A Public Shareholding Company also referred to as a PJSC (public joint stock company), is a company where the business capital is divided into equal shares. Their respective number of shares limits each shareholder's liability.
A Public Joint Stock Company in Dubai or elsewhere is required to have at least ten founding members, and its management should be vested in a board of directors consisting of 3 to 15 persons whose term of office may not exceed three years. The founder members may only hold 35% of the share capital, with the remainder required to be offered to the public.
The Chairman and majority of the directors in a public shareholding company must be UAE nationals.
The law stipulates that banking, insurance, or other financial companies should be run as public shareholding companies.
However, foreign banks, insurance, and commercial companies can set up in Dubai by opening a branch or representative office. The minimum capital required to set up a public shareholding company in Dubai is AED 10 million (about $2.7 million) with a nominal face value of AED 1 to 100.
Requirements for Setting up a PJSC in Dubai
For a banking company, the minimum capital required is AED 40 million, and for insurance and investment companies, it is AED 25 million. For establishing a public shareholding business setup in Dubai, the other prerequisites are the preparation of a founders' agreement, a prospectus, or invitation for public subscription supported by an overall business plan or feasibility study and an auditor's certificate, a due diligence survey, a memorandum, and articles of association.
- A minimum of 10 company shareholders is required for incorporation
- A management board must have 3 to 15 directors
- The term of service for the management board must not exceed more than three years.
- Primary shareholders or the founding members are entitled to 35% of share capital, offering the remaining 75% to the public.
- The Chairman and the majority of the management board must be Emirati, and 51% of the shares must be owned by the UAE national.
- In most cases, local banking, insurance, and financial ventures must be run as a PJSC, while international companies practicing the same activities can open a branch or a representative office in Dubai.
Benefits of a PJSC, Dubai
The joint stock corporation is the ideal legal form to use when implementing significant projects or assets. This structure makes it possible to gather stockholders and big sums of money in one location, which increases the ability to conduct a successful business in Dubai.
The fact that the joint stock company in Dubai gives a great deal of freedom in the distribution of profits is a significant benefit. Additionally, a joint stock corporation makes it easier to borrow money from banks, giving you access to even more financial resources.
Any shareholder's fundamental rights in a public joint stock corporation UAE:
- Shareholders' fundamental rights include the following:
- Each shareholder in a public joint stock company in the United Arab Emirates is entitled to one vote per share in the annual general meeting for the election of directors.
- Additionally, stockholders are entitled to a portion of the company's profits.
All About a Recent News Regarding the PJSCs in Dubai
Public joint-stock enterprises that contribute at least 51% of the national capital will be permitted to function as commercial agents in the UAE. According to Abdullah bin Touq Al Marri, the country's newly draught federal law on the regulation of commercial agencies, this will be permitted.
The new draught law allows new categories of nationals to access the commercial agency business, increasing the number of business prospects for UAE citizens. The Federal National Council (FNC), which is examining the new draught law, was considering it when the minister made his comments.
Even after the contract period has passed, the current law governing the regulation of commercial agencies imposes various limits on terminating commercial agencies. The agency agreement expires in accordance with the proposed law at the conclusion of the predetermined term.
Al Marri added that the country would be able to establish a variety of cooperatives to take advantage of the economic and development potential provided by this important sector, with the goal of increasing its GDP contribution.
How to Get Included in the List of PJSC Companies in Dubai?
Below is a step-by-step explanation of how to establish a public shareholding company in Dubai.
1. Decide on a Trading Name for Your Company
Choosing a name for the business is the first thing that must be done. To readily draw customers to the business, the name should seem appealing and professional.
2. Get Preliminary Approval from DED Dubai
The initial DED (Department of Economic Development) approval is necessary with the consent of other parties and comes after the choice of the business name. In order to launch a business in Dubai, this is necessary.
3. Submit the Paperwork Necessary for the Licence
There are some documents that must be submitted after receiving approval, as listed below. These papers must be submitted in order to be granted a license to form a business in Dubai.
- Founder's Agreement with Registration and Licensing Application
- Government Approval for Business Activity
- Prospectus of Invitation for Public Subscription
- UAE Securities and Commodities Authority Approval for public shareholding
- Auditors Certificate
- Resolution from Ministry of Economy for Public Shareholding
- Due Diligence Survey
- Two copies of the Project's Feasibility Study
- Four copies of the Memorandum and Articles of Association authenticated by Notary Public.
- Photocopies of Office Space Contract and Registered Plot Number
- Appointed Board of Managers and Directors Written Declaration accepting appointment
- The Original Documents include the director's Name, Date and Place of Birth, Occupation, and Sample Signature.
4. Pay the Required Fees to Obtain the Business Licence
The license can be obtained for a small charge. The license cannot be obtained until this price has been paid.
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How many minimum founding members does a public share company require?
A minimum of 10.
How many board members should the Public Joint Stock Company have?
3 to 15 members.
How many shares can the founders of a public share firm hold?
A maximum of 35% and the rest are offered to the public.
What is the minimum capital required for PJSC incorporation?
A minimum of AED 10 million.
What is the tenure of the board member of a public share organisation?
Not more than 3 years.