This is an important step for business setup in Dubai.
Depending upon the legal form of business, the partners are required to draft and sign a Memorandum of Association.
In some legal forms, if the owners or partners are expatriates a Local Service Agent agreement need to be drafted and signed.
MoA is essential in LLC, Civil Company, Simple Limited Partnership, Partnership, Private Share Holding Company and Public Share Holding Company.
LSA agreement is required in Professional Establisment & Civil Company where there is no local partner, Branch of a Foreign Company, Branch of a Free Zone Company (no local partner or where the local partner owns less than 51% shares).
A Memorandum of Association or LSA agreement is a legal document which may require the service of a consultant to draft it.
It is prepared both in Arabic and English.
It should be attested by a registered legal translator.
The legal translator's stamp and sign should be affixed on the document.
MoA or LSA agreement is normally prepared in as many copies after considering the number of partners.
One copy to be filed in Court, one copy in DED, one copy each to local and expatriate partners.
Memorandum of Association
Memorandum of Association is the basic document of the company.
It is also known as the constitution of the company.
It sets the framework of operation of the company and governs the relationship between partners or share holders.
Most important components of a Memorandum of Association are:
+ Name of the company.
+ Partners or Share holders (both local and expatriate).
+ Objective of the company.
+ Capital of the company.
+ Share transfer.
+ Management of the company.
+ Financial management of the company.
+ General body of the company.
+ Profit & Loss sharing ratio.
+ Liquidation or dissolution of the company.
Local Service Agent Agreement
The LSA agreement governs the relationship between you and the local service agent.
It specifically tells that LSA has no legal interest in the ownership, profit and loss, assets, liabilities and management of the business.
He has no financial responsibility.
He merely acts as an agent of the company before government department and authorities for compliance matters.
He is entitled for a fixed annual remuneration.
What are the information or documents required to draft a MoA or LSA ?
+ Passport copies of partners including UAE National and local service agent.
+ Initial approval certificate.
+ Trade name reservation certificate.
+ Share holding ratio.
+ Profit sharing ratio (remuneration to LSA)
+ Management of the company - rights, duties, authorities and responsibilities of partners.
+ Who will be the Managing partner or Managing director.
Mr. Baiju Masoodu is a Free Zone Business Setup Consultant. Our ‘corporate service firm’ can advise and assist you to set-up a business in Dubai and UAE Free Zones. For a free consultation & cost estimate, call me on: +971 50 214 1476 or mail me at: firstname.lastname@example.org