Sharjah, one of the seven emirates of the UAE, draws investments from across the world. The Sharjah government considers global trade and commerce to be extremely important. It also offers policies that are favourable to investors and is quite advantageous for starting a business in Sharjah. To make sure that entrepreneurs feel comfortable forming their companies, the legal authorities offer comprehensive help and simple procedures. This is the reason why entrepreneurs want to invest in Sharjah.
If planning a business setup in Sharjah, the Emirate’s regulatory framework encourages various legal structures, including the public shareholding company. This article talks in detail about the concept of public shareholding, its formation, benefits, and features.
Overview of a Public Shareholding Company in Sharjah
A public shareholding company in Sharjah is a corporate entity where the capital is divided into equal shares, and each shareholder's liability is limited to the number of shares they own. Such companies are regulated by the laws governing public joint stock companies. It is an attractive business venture for large size firms.
A public company established in Sharjah looks to raise money through public investment. Apart from meeting numerous financial and regulatory requirements, businesses must also have a minimum capital requirement.
Let us look at the features of a public shareholding company in Sharjah:
- Shareholders have a limited liability. It means that they are only liable for the amount of capital they invested in the company.
- Minimum capital is mandatory for such a business entity.
- Shares of the company can be traded to the public through financial markets. As Sharjah does not have its own stock exchange, companies here can choose to trade on the Abu Dhabi Securities Exchange (ADX), the Dubai Financial Market (DFM), and Nasdaq Dubai.
- A public shareholding company in Sharjah is subject to regulations from the Securities and Commodities Authority (SCA) and Sharjah Economic Development Department (SEDD).
Benefits of Establishing a Public Shareholding Company in Sharjah
A public shareholding company offers several benefits to entrepreneurs:
Limited Liability
Shareholders in a public company are only liable for the amount that they have invested. This helps in reducing any personal financial risk.
Raise Capital
Through an initial public offering (IPO), a public company can raise a good amount of money, enabling growth and supporting ambitious projects.
Government Initiatives
The Sharjah government offers pro-business initiatives to public companies for smooth operations and easy business setup. It promotes investment through the legal framework, world-class infrastructure, and tax incentives.
Tax Benefits
A Sharjah free zone company formation offers many tax benefits. Even in mainland Sharjah, the government ensures public companies enjoy tax exemptions or reduced tax rates depending on their industry and structure.
Business Growth Opportunities
With so many business opportunities in Sharjah, expanding into new markets and industries is possible for public companies due to easier access to capital.
How to Start a Public Shareholding Company in Sharjah?
There are several steps involved in a public company formation in Sharjah to guarantee both legal compliance and efficient operation. The steps are as follows:
Step 1: Identify the Nature of Business
With so many business opportunities in Sharjah, the first step is to identify the industry that you want to venture into. There are more than 2,000 economic activities in the UAE to choose from. The nature of your business will determine what business license you are eligible to apply for. Public companies in Sharjah can choose from the following six types of business licenses: industrial, occupational, tourism, commercial, agricultural, and professional.
Step 2: Reserve Trade Name
The trade name is the name given to your company. Choose a unique business name that has not been registered previously. The name must be compatible with the nature of your business. It should not be offensive to the public. You can reserve your trade name by registering it with SEDD.
Step 3: Get Initial Approval
The next step, which is to obtain the initial approval, involves getting a no-objection certificate (NOC) from Sharjah authorities. This approval enables the authorities to grant the licence, while allowing the investor to move forward with the next steps in establishing a company.
Step 4: Create Important Documents
As a public company, preparing significant legal documents such as a memorandum of association (MOA), board resolution, and articles of association (AOA) is mandatory.
Step 5: Identify Business Location
The next step is to decide the location where you want to operate your business. The company's location and office space must adhere to the zoning laws and regulations of the Sharjah Municipality and other appropriate authorities. It should also comply with the requirements set forth by SEDD.
Step 6: Get Additional Approvals
In case of certain business activities, you will have to get additional approvals from government authorities. For example, if your company wants to get into the telecommunications field, you have to get approval from the Telecommunications and Digital Government Regulatory Authority (TDRA).
Step 7: Submit Documents
The next step is to submit important documents such as the NOC, MOA, AOA, board resolution, copy of your lease contract, and additional approvals.
Step 8: Pay Required Fees
Make the required payment as per the nature of your business license and collect the license from SEDD.
Step 9: Register with the Chamber of Commerce and Industry
The final step is to register your company with the Sharjah Chamber of Commerce and Industry.
Why Choose Commitbiz?
Opening a public shareholding company in Sharjah is a great option for entrepreneurs wishing to grow and raise money through public investment. Besides, starting a business in Sharjah ensures investor protection, corporate governance, and transparency. However, you first need to understand the local benefits and legal framework.
Are you planning to start a public shareholding company in Sharjah? Contact us for a smooth public company formation in Sharjah. With more than 17 years of experience, Commitbiz is dedicated to helping you with a hassle-free business setup journey by handling all the legal formalities and paperwork.
What are the key obligations of a public shareholding company in Sharjah?
A public shareholding company in Sharjah must abide by the following obligations:
- Annual general meetings (AGM) for shareholders
- Regular financial audits and reporting
- Maintaining corporate governance practices
How long does it take to register a public company in Sharjah?
It takes approximately four days to register a company under SEDD.
What is the role of SCA in a public shareholding company in Sharjah?
SCA oversees and controls publicly traded companies in Sharjah. It guarantees adherence to listing regulations, corporate governance, and financial regulations.