| Recently, the UAE Cabinet issued a resolution that stipulates penalties for violating the UAE Federal Decree by Law No 32 of 2021 concerning Commercial Companies (“Commercial Companies Law”). |
| This applies to all UAE onshore or mainland companies, including Limited Liability Companies (LLCs). Penalties for Non-Compliance · Accounting Registers: A fine of AED 15,000 for failing to maintain accounting registers. · Trade Name Change: A monthly fine of AED 500 for failing to comply with the decision to change the trade name, with a maximum annual amount of AED 5,000. · Ownership: When the LLC carries out activities with strategic significance, it may face a fine of AED 100,000 for non-compliance with the required UAE national ownership percentage or minimum number of Emirati board members. · Memorandum of Association: A fine of AED 1,000 on the director or chairman of the board for not having updated the MOA as per the Commercial Companies Law. · Loss Disclosure: A fine of AED 50,000 will be given to the director, chairman of the board, or their representative when a general assembly is not called to disclose losses equal to 50% or more of its capital. · Data Access: A fine of AED 5,000 for refusing access to minutes of meetings, books, and other related transaction documents with respect to shareholders. · Board Meetings: A fine of AED 3,000 for failing to invite a director or board member to a board meeting. · Refusal of Information or Misleading Information: AED 5,000 fine on the director or chairman of the board of directors of the LLC, their representative, or the auditor upon refusal, concealment or providing misleading information to authority inspectors. · Penalties for Share Disposal: A fine of AED 20,000 may be imposed on any individual who disposes shares in violation of the Commercial Companies Law. · General Assembly: The director or chairman of the LLC board may be fined AED 5,000 for failing to call the annual general assembly meeting, with a fine of AED 10,000 for failing to call the meeting when requested by the Ministry. The implementation i suggests that authorities are considering a stringent examination of companies’ adherence to the Commercial Companies Law. so thoroughly assess your corporation’s practices to minimise the likelihood of fines due to non-compliance. Companies Are Required to Achieve 1% Emirationsation by 1 July 2023 to Avoid Penalties – The penalties for private companies that fail to meet Emiratisation targets under the amended scheme will now be imposed ‘semi-annually‘. – Firms that don’t achieve the 1 per cent Emiratisation target growth by 1 July 2023 will be fined Dh7,000 for each UAE national who has not been hired. – Violating companies will be charged from 1 July 2023. – Private firms are now required to increase the number of Emiratis in skilled jobs by 1 per cent every six months, while remaining on track to achieve the overall 2 percent target by the end of the year. – The penalties for non-compliance from 2022 will continue to be collected. |
New Penalties for violating the UAE Federal Decree by Law No 32 of 2021 concerning Commercial Companies (“Commercial Companies Law”).
February 9th, 2023 by Leave a reply »
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