The UAE Cabinet recently approved a proposal by Sultan Bin Saeed Al Mansouri, Minister of Economy, to extend the period for existing companies in the UAE to comply with Federal Law No 2 of 2015 on Commercial Companies by one more year.
Companies established before the issuance of the new law under Article No 374 were originally given from July 1, 2015 to June 30, 2016, to amend their Memorandum of Association and Articles of Association in compliance with the provisions of this law.
According to article 357, in case of Late Adjustment, companies will be fined Dhs 2,000 per day of delay calculated from the day following the expiry date of the applicable period for such purpose. The second clause of article 374 states that a company will fall under the provisions of the law should it fail to make adjustments within the given period. The Cabinet agreed with the Minister of Economy’s suggestion to allow the companies concerned to adjust their positions according to the provisions of the law within no later than one year.
For this purpose, and based on the UAE Cabinet’s proposal of Minister of Economy, an additional one year has been given for the adjustment of positions, starting from July 1, 2016 and ending 30 June, 2017. During this period companies covered by the new Commercial Companies Law are requested to make the necessary adjustments in accordance with the law’s provisions.