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The UAE has become a preferred destination for global investors because of its modern business infrastructure and ease of doing business. When planning to establish a presence in the country, investors must first determine the right type of business ownership for them. This is vital so they would understand the different requirements in getting a licence, among others.
There are different types of business legal structures in the country to choose from. One of these is private joint stock company, also known as private shareholding company. A joint stock company is a business structure whose stocks can be bought and owned by its shareholders. As its name suggests, a private joint stock company’s shares are exclusive to its private shareholders and cannot be traded to the public.
Establishing a private shareholding firm here requires at least three founders and a minimum capital of Dh2 million. A huge number of its board of directors and the chairman himself must be UAE nationals. The firm is expected to abide by the rules set out for private joint stock firms. However, it can be converted into a public joint stock company provided it meets certain requirements.
It is mandatory for all shareholding firms to hold a yearly general assembly approved by the Ministry of Economy. Firms found flouting the rules outlined in the Commercial Companies Law may face serious consequences.
However, businesses can always hire a business setup firm to take away the hassles off their hands.
• A private shareholding firm needs three founders
• It can be converted into a public shareholding firm
• All joint stock firms must hold general assemblies
Source: Ellen Joyce Soriano, Special to Classifieds
The writer is a freelancer