clause and no amendment recorded.

Article 2 defines the scope: the incorporation and management of an LLC owned by one person, and the cases in which the joint-stock company rules that the Decree-Law applies to LLCs do not fit them. Articles 3 to 6 cover the single-owner company: its name must include the LLC designation with a sole-proprietorship marker, one person may form it or acquire the whole of an existing LLC, and the memorandum must state the owner, name, objects, capital value and valuation method, management and signatories, fiscal year and profit and loss treatment. Under Article 5 the licensing authority decides within 5 business days, silence counts as rejection, a grievance lies within 15 business days and a court challenge within 30 days. Article 6 requires the memorandum, its amendments and a statement of the owner's contributions to be kept at the head office.

Articles 7 to 10 deal with management: one or more directors or a board, majority voting with a chairman's casting vote, a board meeting at least 30 days before the general meeting, signed minutes recording dissent, duties of prudence and a governance system approved by the owner. Articles 11 to 15 set the accounts and audit regime: accounts to international standards showing a true and fair view, an auditor registered with the Ministry and appointed for a renewable year, an audited balance sheet approved by the owner within four months of the fiscal year-end (failing which the director applies to the authority within 7 days and the owner has 10 days to decide), and the auditor's report read at the general meeting.

Article 16 governs new partners and inheritance: prior authority approval, continuation on the owner's death with a manager appointed by the heirs within 6 months, and conversion to a multi-member LLC once partners are admitted. Article 17 requires a general meeting within four months of the year-end, called 21 to 30 days in advance. Article 18 requires approved cash dividends to be paid within 30 days. Article 20 lets a director approve related-party dealings below 5% of capital and sends larger ones to the general meeting with the interested party not voting.

Article 22 modifies the joint-stock rules for all LLCs: secret-ballot election of board members unless the memorandum says otherwise, related-party deals above 3% of capital needing general-meeting approval and an updated register of such deals disclosed in the annual report. Article 23 gives supervision to the local authority.

Who it applies to

Every mainland limited liability company incorporated under Federal Decree-Law No. 32 of 2021, and in particular single-owner LLCs, together with their owners and shareholders, directors and boards, auditors and the emirate licensing authorities that register and supervise them.

Contents

English official text in 24 articles. Open the full text or jump to a provision:

1. Article 1 — Definitions
2. Article 2 — Applicability of the Resolution
3. Article 3 — Provisions Governing the Incorporation of a Limited Liability
4. Article 4 — Memorandum of Association of a Limited Liability Sole Proprietorship
5. Article 5 — Procedures for Incorporating a Limited Liability Sole Proprietorship
6. Article 6
7. Article 7 — Management of a Limited Liability Sole Proprietorship
8. Article 8 — Meetings of the Board
9. Article 9 — Identifying the Functions and Duties of the Executive Management
10. Article 10 — Governance
11. Article 11 — Accounts of the Company
12. Article 12 — Appointment of the Auditor
13. Article 13 — Powers of the Auditor
14. Article 14 — Approval of the Balance Sheet
15. Article 15 — Annual Report of the Auditor
16. Article 16 — Sale of Shares and Admission of Partners
17. Article 17 — Calling for a General Meeting
18. Article 18 — Distribution of Profits
19. Article 19 — Introduction of Items to the General Meeting Agenda
20. Article 20 — Deals with the Relevant Parties
21. Article 21 — Application of the Provisions of Limited Liability or Joint-Stock
22. Article 22
23. Article 23 — Monitoring the Implementation of the Resolution
24. Article 24 — Publication and Entry into Force

Key provisions

Obligations and deadlines

• Hold the annual general meeting within four months of the fiscal year-end, with 21 to 30 days' notice.
• Appoint a Ministry-registered auditor each year and have the audited accounts approved within four months of the year-end.
• Pay approved cash dividends within 30 days of the approval.
• Obtain the licensing authority's prior approval before admitting a new partner to a single-owner LLC.
• Keep the memorandum, its amendments and the statement of owner contributions at the head office.

Penalties

None in this Resolution. Breaches of its accounting, audit, general-meeting and register requirements are fined under the Commercial Companies Law penalty schedule, Cabinet Resolution No. 102 of 2022.

History and citations

“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.

Related instruments

Related Polaris services

• Mainland Company Formation UAE
• Corporate Secretary Services
• Audit Support & Preparation