A number of administrative penalties have been recently introduced following the issuance of a UAE Cabinet resolution. This sets out fines for non-compliance with the UAE Federal Decree by Law No. 32 of 2021 concerning commercial companies (New Companies Law).
The introduction of such a resolution strongly indicates that overseeing UAE Cabinets are taking a much stricter approach to company adherence with the New Companies Law.
Approximate penalties for non-compliance
- Accounting register: Failure to maintain an accounting register – 15,000 AED
- Trade name change: Failure to comply with a decision to change the trade name – A monthly fine of 500 AED reaching a maximum amount of 5,000 AED
- Ownership: Failure to have a required UAE national ownership percentage/ minimum number of Emirati board members, should the LLC carry out activities with strategic significance – 100,000 AED
- Memorandum of Association (MOA): Failure to amend the company MOA to ensure it is in line with the New Companies Law – A monthly fine of 500 AED reaching a maximum amount of 5,000 AED
- Loss disclosure: Failure to call a general assembly should the company amount losses equal to 50% or more of its capital – 50,000 AED
- Data access: Denying shareholders access to minutes of meetings, books and other specific company documents – 5,000 AED
- Board meetings: Failure to invite a director or board member to a board meeting – 3,000 AED
- Refusal of information/ misleading information: Refusal, concealment or failure to provide misleading information to authority inspectors – 5,000 AED
- Share disposal: Disposal of shares in violation of the New Companies Law – 20,000 AED
- General assembly: Failure to call an annual general meeting – 5,000 AED which increases to 10,000 AED if requested by the Ministry