Establish Private Stock Shareholding Company in Dubaikwsmedeveloper
A Private Stock Shareholding Company is a form of Joint Stock Shareholding Company in UAE and it is a company whose capital is divided into negotiable shares of equal value and each partner will therefore be liable only to the extent of his share capital in the firm, according to UAE Commercial Companies Law.
Reason to Establish Private Joint Stock Company in Dubai
Private Joint Stock Company in Dubai is established for the implementation of large industrial projects. This form of company allows the collection in one place of large sums of money and shareholders, which gives a higher capacity to carry out a profitable venture in Dubai.
Another advantage associated with this structure is the great amount of flexibility it offers for the distribution of profits. Moreover, it is easier to borrow from banks through Joint Stock Company, providing therefore access to even greater financial resources.
- Minimum share capital required to form a private joint stock company is AED 2 million and the founders must subscribe all capital.
- Minimum of 3 founders are required to incorporate private joint stock company
- 51% of shares shall belong to UAE national. However in Dubai free zones, the legislation allows for 100% ownership.
- The shares of company are not offered for public subscription
- A private joint stock company cannot conduct professional activities
Conversion of private Joint stock Company to Public Joint stock Company
A Private Joint Stock Company in Dubai is subjected to all the rules regarding Public Joint Stock Company except for the rules and regulations concerning Public Subscription. In order to convert private joint stock company to public one, following conditions must be fulfilled,
- The nominal amount of issued shares is completely paid up
- A period of no less than 2 years has been completed
- During the two years prior to the application for conversion, the company has attained net profits, distributable to the shareholders whose average must not be less than 10% of the capital
- A resolution of the extraordinary assembly for the conversion to public joint stock company is adopted by three quarter of company’s capital.
Procedure to Establish Private Stock Company in Dubai
An approval from Ministry of economy is required to establish this form of business setup in Dubai.
- Application form for commercial license
- Trade Name Certificate
- Certificate for Initial approval
- Valid passport copies of partners
- Copy of commercial license if the owner is a company
- Copy of valid lease contract
- Copy of signature authentication duly attested by Notary Public
- Trade name signboard approved photo which carries calligrapher’s signature, seal and board measurements
- No objection letter by related authorities
- Letter of approval from executive council to incorporate the company
- Copy of Memorandum of Association (MOA) duly attested by Notary Public
- Ministry of Economy decision to form the company
- A certificate form one of the banks in UAE confirming that subscribed capital has been deposited.
All documents should be provided in Arabic. Documents in foreign languages must be translated into Arabic by a legal translator and duly certified (certification by the Ministry of Foreign Affairs and Embassies, for companies incorporated abroad).
Dubai offers immense business opportunities for setting up your company. Our experts at Business Setup Consultant Dubai provide complete business registration as well as support services to all businessmen, entrepreneurs and investors in all phases of establishing their company in Dubai