Thinking of starting a business in the UAE? The Emirates has introduced some requirements to ensure legal compliance and protect owners’ rights. Drafting and notarising a Memorandum of Association (MoA) is one such requirement. This document defines the scope, objectives and liabilities of a company.
It is mandatory for setting up all types of businesses, whether a limited liability company, a partnership venture or a family business. Scroll down to learn more about its importance, clauses and attestation.
- What Is the Memorandum of Association?
- Importance of MoA
- Difference Between Memorandum of Association and Articles of Association
- MoA Clauses
- How to Obtain MoA in the UAE
- Hiring Professional Services
- FAQs
What Is the Memorandum of Association?
A Memorandum of Association (MoA) is a legal document mandatory for a company registration in the UAE. This document states the business name, location, activities, shareholder details and liabilities. In simple terms, it highlights the purpose of a company formation.
Before company registration, a crucial step is to draft an MoA with the consent of all members. This document must be approved and notarised by the UAE Notary Public. But why is MoA important and how is it drafted? Let’s get into the details:
Importance of MoA
MoA is not only a requirement for company formation, but this document serves some key purposes. Here is why businesses need this document:
- Defines the operational principles and regulations.
- Validates the authenticity of an organisation.
- Outlines the limitations of stakeholders.
- States the liabilities and rights of owners.
- Highlights the division of capital and shares among different members.
Difference Between Memorandum of Association and Articles of Association
The Memorandum of Association and Articles of Association are two separate documents required for a company registration. Here is the difference between these documents:
| Factor | Memorandum of Association (MoA) | Articles of Association (AoA) |
| Meaning | Defines the purpose, scope and limitations. | States the day-to-day operations and rules for effective functioning. |
| Focus | External with stakeholders. | Internal between employees. |
| Amendments | Approval of government authorities is mandatory. | Can be amended by stakeholders’ consent. |
MoA Clauses
An MoA includes various clauses, such as the company’s name, objectives and liabilities. Here is a brief on all the clauses:
| Clause | Details |
| Name Clause | It states the company’s name. The trade name must be registered beforehand, be unique and follow legal guidelines. |
| Registered Office Clause | The company must have a physical address before drafting an MoA. This clause mentions the address and emirate of the registered office. |
| Objective Clause | It outlines the business activities and objectives to ensure compliance with the UAE laws. |
| Capital Clause | This clause mentions the total capital invested in the business. |
| Liability Clause | It specifies if the members bear limited or unlimited liability. |
| Subscription Clause | This clause mentions the division of shares among different shareholders. |
| Association Clause | It declares the purpose of the company formation and the consent of all the shareholders. |
| Miscellaneous Clause | This additional clause mentions rules for resolving disputes, compliance with laws and amendment of the MoA. Moreover, it highlights the process of dissolution and closure of a business. |
How to Obtain MoA in the UAE
Business owners can draft an MoA on their own or consult a lawyer for this process. Here is how to draft and notarise an MoA:
1. Draft a Document
Start by drafting the different clauses of an MoA. In the UAE, MoAs must be drafted in the Arabic language. It is crucial that this document complies with the UAE laws, highlights the scope and limitations and mentions the business activities.
2. Review and Sign
Once drafted, the stakeholders and legal advisors review the document. During this process, necessary amendments are made to ensure legal compliance. Upon approval, all the shareholders sign the document.
3. Notarisation
After approval by stakeholders, the next step is MoA notarisation by the UAE Notary Public. It is a legal verification and validation of the document before company registration. The notarisation fee varies depending on your business activity.
4. Commercial Registry
Lastly, record the MoA with the economic department of the relevant emirate. If you want to register a company in Dubai, the Dubai Department of Economic Development (DED) is the right authority. On the other hand, the Abu Dhabi Department of Economic Development (ADDED) handles this service in the capital.
Hiring Professional Services
Obtaining an MoA yourself can be challenging, as it requires legal understanding. But you can always rely on professional services for a quick and hassle-free application. Some of the top companies are listed below:
- HHS Lawyers | +971-4-255-5496
- Legal House | +971-55-800-5160
- Al Mulla Lawyer & Legal Consultants | +971-58-998-4123
FAQs
There is no fixed cost for an MoA attestation. It depends on the business activity and the company’s value.
Obtaining a trade licence in Dubai starts with choosing a business line of activity, picking a sponsor and reserving a trade name. After this, gather necessary documents and submit a trade licence application to the Dubai Department of Economic Development.
That was all about obtaining a Memorandum of Association for your business. Follow the steps and consult a lawyer for a hassle-free application.
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