Dubai Creative Clusters Private Companies Regulations 2016chapter by chapter

Regulation 4.3Section 1 - Application of the Law

Companies/branches previously governed by the Repealed Regulations (the 2003 DTMFZA Private Companies Regulations and related decisions) must, within 12 months of the Effective Date, correct their legal status and documentation (including Articles as necessary) to come into compliance with these Regulations.

Regulation 9.2Section 3 - Registration of Companies

An application for Registrar consent to register a company must include prescribed form/manner details, first directors' (and secretary's, if applicable) details, the company's articles, the registration fee, and any other information the Registrar requires.

Regulation 12.3Section 3 - Articles of Association

Where a company does not adopt the Registrar's Standard Articles, its filed articles must at minimum address the matters listed in Regulation 12.3 (name/FZ-LLC suffix, limited liability, objects, duration, share capital in AED, share classes, transfer rights, AGM requirement, quorum, director appointment/removal, directors' powers, minute-keeping, and other listed matters), and must not conflict with the Regulations.

Regulation 13Section 3 - Amendment of the Articles of Association

A company may amend its articles only by special resolution, and the amendment takes effect only once accepted for registration by the Registrar.

Regulation 15Section 3 - Copies of Articles for Members

A company must, on a member's request, send that member a copy of the articles (a reasonable fee may be charged).

Regulation 16Section 3 - Company Name

A company must not be registered (or renamed) with a name the Authority considers undesirable, including names identical/confusingly similar to existing registered names, names suggesting patronage of prominent persons or government/authority connection, names using reserved words (Dubai, Emirates, UAE, cluster names, etc.) without approval, names not ending in 'FZ-LLC', or names infringing IP rights.

Regulation 17Section 3 - Change of Company Name

To change its name, a company must pass a special resolution, obtain Registrar approval of the proposed name, amend its Articles, publish a Change of Name Notice in two Dubai daily newspapers (one Arabic, one English), and wait at least 14 days before the Registrar enters the new name and issues a certificate of change of name.

Regulation 18.5Section 3 - Register of Companies

Whenever any detail on the register of companies changes (e.g. directors, registered office, general manager, secretary, share capital, members, financial year end), the company must file a notice of change with the Registrar within 14 days of the change, using the prescribed form.

Regulation 25.2Section 4 - Company Share Capital Requirements

A company may not create or issue shares denominated in a currency other than AED without the Registrar's consent.

Regulation 25.5Section 4 - Company Share Capital Requirements

The Registrar may require details of all members (identity confirmation, bank/professional references, and other information) to verify that share capital monies are from a verifiable, legal source, consistent with applicable Central Bank/AML law.

Regulation 26.5Section 4 - Nature of Shares

A company must not issue bearer shares.

Regulation 27.1Section 4 - Classes of Shares

A company may only divide its share capital into different classes of shares, or issue new shares of a different class, with the Registrar's consent.

Regulation 30.2-30.3Section 4 - Power to Issue Shares

Where shares are issued for non-cash consideration, the directors must determine the present cash value using reasonable evidence, pass a resolution confirming the issuance does not breach the Regulations, and the company must issue the shares within two weeks of that resolution.

Regulation 31Section 4 - Power of Company to Purchase own Shares

A company may purchase its own shares (including redeemable shares) only with prior ordinary resolution approval (unless wholly-owned subsidiary), must record itself as the registered member holding such shares, and must not exercise voting/distribution rights on treasury shares.

Regulation 33.4Section 4 - Reduction of Share Capital

A capital reduction requires a special resolution supported by a solvency statement, publication of a reduction notice in two Dubai daily newspapers (one Arabic, one English) within 15 days of the resolution, and filing with the Registrar (special resolution, solvency statement, notice copies) within 30 days of the resolution, followed by a Registrar confirming order.

Regulation 34.5Section 4 - Creditors Entitled to Object to Reduction

Following a capital reduction taking effect, the company must file an amendment to its Articles with the Registrar within 14 days.

Regulation 35Section 4 - Solvency Statement

Where a solvency statement is required (e.g. for share redemption or capital reduction), each director must state, based on reasonable evidence and considering all liabilities, that the company can pay its debts, in the Registrar-prescribed form, dated and signed by each director.

Regulation 36.2Section 4 - Transfer of Shares

A company must not register a share transfer unless a signed instrument of transfer has been delivered to it and the transfer has been accepted by the Registrar and entered on the register of companies.

Regulation 38.1Section 4 - Register of Members

A company must maintain an up-to-date register of members recording names, date of birth/incorporation, nationality, address, number/value/class of shares held, shareholding percentage, pledge details, and dates of becoming/ceasing to be a member and of any shareholding changes.

Regulation 38.4Section 4 - Register of Members

Whenever any register-of-members detail changes, the company must file a notice of change with the Registrar within 14 days, using the prescribed form.

Regulation 38.5Section 4 - Register of Members

The register of members must be open for inspection by members free of charge, and by other persons on payment of a reasonable fee, during business hours at the registered office (or wherever an agent maintains it).

Regulation 40.1-40.2Section 4 - Share Certificates

A company must issue share certificates free of charge to each member, and must have certificates for any issued or transferred shares ready for delivery within 14 days of the issue or transfer.

Regulation 41Section 4 - Dividends and Distributions

A company may only distribute from profits available for the purpose, and no dividend/distribution may be declared or paid unless the directors resolve, on reasonable grounds, that the company will be able to pay its debts as they fall due immediately afterward.

Regulation 43.2-43.3Section 5 - Pledge of Shares

A share pledge must be registered in the Security Register within 14 days of executing the pledge agreement (following written agreement, value given, delivery of share certificates, and endorsement/register-of-members entry), or the pledge is void.

Regulation 46.4Section 5 - Registration

Whenever there is a change in the details filed for a share pledge, the pledgee must file a notice of the change with the Registrar within 14 days of the change.

Regulation 49.1Section 5 - Release

The pledgee must file for termination of a share pledge filing within 10 days of the pledge's release in accordance with the pledge agreement or law.

Regulation 51.2-51.3Section 6 - Registered Office of a Company

A company must at all times have a registered office in the zone, and must notify the Registrar of any change of registered office within 14 days of the board resolution making the change (effective only upon Registrar registration).

Regulation 53Section 6 - Publication of Name and Registered Office of Company

A company must display its name and registered office in legible characters on all business letters, notices, official publications, negotiable instruments, invoices, receipts and letters of credit.

Regulation 54.1Section 6 - General Meetings

A company must convene a meeting of members (the annual general meeting) at least once every calendar year, unless it has only one member (in which case a signed resolution substitutes).

Regulation 55.1-55.3Section 6 - Notice of Meetings

General meetings must be called on at least 21 days' written notice (unless a 95% short-notice waiver applies), stating time/place/date, the general nature of business, any proposed resolutions, and including copies of accounts/auditor's report to be laid before the meeting.

Regulation 61Section 6 - Minutes of Proceedings

A company must cause minutes of all general meetings, class meetings and directors' meetings to be entered in books kept for that purpose, recording attendees, signed by the person presiding, and kept at the registered office.

Regulation 62.1-62.2Section 6 - Inspection of Minute Books

Minute books must be open for inspection by members/directors free of charge during business hours, and copies must be provided within 7 days of a written request and payment of any reasonable fee.

Regulation 63.1-63.2Section 6 - Maintenance of Accounting Records

A company must keep proper accounting records covering money received/expended, goods sold/purchased, and assets/liabilities, kept at the registered office and open to inspection by members, officers, or the auditor.

Regulation 64.1Section 6 - Duty to Prepare Company Financial Statements

The directors of every company must cause financial statements to be prepared for each financial year.

Regulation 65.1, 65.5Section 6 - Financial Statements to be Laid Before General Meeting

Within 6 months after financial year end, directors must lay the financial statements and auditor's report before the AGM, and the company must file a copy of both with the Registrar within 7 days after the AGM.

Regulation 66.1Section 6 - Right to Receive Copies of Financial Statements

A copy of the financial statements and related required documents must be made available to every member, generally at least 7 days before the general meeting.

Regulation 67.1, 67.9-67.10Section 6 - Appointment of Auditor

Members must appoint an auditor by ordinary resolution at each AGM (or directors before the first AGM), and the company must file a notice of appointment (immediately upon appointment) and of cessation (immediately upon resignation/removal) with the Registrar.

Regulation 68.1-68.2Section 6 - Audit

The company's auditor must examine the financial statements and report to members per generally accepted auditing principles, including an opinion on regulatory compliance and true-and-fair view.

Regulation 70.9Section 6 - Election of Directors

Where a director resigns, the general manager must, within 14 days of the resignation notice, update the register of directors and officers and send a copy of the resignation notice to the Registrar.

Regulation 74.1Section 6 - Company General Manager

Every company must have a general manager, a natural person, whose name appears on the trade licence.

Regulation 74.8Section 6 - Company General Manager

The general manager is liable for maintaining the register of members and register of directors and officers, and for the accuracy of their contents, unless the articles provide otherwise.

Regulation 76Section 6 - Direction Requiring Company to Make Appointment

If the Registrar directs a company to remedy a breach of the requirement to have at least one director or a general manager, the company must make the necessary appointment(s) and file the Registrar notice before the deadline stated in the direction (1-3 months).

Regulation 77.1, 77.3Section 6 - Register of Directors and Officers

A company must keep at its registered office a register of directors and officers (name, date of birth, nationality, address for each), and file a Registrar notice of any change within 14 days.

Regulation 78.1Section 6 - Duties of Directors and Officers

Directors and officers must act honestly, in good faith and lawfully in the company's best interests, exercise reasonable care/diligence/skill, comply with the Regulations/Articles/service contracts, and only exercise powers for their conferred purposes.

Regulation 79Section 6 - Declaration of Interest in Existing Transactions or Arrangements

A director with a direct or indirect interest in a company transaction/arrangement that conflicts or may conflict with the company's interests must declare the nature/extent of the interest to the other directors as soon as practicable, either at a directors' meeting or by written notice, and must not vote on or be counted in quorum for the related resolution.

Regulation 80Section 6 - Prohibitions of Financial Assistance to Directors

A company must not provide financial assistance (loans, guarantees, credit facilities, etc.) to a director (or connected spouse/child/controlled company) unless 90% member consent is obtained and all directors resolve the assistance does not materially prejudice the company/members or its ability to pay debts, with the resolution documented in writing and recorded in signed board minutes before the assistance is given.

Regulation 81.2Section 6 - Exemption, Indemnification and Liability of Officers and Auditors

A company must indemnify each director, officer or auditor in respect of liability incurred in defending proceedings, to the extent permitted by law.

Regulation 83-85Section 7 - Amalgamation of Companies

Companies (and, where applicable, foreign corporations) may only amalgamate with the Registrar's consent, following a prescribed application including board/member resolutions, a solvency/creditor-protection declaration, and supporting documentation.

Regulation 88.3Section 8 - Investigation of the Affairs of a Company

A person (including a director, officer, auditor or agent) whom Registrar-appointed inspectors suspect holds relevant books, records or information must produce them, attend and answer questions, and give reasonable assistance to the investigation.

Regulation 90.1Section 9 - Overseas Companies and Companies Incorporated outside of the Zone

An overseas company must not engage in or carry on (or purport to carry on) any trade or business activity in the zone unless registered as a branch or issued a certificate of continuation.

Regulation 91.1Section 9 - Registration of Branches

An overseas company establishing a branch must submit a Registrar application with the prescribed fee, constitutional documents, 2 years' (or available) audited accounts, a member/board resolution to establish the branch, and a power of attorney for the branch's principal representative.

Regulation 93.1Section 9 - Requirements of a Branch

A branch must appoint and retain at all times a person authorised to accept service of documents, maintain a place of business in the zone, and submit a copy of its annual return (filed in its home jurisdiction) to the Registrar annually.

Regulation 94.4Section 9 - Register of Branches

Whenever a branch's register-of-branches details change, the branch must file a Registrar notice of change within 14 days.

Regulation 95.1Section 9 - Records to be Kept by Branches

A branch must keep, at its principal place of business in the zone, records of its acts and financial affairs adequate to show the trade or business it conducts or has conducted in the zone.

Regulation 96.1Section 9 - Letterheads and Service of Process: Branches

A branch's business letters from the zone must show its full licensed name, the parent overseas company's registered office/place of incorporation, and its principal zone place/address.

Regulation 97.3Section 10 - Continuation Inside the Zone

An overseas company continuing into the zone must, within 3 months of the provisional certificate of continuation, file a Certificate of Cessation (evidencing it has ceased incorporation in its former jurisdiction) and return the provisional certificate to the Authority.

Regulation 98.3Section 10 - Continuation Outside the Zone

A company continuing out of the zone must, at least 45 days before applying, publish a notice for at least 3 consecutive days in two Dubai daily newspapers (one Arabic, one English), and the destination jurisdiction's law must preserve its property/rights/liabilities and litigation status.

Regulation 100.1Section 11 - Deregistration of a Company

Where the Authority notifies a company of intended deregistration for a contravention (e.g. ceasing zone business), the company must, within 3 months, provide a reasonable justification to avoid deregistration.

Regulation 101.1Section 12 - Voluntary Winding Up

A company's members may voluntarily wind up the company by special resolution, following the Commercial Companies Law dissolution process (with the Authority and register of companies substituting for the competent authority/commercial register).

Regulation 103.3Section 13 - Form of Registers

Adequate precautions must be taken to guard against falsification of company registers/records and to facilitate discovery of any falsification; non-legible-form records must be reproducible in legible form.

Table Item 1Table of Penalties - Table Item 1

Conducting or attempting to conduct business operations without a valid certificate of incorporation/registration and licence. Applicable penalty: AED 20,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 2Table of Penalties - Table Item 2

Engaging in or carrying on (or purporting to carry on) any trade or business activity in DCC without a registered branch or a certificate of continuation. Applicable penalty: AED 20,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 3Table of Penalties - Table Item 3

Engaging in activities or continuation outside DCC without complying with the necessary requirements. Applicable penalty: AED 20,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 4Table of Penalties - Table Item 4

Failure to comply with the Registrar's direction to change the name of the company. Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 5Table of Penalties - Table Item 5

Issuing bearer shares without the Registrar's consent. Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 6Table of Penalties - Table Item 6

Failure or refusal to provide documents and accounting records for the Authority's inspection within the stipulated time. Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 7Table of Penalties - Table Item 7

Failure to comply with share pledge requirements. Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 8Table of Penalties - Table Item 8

Failure to maintain a registered office/location/postal address. Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 9Table of Penalties - Table Item 9

Failure to comply with the Authority's instruction/direction to conduct an AGM, appoint at least one director, or appoint a General Manager. Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 10Table of Penalties - Table Item 10

Failure to file with the Authority a copy of the audited financial statements from an approved auditor within 14 days after the AGM (or any other Authority-stipulated timeline). Applicable penalty: AED 10,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 11Table of Penalties - Table Item 11

Failure to obtain the Registrar's consent to divide share capital into different classes or issue new shares. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 12Table of Penalties - Table Item 12

Failure to obtain the Registrar's prior approval to issue shares for non-cash consideration. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 13Table of Penalties - Table Item 13

Failure to register a share transfer with the Registrar. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 14Table of Penalties - Table Item 14

Failure to have the registered company name and/or details on certain company documents. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 15Table of Penalties - Table Item 15

Failure to comply with generally accepted accounting principles/standards approved or prescribed by the Registrar in preparing the company's accounts. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 16Table of Penalties - Table Item 16

Failure to notify the Registrar within 14 days of a Director's/General Manager's resignation. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 17Table of Penalties - Table Item 17

Conducting or attempting to conduct business without full compliance with the Amalgamation requirements. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 18Table of Penalties - Table Item 18

Failure to comply with the Authority's Deregistration Notice. Applicable penalty: AED 7,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 19Table of Penalties - Table Item 19

Failure to obtain the Registrar's prior approval to change the currency of share capital. Applicable penalty: AED 5,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 20Table of Penalties - Table Item 20

Failure to file changes made to the Register of Members with the Registrar within 14 days. Applicable penalty: AED 5,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 21Table of Penalties - Table Item 21

Failure to issue and deliver share certificate(s) within 14 days. Applicable penalty: AED 5,000 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 22Table of Penalties - Table Item 22

Failure to comply with regulatory requirements for the reduction of share capital. Applicable penalty: AED 2,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 23Table of Penalties - Table Item 23

Failure to keep and maintain a Register of Members. Applicable penalty: AED 2,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Table Item 24Table of Penalties - Table Item 24

Failure to comply with the requirements for distribution of dividends. Applicable penalty: AED 2,500 (doubled if the same contravention is repeated within one year; the Authority may additionally revoke/cancel/suspend the licence or activity, deregister the company, or apply to court for compulsory winding-up).

Private Companies Regs Reg 47Pledge assignment filing

A pledge assignment or transfer must be reported to the Registrar within 14 days, or it will be deemed void.

Private Companies Regs Reg 97Continuation into the zone

An overseas company can continue in the zone by applying to the Registrar and must provide proof of cessation in its home jurisdiction.

Private Companies Regs Reg 98Continuation out of the zone

A company may apply to continue overseas if foreign law preserves its status; it must publish notice 45 days prior to application.

Private Companies Regs Reg 99Documents in English; refusal

Documents submitted to the Authority must be in English or have a certified translation; the Registrar may refuse consent for continuation without explanation.

Private Companies Regs Reg 100Deregistration by the Authority

The Authority may deregister a company for non-compliance or business cessation, allowing a 3-month justification period before removal.

Private Companies Regs Reg 101Voluntary winding up

Members must pass a special resolution to voluntarily wind up a company, following the Commercial Companies Law process, with the Authority acting as the competent authority.

Private Companies Regs Reg 102Compulsory winding up

The Authority can apply to the court for compulsory winding up of a company that has violated regulations or other applicable laws.

Private Companies Regs Regs 36-37Share transfers

Shares can be transferred via a signed instrument delivered to the company, pending Registrar acceptance and entry in the register of members.