The establishment of a Public Joint Stock Company (PJSC) in the UAE serves as a strategic business approach for companies that want to increase their capital through public stock offerings. The Articles of Association (AOA) stands as a critical legal document which acts as an internal rulebook of the company, stating how it operates, governs itself, and interacts with shareholders.
The following article explains what Articles of Association represent, their significance, required content and how they are regulated under the UAE laws in general specifically Federal Decree-Law No. 32 of 2021 on Commercial Companies. Founders and investors and legal advisors need to understand the AOA because it ensures both legal compliance and operational efficiency.
What Is the Articles of Association?
The Articles of Association of a Public Joint Stock Company in the UAE relate to governance structures within the company, shareholder rights, responsibilities of the board, and operating procedures of the company. It works alongside the Memorandum of Association (MOA); however, while the MOA covers the external objectives of the company, the AOA coves internal management.
The AOA can be viewed as the constitution of the company-it describes how the company takes its decisions, how it holds its meetings, how share transfers occur, and how it distributes profits.
Legal Framework in the UAE
Federal Decree-Law No. 32 of 2021 on Commercial Companies stipulates that the AOA of a PJSC must comply. This decree law provides for the formation, governance, and winding-up of companies in the UAE. Furthermore, PJSCs are subject to the provisions of the Securities and Commodities Authority (SCA) of the UAE, which ensures transparent dealings and investor protection.
The AOA of a public joint-stock company must register with the SCA, then notarized and published in accordance with UAE law.
Key Contents of the Articles of Association
Articles of Association (herein called “the AOA”) constitute the law governing the functioning of the company. Articles of Association for the Public Joint Stock Company for the UAE must contain the following:
- Company Name and Legal Form: Specify the name of the company in full and specify that it is a Public Joint Stock Company.
- Business Objectives: Define the company’s objectives and licensed activities—what it can do by law.
- Share Capital and Structure: Specify total capital, number of shares, value per share, and type of shares (e.g., preferred shares).
- Shareholder Rights: Explain the voting rights, dividends, and procedures for transfer or sell the shares.
- Board of directors: Specify the number of directors, how they are appointed, their powers, and their tenure.
- General Assembly Meetings: Specify how the meetings of the shareholders are called, the manner in which they are to be conducted, and voting procedures.
- Profit Distribution: Explain how profits will be distributed among shareholders and the handling of retained earnings.
- Appointment of Auditors: Set out the procedure of appointing external auditors and defining their duties.
- Dispute Resolution: Mention methods of solving internal disputes-arbitration is usually one of the preferred method of resolving disputes.
- Amendment to AOA:Explain how changes to the AOA can be made—usually needing a special resolution and SCA approval.
Importance of the Articles of Association
The Articles of Association serves as a fundamental operational tool which provides more than legal compliance.The AOA serves following essential purposes which include:
- Helps businesses maintain legal compliance with UAE company law.
- Protects the rights of shareholders.
- Establishes clear definitions for governance roles and their corresponding duties.
- Helps organizations maintain clear visibility and maintain responsible conduct.
- Serves as a vital tool for investor confidence growth particularly for companies listed on public exchanges.
A PJSC which lacks a properly drafted and compliant AOA will encounter regulatory fines, shareholder conflicts and operational challenges.
Amending the Articles of Association
A Public Joint Stock Company (PJSC) needs to modify its Articles of Association (AOA) when its business strategy evolves, ownership patterns change or when legal requirements become necessary. The process of modification requires the following steps.
- Board Resolution: The board of directors creates proposed changes which they document with their supporting reasons.
- Shareholder Approval: The General Assembly must approve special resolutions for shareholder approval.
- SCA Consent: The SCA needs to review and approve all proposed modifications.
- Notarization and Filing: The Department of Economic Development (DED) or the relevant licensing authority requires the notarized amended AOA after obtaining approval.
The most common reasons for an amendment include mergers and acquisitions, changes in share capital, or updates to governance policies.
Compliance Guidelines for Founders and Directors of PJSC
To ensure that Articles of Association conform to the UAE legal standards:
- Use the SCA’s prescribed forms during incorporation and amendment.
- Ensure that all board members are eligible in terms of UAE law.
- Mention provisions for compliance with AML (Anti-Money-Laundering) and counter-terrorism acts.
- Where the company’s activities involve Islamic finance or Shari’a-governed financial products, include provisions for and appoint a Shari’a Supervisory Committee as required by applicable regulatory rules
- Always check with a licensed legal advisor or notary for validation before submission of the document.
How Notary Public Dubai Can Help
The process of creating and modifying Articles of Association for Public Joint Stock Companies in UAE demands both legal expertise, precise documentation and multiple authority compliance. At Notary Public Dubai, we specialize in:
- Drafting and notarizing AOA and MOA documents
- Guiding you through SCA and DED approvals
- Ensuring compliance with Federal Decree-Law No. 32 of 2021
- Availing support for amendment and shareholder resolutions
- Providing bilingual legal documentation (Arabic and English)
Whether you are incorporating a new PJSC or modifying your governance documents, our team will ensure that your paperwork is legally compliant, officially recognized, and suitably tailored for your business needs.
Contact Notary Public Dubai today to get started with your Articles of Association. Simplifying Stress-Free Compliance.