Part 2- IHC FZLLC Special Regulations
Chapter 2- Capital and Shares
Section 1- Capital and Shares Requirements:
Article 1- Minimum Capital
a- The minimum issued share capital of the FZLLC shall be fifty thousand Dirhams (AED 50,000).
b- The Capital of the FZLLC must be divided into Shares of a minimum value of one thousand Dirhams (AED 1,000) each.
c- A Share must be paid in full by a Shareholder when allotted.
d- Each Share must have a distinctive serial number.
e- The FZLLC may not issue bearer shares.
f- The FZLLC may not issue fractional shares.
Article 2- Cash Subscription
a- The Shares of the FZLLC are issued Shares.
b- Unless the Authority otherwise specifically approves, all capital of the FZLLC shall be subscribed in cash only.
Article 3- Declaration of Minimum Capital and Deposit in the Bank
a- The Shares in cash shall be deposited in a bank operating in the UAE.
b- Shareholders shall declare that they have subscribed the minimum shared capital.
Article 4- Shares Features
a- The Shares shall be of one class, with all Shares being of an equal value, and all Shares holding the same rights as to voting at a General Meeting, dividends, redemption, and distributions.
b- The FZLLC may, subject to the consent of the Authority, create different classes of Shares by providing them in the AOA.
c- The FZLLC may divide its Shares into several classes and attach thereto respectively any preferential, deferred, qualified or special rights, privileges or conditions, by amending the MOA and AOA, which must be approved by:
- A Special Resolution, or by a resolution passed by a greater percentage majority of Shareholders with voting rights as may be prescribed in the MOA and AOA; or
- A resolution passed by all the Shareholders holding Shares of the class whose rights are being varied or abrogated.
- For avoidance of doubt, notwithstanding anything in the MOA or AOA of the FZLLC, no Shareholder shall be bound by any amendment to the MOA or AOA that increases his/her liabilities or the liabilities attached to his/her Shares or that decreases the rights attached to his/her Shares, unless such Shareholder has signed a resolution imposing such liabilities or decreasing rights attached thereto.
Section 2- Alteration of Capital
Article 1- Increase of Capital
a- The FZLLC may, by a Special Resolution or by a resolution passed by a greater majority of Shareholders with voting rights as prescribed in the MOA and AOA, increase its capital by issuance of further Shares.
b- The Resolution for the increase in capital must be notified to the Authority within four (4) Working Days of being passed. The increase in capital of the FZLLC will come into effect once the Authority’s Register of the FZLLC reflects the same.
Article 2- Consolidation and Division of Shares
a- The FZLLC may, by a Special Resolution or by a resolution passed by a greater percentage of Shareholders with voting rights as may be prescribed in the MOA and AOA, consolidate and divide the Shares into:
- A lesser number of Shares than before the consolidation, resulting in an increase in the value of each Share; or
- A greater number of Shares than before the consolidation, resulting in a decrease in the value of each Share.
b- The resolution for the consolidation or division of Shares must be notified to the Authority within four (4) Working Days of being passed. The consolidation or division of Shares will come into effect once the Authority’s Register of the FZLLC reflects the same.
Article 3- Reduction of Capital
a- The FZLLC may, if authorized by a Special Resolution or by a Resolution passed by a greater percentage of Shareholders with voting rights as may be prescribed in the MOA and AOA, with or without extinguishing or reducing liability on its shares, decrease its capital by:
- Cancelling paid up Share capital due to a loss sustained by the FZLLC or due to underrepresentation by the available assets of the FZLLC.
The loss sustained by the FZLLC or the capital that is unrepresented by available assets of the FZLLC should be confirmed in a report of an auditor.
- Reducing the number of the Shares by reimbursing part of the value to the Shareholders.
- Acquiring its own Shares and then cancelling or holding these Shares as treasury Shares.
b- The FZLLC must, within fourteen (14) days of passing the resolution to decrease its capital, publish a notice in two new papers, one in Arabic and one in English, stating:
- The amount of the Share capital as last determined by the FZLLC
- The value of each Share;
- The amount to which the Share capital is to be decreased;
- The manner in which decrease in Share capital is taking place; and
- The period of notification of the decrease in capital, after which the decrease in capital may take effect. This period of notification must be at least thirty (30) days from the date of publication.
c- Where a decrease in Share capital is published to be effected through extinguishing or reducing the liability of a Shareholder on a Share; or reducing the value of a Share, a creditor of the FZLLC may object to the decrease in capital during the period commencing on the date of publication and concluding on the date the decrease in capital is proposed to take effect. Where a creditor raises such an objection, the decrease in capital will not take effect until such objection is resolved by the parties involved or by the court.
d- After the period of notification, or resolution of an objection by a creditor, if any, the majority of Directors or the Director of the FZLLC must sign a certificate declaring:
- That the decrease in capital has been carried out in accordance with these Regulations; and
- In the event a creditor objected to the decrease in capital, confirmation that the objection had been resolved, along with the withdrawal of the objection in writing, and where the objection was resolved by an order of a court, a copy of the order of the court approving the decrease in capital.
e- After the period of notification, and resolution of an objection, if any, the FZLLC must submit to the Authority:
- The resolution;
- The auditor’s report referred to, if applicable;
- A copy of the newspaper notices published in accordance with this article;
- The certificate referred to and documents supporting the certificate.
f- The reduction of capital of the FZLLC will come into effect on the date the Authority registers this decrease in the Register.
Article 4- Transfer of Shares
a- The MOA and AOA may provide the manner in which a Share may be transferred.
b- Notwithstanding anything in the AOA of the FZLLC, the transfer of a Share in the FZLLC must be done through an instrument of transfer in writing.
The instrument of transfer must be submitted to the Authority for approval and will not be completed without payment of applicable fee to the Authority.
c- On approval of Share transfer, the Authority will record the Share transfer in the FZLLC Register. The Share transfer will come into effect from the date on which the transfer is entered in the FZLLC Register.
Section 3- Distribution
Article 1- Dividend and Other Distributions
a- This article refers to the distribution of assets of the FZLLC to its Shareholders, including dividends, whether in cash or otherwise except distribution by ways of:
- An issue of bonus Shares;
- Redemption or purchase of the FZLLC own Shares, out of the Share capital or out of unrealized profits;
- Distribution of assets to Shareholders of the FZLLC on its winding up.
b- The FZLLC may by a resolution of the director(s) declare a dividend or make a distribution or recommend a dividend or distribution to the Shareholders, whether in cash or otherwise, out of the accumulated and realized profits, after deducting the accumulated and realized losses of the FZLLC.
Article 2- Unlawful distribution
Any distribution made in contravention of the above article 1-b must be returned by the receiving Shareholder. Where the distribution received is in a form other than cash, the Shareholder must pay a sum equal to the value of the distribution.