New law is promulgated to regulate family-owned businesses in Dubai. The law, provides clear legal framework for family ownership in Dubai.
Dubai , Dubai
22 August 2020, 12:00 AM
31 August 2020, 12:00 AM
A new law providing a clear legal framework to regulate family-owned businesses and facilitate their smooth transfer between successive generations has been promulgated in Dubai.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, Vice President and Prime Minister of the UAE on Wednesday issued Law No. (9) of 2020 regulating family-owned businesses in Dubai.
By providing a clear legal framework for family ownership in the emirate, the new Law seeks to protect families’ wealth, enhance the contribution of family businesses to economic and social development and foster the growth of family businesses.
According to the decree, the validity of a family ownership contract can be extended up to 15 years. It can be renewed for a similar term following the agreement of all concerned parties. The law also regulates the articles of the family ownership contract, the business's structure and management, the formation of the board, the authorities and responsibilities delegated to the board and management as well as the management's powers and limitations.
The law is optionally applicable to existing and new family ownerships, including corporate equity securities and proprietorship. Family ownership in public joint stock companies and movable and immovable property are excluded from this law, the Media Office said.
The Law also defines the responsibilities and authorities of government entities with regard to facilitating the formation of family-owned businesses.