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Public Joint Stock Company Abu Dhabi

Article (64) of Federal law No. (8) of 1984 concerning commercial companies defined a public joint stock company as that whose capital is divided into equal value negotiable shares and in which a partner is only liable up to the extent of his share in the capital.

Any joint stock company should have a name derived from its purpose and showing the statement (PUBLIC JOINT STOCK COMPANY).

The capital of a joint stock company should not be less than (Dhs.10) million. Its memorandum and articles should also be identical with the form prepared by the Ministry of Economy & Commerce, whereas the share value should not be less than one Dirham and not more than (100) Dirhams. However, the company share should be nominal and negotiable but not issued to holder.

INCORPORATION  PROCEDURES

1- The founder members who may not be less than ten should elect from among themselves a committee of not less than three and not more than five members In order to implement the Incorporation formalities through presenting a pertinent application to the esteemed Executive Council to which the following should be attached:

The memorandum and articles of association prepared In conformity with the form of the Ministry and both signed by all founders and authenticated before the Notary Public.

A feasibility study on the company activity and the proposed time for implementation.
Approved trade name and the premises lease contract.

2- Upon a decision by the esteemed executive Council a committee should be formed to Include representatives from the Ministry of Economy and Commerce and the Abu Dhabi Executive Council in order to view the application and prepare a pertinent report within a couple of weeks from the date of application submission, providing that it must fulfill all the requirements and documents that may be requested by the committee. The Abu Dhabi esteemed Executive Council will, then take a decision on the application. The decision is thereafter promulgated in the official gazette on the founder's expense, and notified to the Ministry of Economy & Commerce within (60) days from the date of promulgation, and In the light of the outcomes included in the Committee's report, otherwise the application shall be considered refused.

3 The founder members must subscribe to a minimum of 20% and a maximum of 45% of the fixed capital of the company. They also must, before Inviting to public subscription, present to both the Ministry of Economy & Commerce and the esteemed Executive Council a certificate from the bank where the capital was deposited.

4- The founder members shall, within (15) days from the data of the decision Issued on the company incorporation, commence the public subscription procedures through a publication to be issued in two local Arabic daily newspapers. The publication must appear (5) days at least before the date of subscription which should be conducted through one bank or more of those operating In the Emirate.

5- Whoever is willing to subscribe in the company's share should pay at least one fourth of the nominal value of each share at the time of subscription, providing that the balance of the value should be paid up within a period not exceeding five years from the date of incorporation and the paid amount of each share value should be effected in the share.

• Subscription should remain open for a period of not less than ten days and not more than (90) days. However, the company incorporation may not be considered complete unless all its shares are subscribed to.

• If the subscription is not completed during this period, the founders may, upon the consent of the Executive Council and by a decision to be taken by the Minister of Economy & Commerce, either rescind the incorporation and pay back the shares value to the subscribers, or reduce the capital of their company, a case in which the subscribers may rescind their subscription within a period of not less than the period of initial subscription, i.e. (90 days) otherwise their subscription will be final. However, the founders may re- offer rescinded shares to a new public subscription after reducing the company's capital.

Note..

•  Without prejudice to the above provisions, the founder members may, in addition to their allowed percentage of 20 - 45 %, subscribe to the remaining shares that were not subscribed to providing that such over - subscription by them will remain subject to approval by the esteemed Executive Council and the Minister of Economy & Commerce as well.

• However, if the subscription exceeds the number of shares offered, the shares must be proportionately distributed among subscribers, providing that each one of them should have the option of getting such allocated shares whatever was the number of shares he initially subscribed to.

• The bank at which the subscription was conducted, should deposit the amounts received from the shareholders for the account of the company under incorporation as a preliminary step. The bank may thereafter deliver the amounts mentioned hereinbefore to the company's board of directors once the company is duly registered in the Commercial Register and licensed by Abu -Dhabi Municipality Department and Abu Dhabi Chamber of Commerce & Industry.

6- Within thirty days after the closure of subscription, the founder members should call the subscribers to a first general assembly meeting. a copy of the invitation should be sent to both the esteemed Executive Council and the ministry of Economy & Commerce.

In case the period mentioned in this paragraph above expires with failure by the incorporators to make such a call to the first general assembly meeting, the Ministry of Economy & Commerce must make the call instead. The quorum for the first General assembly meeting will not be achieved unless upon attendance by the holders of three quarters of the paid up shares or their representatives. In case of failure to meet the above quorum, the founder members should call to a second general assembly within thirty days from the date of the first meeting. The second assembly quorum will be achieved upon presence of those holders of 50% of the total company shares or their representatives. Otherwise, all or any of the shareholders present, shall have the right to demand the dissolution of the company or to call to a third meeting within (15) days from the date of the second meeting. At the third meeting, the quorum will be achieved by the attendance of any number of subscribers.

Resolutions of the first general assembly will be adopted by an absolute majority of the shares represented at the assembly. Both the Ministry and the competent authority shall have the right to send one or more representatives to attend the meeting as observers without the right to vote, but whose attendance shall be recorded in the minutes of the assembly. The said minutes shall, however, contain decisions in the following matters:

1. Giving opinion on the founders report concerning incorporation formalities of the company and incurred expenses.
2. The election of the first board of directors for a period of not more than three years and with a number varying between three and fifteen.
3. Appointment of auditors.
4. Ratification of the valuation of stocks in kind, if any.
5. Declaration of the completion of the company incorporation.

The decisions in this meeting shall be taken by the majority vote represented in it.

7- After that, the founder members committee shall, within seven days from the date of the first general assembly, present a request to the Ministry of Economy & Commerce to declare the company incorporation. The Ministry shall, thereafter, issue a resolution declaring the company incorporation within thirty days from the date of request. The resolution decreed shall, thereafter, be promulgated in the Official Gazette together with the memorandum and articles of association of the company. The board of directors should, within fifteen days from the date of declaring the company incorporation, apply for registration in the Commercial Register and for acquiring the Membership Certificate from Abu Dhabi Chamber of Commerce & Industry, as well as the Municipality license.

However, despite that the procedures required for incorporating a joint stock company has been already identified, yet the Federal law No. (8) also provided for another type which is the Private Joint Stock Company. The special difference between the two types is that in the public joint stock company the founder members subscribe in certain number of shares and float the rest to public subscription, whereas in the private joint stock, the founder members should subscribe to the whole shares and close the door before the Public.