A Memorandum of Association is one of the most crucial papers you will require if you are starting a business in the United Arab Emirates (MoA). You may already be familiar with this phrase if you are researching how to launch your own company in the United Arab Emirates. What does it actually mean, why would you want one, and how can you acquire one?
Here is everything you require to know.
What is a Memorandum of Association (MoA)?
It is a document that details every aspect of a company’s activities.
In order to establish the relationship with the stakeholders and the goals for which the company has been founded, an MoA is prepared during the firm’s creation and registration procedure.
For the benefit of shareholders, creditors, and anyone else doing business with the company, this document sets down the fundamental rights and powers of the corporation. Additionally, the information in the MoA enables prospective shareholders to choose wisely when thinking about making an investment in the company.
It is crucial to remember that a corporation may only partake in the activities specified in the MoA. Thus, as a document, it establishes a wide range of parameters for the company’s actions, protecting the shareholders’ funds and ensuring that they are not exposed to risk in other unrelated activities as a result.
The MoA includes information about the firm’s name, shareholders’ names, office address, share distributions within the company, and shareholder agreements in addition to business activities and shareholder agreements.
The MoA should be in Arabic
The MoA is a document that must be written in Arabic, signed, and written in order to be valid, so keep that in mind as you plan the establishment of your business.
The Arabic version of the MoA will take precedence in the UAE even if it is published in a different language.
Also Read: Business Golden Visa in the UAE: everything you need to know
How is an MOA registered?
An MoA must be entered into the commercial register of the Emirate’s economic department or the free zone authority where the firm has been registered in order to be legally binding.
The MoA becomes ineffective in the perspective of third parties if it is not registered. However, just the section of the MoA that isn’t registered will be deemed useless by outside parties.
This means that if a corporation updated a previous MoA due to an expansion or other change, and the subsequent MoA is not registered with the economic department or free zone, the amendment will not be enforceable or valid.
A corporation that is a Global-Link Corporate Service Provider is legally required to stay within the restrictions stated in the MoA.
A Company may not, under any circumstances, deviate from the conditions of the MOA. It will be regarded as a breach of agreement when or if it happens.
What if one wants to amend the MoA?
The only thing you need to do, according to experts, is to make sure that you alter the MoA to reflect the changes, in compliance with the legal requirements mentioned above, in the event that your organization expands or changes its commercial activities. The amendment must also be attested in order to be valid.
Where can one get a Memorandum of Association?
They will be able to help you with the MoA’s drafting and attestation if you are forming your company through a company formation specialist. As an alternative, you can apply for it through a law office with offices in the United Arab Emirates, a public relations business, or a typing service.
Why is it important to attest to the MoA?
According to the federal legislation of the UAE, attesting to this document is required by law.
If a MoA is not attested, it will be declared invalid and the application for a business license would be rejected.
If you need to present the MoA for commercial purposes outside the UAE, you will require further attestation from the Ministry of Foreign Affairs and International Cooperation (MOFAIC) as well as the UAE Embassy in that country. Normally, the MoA must be confirmed by a notary in the UAE.