Company Registration Amendments FAQs

Transcription

1 Company Registration Amendments FAQs Table of Contents Company Registration Amendment... 2 Share Transfer... 3 Increase in Share Capital... 3 Publication Requirements... 4 Company Closure... 5 Update Corporate Documents... 7 Share Pledge Registration... 7 Change of Company Name and Operating Name... 8 Company Registration Amendment FAQs Issue Date: 13/08/2017 Version 1.0

2 Company Registration Amendment 1. What is a Registration Amendment? Registration amendment is an amendment to the corporate / management and share structure of a company. It is mandatory for any of these changes to be registered with DMCC. Registration amendment includes the following: Share Transfer Increase / Decrease in Share Capital Change of Company Name Change of Operating Name Change of Parent Company Name (of Branch Companies) Change of Officers (Director, Manager, Secretary & Legal Representative) Change of Financial Year Company Termination Amendment to the provisions of the Company s MOA/AOA Change in the details of the Shareholders (name, nationality & address) Change in the details of the company s officers (name, nationality & address) Status Conversion (conversion from branch to a subsidiary company) Amalgamation 2. Which companies can apply for Registration Amendments? DMCC Company holding a valid license can apply for any registration amendments. 3. What are the types of powers being exercised by the officers of the company? All company officers have inherent powers as mandated by the Company s Articles of Association. The powers can be exercised either: Singly (can act and represent the company alone). Jointly (powers / authorities will be exercised together with another officer). Limited (powers / authorities to be exercised are limited as indicated in the Resolution appointing officers to such posts). Company Registration Amendment FAQs Issue Date: 13/08/2017 2

3 Share Transfer 4. Who should sign the share transfer document (share transfer form)? All shareholders or their Power of Attorney holders (POA holders) / authorised signatories must sign the share transfer document, including shareholders whose shares are not affected by the change. 5. Can a Power of Attorney holder (POA holder) who is also the buyer of the shares in the DMCC Company sign the share transfer document on behalf of the person who issued the POA? Yes, as long as the POA clearly mentions that the POA holder is authorised to transfer the shares to him/herself. 6. When the share transfer is completely registered? Share transfer is completely registered upon the issuance of new share certificate/s and the amended MOA/AOA of the company showing the new company share structure. Increase in Share Capital 7. Can the proposed increased share capital be assigned to a new shareholder? No, the proposed increased amount should be issued to the current shareholder/s of the company. It can then be transferred to a new shareholder by way of share transfer. Increase in share capital and share transfer cannot be applied and processed at the same time. 8. Which document is required to confirm that the increase in share capital by way of loan or profit conversion has taken place? Along with the other documents, an interim report confirming that the loan or profit has been converted into new company share capital issued by the company auditor is required. Company Registration Amendment FAQs Issue Date: 13/08/2017 3

4 9. In the case of increase in share capital by cash injection, when should the bank letter be submitted? Upon approval of the application for increase in capital, DMCC issues a letter to the member company allowing the shareholders to deposit the proposed increased capital amount. In order to complete the process, bank letter confirming deposit should be submitted to DMCC. The amount deposited shall remain in the bank account of the company until DMCC issues another letter allowing the release of such amount for the company to use. 10. Can the increased amount deposited in the bank for increase in share capital be withdrawn after the process of increasing the share capital is completed? Yes, DMCC issues a bank release letter addressed to the bank allowing use of the amount by the company. Publication Requirements 11. Which registration amendments requires publication? The following amendments to the corporate and share structure of the company require publication: Change of Company Name, Decrease in Share Capital, License Termination, Status Conversion (converting a branch company to a subsidiary company) Company Termination. 12. What is the period of publication? Publication is done for fourteen (14) calendar days. 13. Where is the publication done? Prior to March 2015, publication was done in a local Arabic newspaper. After March 2015, pursuant to DMCC Regulation number 1 of 2015, electronic publication is now done on the DMCC website. Company Registration Amendment FAQs Issue Date: 13/08/2017 4

5 Company Closure 14. What are the different types of company closure (winding up)? The winding up of the company may either be: i. Summary Winding Up under Regulation of the DMCC Company Regulations: A summary winding up applies in cases where a company either has no liabilities or is able to discharge its liabilities within 6 months, and commences with a statement of solvency. ii. By its creditors under Regulation of the DMCC Company Regulations: A Creditors Winding Up commences when the company passes a resolution for winding up and is followed by a meeting with the company s creditors. iii. By the court under UAE Commercial Transactions Law No. 18 of 1993 (Volume 5, Bankruptcy and Preventive Composition) and other applicable legislation. 15. Why is it mandatory to appoint a liquidator for winding up of a company? It is mandatory to appoint a liquidator for winding up a company as the Liquidator carries out an important duty, by determining the assets and liabilities of the company and settling those liabilities in a proper manner. All powers of the Shareholders / Directors of the company shall cease upon the appointment of the liquidator. The Liquidator shall determine the financial standing of the company at the time of liquidation and shall be responsible in the discharge of the assets and liabilities of the company. All this information will be included in the liquidation report provided by the liquidator during the winding up process. Liquidating a branch company in DMCC will require the appointment of a liquidator unless the branch company does not maintain a separate financial account with its parent company. In such a case, an undertaking letter is mandatory to be submitted. Template of the undertaking will be made available to the client upon application. Company Registration Amendment FAQs Issue Date: 13/08/2017 5

6 16. Who can be appointed as a Liquidator of the company? Any chartered accountant or a law firm registered in the UAE can be appointed as liquidator. The legal registrar may, however prescribe the qualifications required for a liquidator. Individuals cannot be appointed as liquidators. 17. What are the two stages in the liquidation process? Following are the two stages in the liquidation process: First is the termination of the company s license/s. Second is the company deregistration or dissolution. 18. What is the publication requirement and who is responsible for this? A total of 28 days public notification is required during the liquidation process. Fourteen days for each of the stages in the liquidation process. DMCC carries out the publication on the DMCC website as part of the liquidation process. 19. What is the proof that the company has been closed? Official termination letters are issued by DMCC at the end of the process of winding up. 20. Can a Company Termination application be processed without the NOC from DEWA or ETISALAT / DU? No, the company termination cannot be processed without the submission of the NOC from DEWA or ETISALAT / DU. 21. How long does it take to refund the portal balance after the company is terminated? The refund will take approximately three weeks from the date the company has been de-registered from the DMCC registry. A refund request form should be submitted to DMCC along with the company termination documents. Refund can only be done through bank transfer to the account of the registered company shareholder. 22. Does DMCC publish the list of companies terminated by Authority? Yes, publication is part of the process. Company Registration Amendment FAQs Issue Date: 13/08/2017 6

7 Update Corporate Documents 23. Which corporate documents of a shareholding company or parent company needs to be submitted to DMCC? When should these documents be updated? The following corporate documents need to be updated: Notarised Certificate of Good Standing (should be updated annually). Notarised and legalised Certificate of Incumbency or list of officers or authorised signatories (should be updated annually). Ultimate Beneficial Ownership (UBO form) This form is only required in case there are changes in the share structure of the shareholding / main company. (This document does not need to be notarised or legalised). Notarised MOA / AOA or By-Laws (should be updated only in case there are changes). Share Pledge Registration 24. Are shareholders of DMCC companies allowed to pledge their shares? Yes, as per Article 30.4 of the DMCC company regulations, DMCC member companies are allowed to pledge their shares. The shareholders can pledge all or part of the shares that they own in the Company. 25. To whom can the shares be pledged (Individual or a company)? DMCC only registers share pledged to a financial institution such as banks registered and licensed in UAE or in cases of foreign institution, it should have an agent here in UAE, as they have the capacity to secure the pledge. 26. What is the effect of registering a Share Pledge Agreement? Registration of a share pledge agreement creates a valid pledge over the shares of the company and prevents the transfer of the shares without the consent of the pledgee (named beneficiary of the pledge). Company Registration Amendment FAQs Issue Date: 13/08/2017 7

8 27. If the pledger defaults, how does the pledgee enforce the share pledge and take full control over the shares in the DMCC Company? In case of default of the pledger, the pledgee has to take legal action and approach Dubai Courts to enforce the contract. DMCC will act only based on the order of the Dubai Court. Change of Company Name and Operating Name 28. Is the suffix change considered as a company legal name change? No, suffix change is not considered as a company legal name change. DMCC Free Zone Authority mandated that JLT is known as an address only. DMCC companies can obtain a suffix change letter from DMCC. This electronic letter will certify that their JLT Company is the same legal entity, which they can present to any requesting party. 29. If the DMCC Company changed its name, do the employees need to have a new visa stamped with the new company name? This can be done when the visa is renewed. It is not required to immediately change the visa, as certificate of name change will confirm the amendment. 30. Can a member company apply for establishment card amendment after the company name has changed? It is mandatory for the company to apply for establishment card amendment once the company name is changed. 31. Will the operating name replace the actual name of the company and can it used in the company letterhead and stamp? No, the operating name will not replace the actual name of the company. Both company name and operating name (if applied) will appear on the company license. Operating name can be used in the company s letterhead and stamp but it should be highlighted as operating name and the company name should also be mentioned in conjunction to the operating name. Company Registration Amendment FAQs Issue Date: 13/08/2017 8