Dubai Company Share Transfer Service

In a Limited Liability Company (LLC), each shareholder owns a piece of the business. When shareholders opt to sell their shares, modify their ownership stakes, or introduce new shareholders, it constitutes a Share Transfer. This is the process of moving the shares that already exist from one person to another.

To effect a “change in the local partner,” the company must transfer 51% of its shares to a new local partner. At the moment, UAE law says that a local Emirati national should own at least 51% of an LLC or 100% of an Emirati company. Shareholding should maintain the ratio of 49% to 51% in this context. Please note that the new FDI rules allow for a higher percentage or share of foreign ownership.

In the UAE, you can choose to work with or be sponsored by a business instead of a person. If you choose a corporate shareholder, a 100% UAE-owned Local Sponsor or national company owns 51% of the mainland LLC company. An individual, another company, or even a group of foreign investors can own the remaining 49%. This sponsorship model signifies that a company, rather than an individual, supports the business or organization. This is also true if the local partner is working as a National Service Agent (NSA) or a Local Service Agent (LSA) for a branch or establishment in a different country.

There are many reasons why a share transfer is needed. For instance, scenarios such as a shareholder departing the company, inviting a new shareholder, a shareholder’s demise, the company’s sale to a new owner, or the transfer of shares among existing shareholders could occur.

If your LLC is on the mainland of the UAE, you should know that the Commercial Companies Law (Federal Law 2 of 2015 and its amendments) governs how mainland companies in the UAE are run.

If this company is an LLC, there should be a Memorandum of Association (MoA). Its contents should be in line with Articles 42, 43, and 73 of the Commercial Companies Law. The LLC’s Memorandum of Association contains rules governing the sale of shares and the process for shutting down the company. Article 79 of the Commercial Companies Law also says that a partner can give his or her shares to other partners or even to a third party.

It says that a partner can give or lend his share of the business to another partner or to a third party. The company’s Memorandum of Association mandates and necessitates an official document for any transfer or pledge. This action necessitates registration in the commercial register to validate its legality against third parties. Additionally, the relevant authority exclusively performs the registration process. Moreover, this process ensures the validation of legal status against third parties.

The company cannot decline to register such a transfer or pledge. This refusal is only permissible if the transfer or pledge violates the rules in the Memorandum of Association or this Law.