Public/Private Shareholding Company in Ajman

Ajman, one of the emirates of the United Arab Emirates (UAE), has rapidly emerged as a promising destination for investors and entrepreneurs. Known for its unmatched road connectivity, Ajman is easily accessible from other parts of the UAE. This makes it an ideal location for businesses seeking strategic reach and operational ease.

The Emirate’s economy is primarily driven by fisheries, trade, and agriculture, along with a growing industrial sector and vibrant construction and commercial activities. For investors looking to set up a company in Ajman, one of the key decisions involves choosing the right legal structure.

What is a Public Shareholding Company in Ajman?

A Public Joint Stock Company (PJSC) is defined as a business whose capital is divided into negotiable shares of equal value. Each shareholder’s liability is limited to the value of their shares, protecting personal assets from company debts. This structure is ideal for large-scale enterprises planning to attract investment through public share offerings.

Conditions to Start a Public Shareholding Company in Ajman

If planning a business setup in Ajman as a public shareholding company, it involves adhering to specific legal and procedural requirements. These are:

• The company name must reflect its business activity or purpose. It cannot use the name of a natural person unless the company is established to invest in a patent or trade under a business name owned by that individual. In every case, the phrase “Public Joint Stock Company” must be added to the name. The company name must also be unique and not resemble any existing company names. If a conflict arises, the affected company may approach the competent authority to require the newly formed company to change its name.
• The company’s capital must be adequate for its intended purpose and cannot be less than at least AED 30 million. This amount helps maintain investor confidence and supports large-scale operations.
• A minimum of five founders is required to establish a PJSC. The founders must form a committee of three to five members to complete all establishment formalities with the concerned authorities.
• Founders must subscribe to at least 30 percent and no more than 70 percent of the company’s capital. Before public subscription, founders must deposit their share in a bank and obtain a certificate confirming the payment. The remaining shares can then be offered for public subscription.
• The company’s capital must be divided into equal shares, with a nominal value ranging from AED 1 to AED 100. Shares must be issued at nominal value only as issuing shares below or above this value is not permitted.
• All shares carry equal rights and obligations, ensuring fair treatment of shareholders.
• Shares are nominative and transferable, but bearer shares are not allowed. Profit coupons and dividends must be distributed as per the company’s Articles of Association.

A public shareholding company structure provides flexibility, transparency, and the opportunity for expansion by attracting public investors. It is particularly suitable for businesses in sectors such as finance, real estate, construction, and manufacturing, where significant capital is required.

What is a Private Shareholding Company in Ajman?

A private joint stock company in Ajman is established by a smaller group of investors who prefer to keep control within a limited circle. Unlike a public company, a private shareholding company cannot offer its shares to the general public. This structure is ideal for medium to large enterprises that want to operate as shareholding entities without being subject to the extensive regulatory requirements of a public company.

Conditions to Start a Private Shareholding Company in Ajman

• The formation of a private shareholding company follows similar guidelines as that of a public shareholding company, with a few distinct conditions such as:
• The company’s shares cannot be publicly offered and must be fully subscribed by the founders.
• The minimum capital requirement is AED 5 million (as per standard provisions under UAE Company Law).
  All regulations applicable to public shareholding companies, except those relating to public subscriptions, apply to private companies as well.
• A private company can later be converted into a public company if it meets the following requirements:
  • All shares must be fully paid up.
  • The company must have been operational for at least two financial years.
  • It must have earned net profits averaging at least 10 percent of its capital during the two years preceding the conversion application.
  • The conversion must be approved by a three-fourths majority vote at an extraordinary general meeting.

Procedure to Set Up a Public/Private Shareholding Company in Ajman

You can choose to start your public or private shareholding company either in the Ajman free zone or the mainland. The business setup procedure involves a series of structured steps to ensure legal compliance and smooth company incorporation. Let us see the step-by-step guide:

Step 1: Choose the Business Activity

Select the nature of your business from the list of permissible activities in Ajman. The activity will determine the type of license you will need to obtain.

Step 2: Reserve a Trade Name

Select a unique trade name that aligns with the company’s activity and meets the Ajman Department of Economic Development’s (Ajman DED) naming requirements.

Step 3: Obtain Initial Approval

Submit the proposed business activity and documents to the Ajman DED for initial approval. This step confirms that the government has no objection to the business formation.

Step 4: Submit Required Documents

Provide all the necessary documents, including the Memorandum and Articles of Association, founder details, and proof of capital deposit.

Step 5: Get Additional Approvals

Depending on the nature of your business, you may require approvals from other authorities, such as the Ministry of Economy or sector-specific regulatory bodies.

Step 6: Pay Fees and Obtain License

Once all documents and approvals are in place, pay the applicable registration fees to obtain your business license in Ajman. This license legally allows you to commence operations.

How Commitbiz Can Help?

Setting up a public or private shareholding company in Ajman involves a series of formalities, legal documentation, and approvals from multiple authorities. For entrepreneurs unfamiliar with local business laws, this process can seem complex. But hiring expert business setup consultants in Dubai can make the process hassle-free.

Professionals at Commitbiz LLC specialise in guiding investors through every step of business setup in Ajman. From preparing and filing incorporation documents to securing the necessary approvals and trade license, our team of experienced consultants assists with everything. Whether you plan to establish a public joint stock company to attract investors or a private one to maintain operational control, we simplify the entire process for you. Contact us today.