Dr. Hisham Fawzi’s participation in the completion of the discussion on a federal draft law concerning companies in the UAE:
His Excellency Ali Issa Al Nuaimi (Committee Rapporteur):
“Article (4) now numbered (2)”
Companies exempted from the provisions of this law – Page (20)
Newly introduced:
“Any company referred to in paragraph (1/4) of this article must regularize its status in accordance with the provisions of this law if it sells or offers any portion of its capital in a public offering or lists its shares on any of the country’s financial markets.”
Justification: Due to the explanation provided above, the phrase following subsections (4-2-2) has been deleted and placed in a separate paragraph, and the article numbering format has been adjusted accordingly.
Professor Dr. Hisham Mohamed Fawzi (Legal Advisor to the Council):
In the name of Allah, the Most Gracious, the Most Merciful, Your Excellency, President. Essentially, Article (2) addresses companies subject to the provisions of this law. Companies subject to these provisions are entities that have been regulated under this law, and the matter ends there. What is exempted? It must be noted that these companies must be commercial. If the company is not commercial, then it does not fall under the exemption – fundamentally. There is no room for exemptions in such cases. Since we have stated in Article (2) that it applies to commercial companies, the exemption must therefore apply to commercial entities only, not to any other type of company. Professional or civil companies are inherently outside the scope of this law. Perhaps there was a proposal – which we might have overlooked altogether – to define the company as a “commercial company” when we intended to exclude it. If we had included this definition stating that the company is a commercial entity, all these doubts and suspicions would disappear…
His Excellency, President:
Where should it be placed, Mr. Legal Advisor?
Professor Dr. Hisham Mohamed Fawzi (Legal Advisor to the Council):
It should be placed in the definitions section at the end. The company is a commercial entity. This matter is settled conclusively, and this law regulates commercial companies without any room for exceptions or otherwise. Thank you.
Session minutes: 41 – Session 2 – Chapter 41, Page 14 out of 262
His Excellency, President:
A definition will be added stating “the company is: the commercial company”. Does the Council agree to this? This settles the matter. Your opinion, Minister.
Professor Dr. Mohammed Abdul Aal Al Sinnari (Legal Advisor to the Council):
In the name of Allah, the Most Gracious, the Most Merciful, Your Excellency, President. When our esteemed colleague Dr. Hisham spoke and suggested placing the intended definition of the company, it means that whenever the term “company” appears in any article of this law, it refers to commercial companies. When we reach Article (7) and state the definition of the company, and we remain silent, there will be inconsistency. However, if we clarify that the term “commercial company” is meant, that would be the correct heading. We can use the definition provided by Your Excellency Minister, and in this manner, instead of defining the company in Article (7), we would state “meant by the commercial company” or “the nature of the commercial company”. Whatever title is chosen by the members, thank you.
His Excellency, President:
Does the Council agree to this amendment as proposed by the Committee? The floor is to Mr. Sultan Al Shamsi.
His Excellency Sultan Juma Al Shamsi:
Your Excellency, President, I request to replace – with your permission – the word “establishment” with the word “issuance of shares”. How are shares “established,” Your Excellency President?! They are issued, not established. Thank you.
His Excellency, President:
Mr. Legal Advisor, regarding Article (214) now Article (211), as mentioned by Mr. Sultan in terms of practical formulation or real description, it is preferable to say “by issuing free shares” rather than “by establishing free shares”. Please proceed.
Professor Dr. Hisham Mohamed Fawzi (Legal Advisor to the Council):
The observation is correct, Your Excellency, President.
His Excellency, President:
We always benefit from Mr. Sultan’s clarifications that assist in formulation and important matters. Now, does the Council agree to this article as amended by the Council?
(Agreement)
