What exactly is so cool about a national that he has to sit on the head of a expact businessman at all times.
Is he going to invest. No, only in the conditions where he gets the most money.
Is he going to work. Hell no.
plz. read on
LLC firms to face stiff penalties
BY ISAAC JOHN (Chief Business Reporter)
4 April 2006
DUBAI — Some 80 per cent of the limited liability companies (LLC) operating in the UAE will have to regularise their investment and profit sharing ratio in line with the 51:49 shareholding pattern stipulated by the existing Commercial Companies Law (CCL) before November 2007 to ward off stiff penalties including fine and imprisonment.
According to legal experts, as per the law No17. 2004, if the LLC operation violates the prevailing CCL rules, both partners — nationals and expatriates — shall be punished. The law, promulgated in November 2004, but suspended for three years, will come into effect on November 1, 2007 unless the new Company Law, now in the final stage of draft, comes out with more clear and pragmatic rules that will replace the Law no 17.2004
"This law, which also nullifies all the side agreements which are normally entered into by the UAE national and the expatriate partner to safeguard their mutual interests, stipulates a fine not exceeding Dh100,000 for a first-time violation, and if repeated, besides the fine, the national partner faces up to two years' imprisonment while the expatriate will be jailed and deported after the fulfilment of his obligations. The law also stipulates that the licence of such nationals found guilty of violation will be cancelled. The national partner will also be banned from doing the same activity for a period not less than two years and not more than five years from the date of judgment," said K.K. Sarachandra Bose, a lawyer with Dar Al Adalah.
Legal experts said the law at its current form would have far-reaching implications on the business and trade environment. At present, a side agreement is normally implemented to regulate the relationship between the national and expatriate partners. It also helps the LLC partners to circumvent the 51:49 rule of investment and profit sharing.
The long-awaited new Company Law is almost ready and this will go to all concerned parties for their concurrence before it is approved by the Cabinet. Currently, the draft of the laws are being reviewed by associations including the private sector to get their views before enactment by the federal government. It is learnt that the new laws will be more flexible and will in some cases permit companies to be more than 49 per cent foreign owned.
Under the existing Commercial Companies Law or CCL (Federal Law No. 8 of 1984 Concerning Commercial Companies as amended by Federal Law No 13 of 1988, Federal Law No. 15 of 1998), foreign investors are permitted to hold up to 49 per cent equity ownership in UAE companies, 51 per cent of the equity must be held at all times by one or more UAE nationals. The LLC requires a minimum of two and a maximum of 50 members and minimum capitalisation of Dh150,000 in all emirates except Dubai where the requirement is Dh300,000. Management of the LLC is vested in the ‘managers’ who may or may not be UAE nationals.
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