l-7-ch-ii -pjsc

8/6/2019 L-7-CH-II -PJSC

http://slidepdf.com/reader/full/l-7-ch-ii-pjsc 1/58

Capital Companies

Public Joint Stock Company(PJSC)

8/6/2019 L-7-CH-II -PJSC


Definition

³Any Company whose Capital is

divided into Transferable Shares of

Equal Value. The Liability of eachShareholder is limited to the Value

of the shares to which he has

subscribed´ ( A

rt. 64 CCL)

8/6/2019 L-7-CH-II -PJSC


When a Company is PJSC

Any Company

Capital must be divided into EQU AL V ALUE

Shares are TR ANSFER ABLE

The Liability of each Shareholder is LIMITED

Liability of Shareholder is limited to the value

of shares to which he has SUBSCRIBED

8/6/2019 L-7-CH-II -PJSC


What is share

A share is the interest of a Share-

Holder in a Company

The Capital of a Company is

divided into certain indivisible Units

of a Fixed Amount, these UNITSare called SH ARES

8/6/2019 L-7-CH-II -PJSC


SH ARES means Share in the

Share Capital of a Company.

A share is evidence by a SH ARE

CERTIFIC ATE

8/6/2019 L-7-CH-II -PJSC


Share Capital

Share Capital is a C APIT AL

R AISED by a Company by

ISSUE of Shares

8/6/2019 L-7-CH-II -PJSC


Characteristics

The Name of the PJSC should be

derived from its activities or Objects.

The term ³Public Joint Stock´ mustbe added to the company name ( Art.

65 CCL).

8/6/2019 L-7-CH-II -PJSC


How to Incorporate PJSC

A PJSC can be incorporated only by an

EMIRI DECREE, therefore, founders

are not free to draw up the Company¶s

Statutes.

The specimen may NOT be changed

without the approval of the Minister ( Art.

68)

8/6/2019 L-7-CH-II -PJSC


Statute & A.A. must be similar to

Ministerial Decision

The Statutes and Articles of

Association must be identical to the

specimen issued and published asMinisterial Decision (By Law No. 64

of 1989)

8/6/2019 L-7-CH-II -PJSC


Shareholders

The members/shareholders of the

company can be many and not

necessarily known to each other.

Death or Bankruptcy of one or more

members has no effect on the duration

of the Company

8/6/2019 L-7-CH-II -PJSC


Capital of PJSC

The Capital of the PJSC is divided into

Transferable Shares and the Liability of

Members/Share Holders is, contrary to

partnerships, PROPORTIONATE to the

value of the Shares owned by them ( Art.

64 CCL)

8/6/2019 L-7-CH-II -PJSC


Formation of the Public Joint Stock

Company (PJSC)

THE FOUNDERS

The Founders are those persons who

sign the initial Statutes andA

rticles of Association with the intent to assume

the Liability arising there from. Unless

there are at least TEN FOUNDERS, the

incorporation of the can not be licensed.

8/6/2019 L-7-CH-II -PJSC


The Statutes

The founders should prepare

between them (a) the Statutes and

(b) Articles of Incorporation inaccordance with the specimen,

published as ³BY L AW´ (64 of 1989)

8/6/2019 L-7-CH-II -PJSC


The Articles of Incorporation should

include following particulars:

1. The name of the Company and its

Head office

2. The duration of the Company3. The Object of the Company

4. The names of the Founders, their

Places of residence, professions &Nationalities

8/6/2019 L-7-CH-II -PJSC


Minimum Capital for PJSC

5. The amount of the Capital, number of

Shares into which the capital is

divided, the nominal value of each

share and its kind.

The Minimum capital of a PJSC is

AED 10,000,000.

8/6/2019 L-7-CH-II -PJSC


Details of Shares

6. A Statement of each share in kind,

name of the subscriber, the special

conditions thereto and the liens and

preferential rights imposed on the

shares

8/6/2019 L-7-CH-II -PJSC


Ex penditure & Founders¶ Undertaking

7. A statement of the approximate

expenses, wages and costs undertaken

to be paid by the company for its

incorporation.

8. An undertaking by the founders to

finalize incorporation formalities.

8/6/2019 L-7-CH-II -PJSC


Procedure for Incorporation

After agreeing and signing the statutes

and Articles of Incorporation, the

founders have to follow up the

registration formalities with the

Competent Authority in the Emirate

where the company is being

incorporated ( Art. 71)

8/6/2019 L-7-CH-II -PJSC


Issue of Licence

If the Competent Authority

approves the application, it will

issue the decision to licence theincorporation of the company.

8/6/2019 L-7-CH-II -PJSC


The Subscription

The subscription formalities for the

company shares shall start within

15 days from the date of thedecision of the Competent Authority

to incorporate the Company ( Art.

76).

8/6/2019 L-7-CH-II -PJSC


Invitation for Public Subscription

Invitation shall be printed in Two

Local daily newspapers published

in the Arabic Language at leastFive Days before the

commencement of the Subscription

( Art. 77).

8/6/2019 L-7-CH-II -PJSC


In addition to a summary of the statutes &

Articles of Incorporation, the prospectus

should include t

he following particulars:

1. Statement that the founders have paid the

required percentage of the value of the

shares subscribed by them.

2. The Maximum number of shares that may

be subscribed by each person.

8/6/2019 L-7-CH-II -PJSC


3. The number of shares required to be

held to qualify for membership of the

Board of Directors.

4. Date, place and conditions of

subscription.

5. Percentage of shares owned by Nationals

and the conditions of the disposal thereof.

8/6/2019 L-7-CH-II -PJSC


Prospectus must be signed by

Founders

6. Any other matters affecting the rights or

obligations of the shareholders.

The founders should sign the

prospectus and will be jointly liable for

the accuracy of the particulars

mentioned therein.

8/6/2019 L-7-CH-II -PJSC


Subscription by Founders

Before publishing a prospectus

inviting subscription for shares,

founders must themselves subscribeto a Minimum of 20% and a

Maximum of 45% of the SH ARE

C A

PIT A

L of the company ( A

rt.7

8)

8/6/2019 L-7-CH-II -PJSC


1. The subscription should be open to the

Public for a period of not less than 10

days and not more than 90 days

during which all shares, after

deducting founders¶ shares, have to be

offered for subscription.

8/6/2019 L-7-CH-II -PJSC


2. The Company will not be incorporated

unless all its shares are fully subscribed

to.

8/6/2019 L-7-CH-II -PJSC


Extension of Subscription Date

3. If the subscription is not completed within

the prescribed limit of time, the founders

may, by decree of the Competent Authority, extend the subscription for a

period not exceeding 30 days, provided

that the Ministry is notified of theCompetent Authority¶s decree in this

regard ( Art. 82)

8/6/2019 L-7-CH-II -PJSC


R evocation of Incorporation when the

proper response is not found

4. Even after extension to time the shares

being not subscribed by the public, the

founders may revoke the incorporation

of the company, or, subject to the

approval of the Minster, either reduce

the capital or subscribe to the remaining

unsubscribed shares themselves ( Art.83).

8/6/2019 L-7-CH-II -PJSC


R eturn of Paid-up value in case of

R evocation

5. If the incorporation of the company

is revoked, the founders will be

jointly liable for the return of thepaid-up value of the shares to the

subscribers ( Art. 84).

8/6/2019 L-7-CH-II -PJSC


Proportionate allocation of Shares

If the subscription exceeds the number

of shares offered, the shares shall be

allocated to the subscribers in

proportion to the number of shares for

which they have subscribed.

8/6/2019 L-7-CH-II -PJSC


As for as possible allot share to every

Subscriber

Allocation shall be made up to the

nearest complete share, provided that

none of the shareholders, as a result of

the allocation, should be deprived of

participating in the company irrespective

of the number of shares subscribed to

( Art. 85).

8/6/2019 L-7-CH-II -PJSC


PJSC

First General Body Meeting

8/6/2019 L-7-CH-II -PJSC


The Constitutive General Meeting

Once the capital has been fully

subscribed to, the founders must, within

30 days from the closing date of the

subscription, convene the subscribers to

attend a Constitutive General Meeting

( Art. 88).

8/6/2019 L-7-CH-II -PJSC


The Main functions of the meeting are

the following:

1. Consideration of the report of the

founders dealing with the process of

incorporation and the expenses

involved;

2. Election of the First Board of Directors

and Appointment of the company¶s

Auditors;

8/6/2019 L-7-CH-II -PJSC


3. Approval of the evaluation of shares

contributed in kind;

4. Declaration that the company hasbeen finally incorporated.

8/6/2019 L-7-CH-II -PJSC


During R egistration Period- It is

Corporate Personality

During the registration period and while

the incorporation formalities are being

implemented the company is

considered to have a corporate

personality necessary for the purposes

of implementing this procedure ( Art. 72).

8/6/2019 L-7-CH-II -PJSC


Company bound by the actions of

Founders

The company will be bound by the

actions of the founders and shall bear

the consequences and costs thereof

during this period, provided that the

incorporation of the company is legally

completed.

8/6/2019 L-7-CH-II -PJSC


Who will Manage PJSC

A Public Joint Stock Company is

Managed by a Board of Directors.

The Articles of Association shall specify

the method of its Composition, the

Number of its members and their Term

of membership.

8/6/2019 L-7-CH-II -PJSC


Minimum & Maximum BOD

The number of its Members may

not be less than Three (3) and not

more than Fifteen (15) Directors( Art. 95).

8/6/2019 L-7-CH-II -PJSC


How the Directors be appointed

Directors are appointed at the ordinary

General meeting by secret ballot.

However, as an exception, the

founders may appoint from amongst

them the First Board of Directors.

8/6/2019 L-7-CH-II -PJSC


Term of Board of Directors

The Board should be appointed for a

period not more Three years. Unless

the statutes provide otherwise, a

Director may be appointed for more

than one term ( Art. 96) .

8/6/2019 L-7-CH-II -PJSC


Majority of BOD must be UAE

Nationals

The CCL stipulates that the

Majority of the members of the

Board shall be U

AEN

ationals ( A

rt.100).

8/6/2019 L-7-CH-II -PJSC


Other Conditions applicable to a BOD

A member of the board, further, mustnot be convicted of a crime of Honor or Breach of Trust unless he has been

pardoned by the Competent Authorities. A person may not be a Director,

whether in his personal capacity or as arepresentative of a corporate entity, inmore than Five PJSCs whose mainoffices are in the U AE ( Art.98).

8/6/2019 L-7-CH-II -PJSC


8/6/2019 L-7-CH-II -PJSC


General Powers of the Board of

Directors

The Board (BOD) will have the full

powers for the management of the

company and for the carrying out of

activities necessary for the fulfilment of

its objects.

8/6/2019 L-7-CH-II -PJSC


Excluded Powers

Except such matters which are

expressly reserved by the Commercial

Companies Law or the Articles of

Incorporation of the company to the

general meeting (e.g., approval of the

annual accounts, amendment of the

statutes).

8/6/2019 L-7-CH-II -PJSC


Matters which are excluded from the

authority of the Board (Art. 103)

1. Concluding loans for periods exceeding

three years.

2. Selling or mortgaging the company'sreal estate or store.

3. Absolving company debtors of their

commitments toward the company.

4. Conducting a conciliation or agreeing

to Arbitration.

8/6/2019 L-7-CH-II -PJSC


Company is bound by the actions of

BOD

The company is bound by transactions

entered into by its Board of Directors

performed within its competence ( A

rt.110).

8/6/2019 L-7-CH-II -PJSC


Further Restrictions on Directors

(Art. 108)

(i) A Director cannot be involved in any

activities on his own, or on behalf of a

third party, similar to the activities

carried out by the company.

(ii) A company cannot offer a loan

to, or guarantee the loan of, a

Director.

8/6/2019 L-7-CH-II -PJSC


Contract in which Director has interest

(iii) A Director with a conflicting interest in a

proposed contract with the company must

declare his interest to the Board and is

forbidden to vote in connection therewith;if he is entering into a contract himself with

the company it must be ratified by the

shareholders ( Art. 109).

8/6/2019 L-7-CH-II -PJSC


Responsibilities of Directors (Art. 111)

The directors shall be liable towards the

company, the shareholders and third

parties for: (a) all acts of fraud, (b)

abuse of authority and (c) any violation

of the Law or the company's Articles of

Incorporation as well as

mismanagement.

8/6/2019 L-7-CH-II -PJSC


BOD have to Indemnify the Company

from their actions

The company shall have the

right to initiate proceedings

against the Board of Directorsclaiming damages suffered by

the shareholders caused by

faults of the Board.

8/6/2019 L-7-CH-II -PJSC


Share holder also can proceed against

BOD

Any shareholder may independently

initiate proceedings when the company

fails to do so if the fault had caused a

particular damage to him as a

shareholder, provided that he notifies

the company of his intention to initiate

proceedings.

8/6/2019 L-7-CH-II -PJSC


Dismissal of Directors

At the General Meeting, the

shareholders may, even if stipulated

otherwise in the company's Articles of

Incorporation, dismiss all or some of the

members of the Board of Directors ( Art.

116).

8/6/2019 L-7-CH-II -PJSC


No R e-nomination for 3 Years

If a member of the board of directors

has been dismissed, he may not be re-

nominated for membership of the board

before the expiry of three years from the

date of adoption the dismissal resolution

( Art. 117).

8/6/2019 L-7-CH-II -PJSC


Remuneration of Directors

The Directors may be paid

collectively as remuneration fixed

annual sum resolved upon at thegeneral meeting.

8/6/2019 L-7-CH-II -PJSC


Maximum Ceiling on R emuneration

The remuneration must not exceed 10%

of the net profit after deducting the

depreciation, the reserve and the

distribution of a dividend of not less than

5% of the capital to the shareholders

( Art. 118).

l-7-ch-ii -pjsc

Documents