Public Shareholding Company Formation Services In Dubai, UAE
The United Arab Emirates is a popular business destination for foreign investors looking to start a firm. As a result, new enterprises and startups are rapidly emerging across the Middle East. Dubai provides its entrepreneurs with various corporate structures to choose from when starting a firm, one of which is a Public Shareholding Company (PSC). A Public Shareholding Company, also called a PJSC (public joint stock company), is a company where the business capital is divided into equal shares. Their respective number of shares limits each Shareholder's liability. Thus, we at Dhanguard pioneer in providing exemplary services and guidance to help you build your own Public Shareholding Company. Our team of seasoned experts is here to streamline the process and ensure your venture's success.
What is a Public Shareholding Company?
A Public Shareholding Company is a corporation in which the capital is divided into equal shares, and the liability of the shareholders is restricted to the number of shares in the business.
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In Dubai, a PJSC must have at least ten founding members, and its management must be delegated to a board of directors comprised of three to fifteen individuals whose terms of office cannot exceed three years.
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Only 35% of the share capital can be held by the founders, with the rest having to be sold to the general public. The Chairman and most directors must be UAE nationals in a public shareholding firm.
Why Choose a Public Shareholding Company in Dubai?
A Public Shareholding Company, also known as a Public Limited Company, offers numerous advantages for businesses looking to establish a strong presence in Dubai's thriving economy.
Here's why you should consider this legal structure:
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Access to Capital: By going public, your Company can raise substantial capital by issuing shares to the public, enabling you to fund expansion and investment opportunities.
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Transparency and Credibility: Public companies are subject to stringent regulatory oversight, enhancing their credibility and trustworthiness in the eyes of investors and stakeholders.
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Brand Recognition: Going public can significantly boost your Company's visibility and reputation, attracting more customers and partners.
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Exit Strategy: A Public Shareholding Company offers a clear exit strategy by selling shares, making it an attractive option for investors seeking liquidity.
What are the Key Features of a Public Shareholding Company in the United Arab Emirates?
There are a few significant features of the Public Shareholding Company which you should be familiar with. Let's check them out:
LIABILITY
The Public Shareholding Company's financial liability is considered separate from the financial liability of each of its shareholders.
ASSET DIVISION
The Company shall be liable for its debts and obligations with its assets and properties, and the Shareholder shall not be responsible for such debts and duties before the Company except in proportion to the shares he owns in the Company.
NAME OF THE COMPANY
The name of the Public Shareholding Company is drawn from its objectives, but it must be followed by the words "Limited Public Shareholding Company" everywhere it occurs. The Company may not be registered in the name of a natural person unless the purpose is to exploit a patent lawfully registered in that person's name.
SUBSCRIPTION
Subscriptions to the Company's shares must be open for a minimum of two weeks and a maximum of four weeks. If claims are not fully subscribed, founders may extend the subscription period for another two weeks with the Ministry's permission.
MANAGEMENT
A Manager or Management Committee will govern the Company for a definite period. Still, it should be at most three years, whose members must be at least two and seven, whether shareholders or others, in line with the Company Memorandum of Association. A shorter duration may be specified in the Memorandum. A chairperson, a deputy chairman, and those authorized to sign on behalf of the Company will be elected by the Management Committee. An extraordinary decision of the General Assembly can prolong a Public Shareholding Company's fixed term.
CAPITAL
AED 10 million (about $2.7 million) in capital is required to establish a public shareholding company in Dubai, with a nominal face value of AED 1 to 100. The minimum capital requirement for a banking firm is AED 40 million, whereas the minimum capital requirement for insurance and investment organizations is AED 25 million.
The preparation of a founders' agreement, a prospectus, or invitation for public subscription supported by an overall business plan or feasibility study and an auditor's certificate, a due diligence survey, a memorandum, and articles of association are the other requirements for forming a public shareholding company in Dubai.
SHAREHOLDING
The primary shareholders, or founding members, are entitled to 35% of the share capital, with the remaining 75% available to the general public.
MAJORITY
The Chairman and a majority of the management board must be Emiratis, and the UAE national must possess 51 per cent of the shares.
BRANCH
In most situations, local banking, insurance, and financial initiatives must be conducted as a PJSC, although international companies engaged in similar operations can create a branch or a representative office in Dubai.
What are the advantages of starting a Public Shareholding Company in the United Arab Emirates?
The general advantages of starting a Public Shareholding Company in UAE are listed below for a better understanding:
Ability to raise funds through the sale of shares
One of the advantages of public shareholding companies is that they can raise capital by selling stock to the general public. It is challenging to collect vast sums of funds before becoming public, other than through borrowing, to fund operations and new product offers. A private firm can only raise funds by reinvesting revenues, taking out a loan, or obtaining investments from a few affluent individuals who cannot help cover the company's financial needs.
Public shareholding corporations can raise money in the primary and secondary markets by enabling the general public to buy their stock. Public shareholding corporations can raise substantial cash on public markets, allowing them to engage in capital-intensive activities. In exchange, stockholders profit from stock capital gains and dividend payments.
Financial data is readily available
The SEC requires public corporations to produce quarterly and annual financial statements and other required documentation. Shareholders, financial media, interested investors, and financial analysts can acquire extra information about the company due to the requirement. Because financial information regarding the company is readily available, analysts may more easily calculate the company's valuation. On the other hand, private corporations are not legally required to make their financial reports public.
Formation of Public Limited Company in Dubai, UAE:
We at Dhanguard will help you form your Public Limited Company in Dubai, UAE, in the following ways:
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Preliminary Consultation: Our journey begins with an in-depth consultation to understand your business objectives, goals, and vision. During this phase, we analyze your suitability for a Public Shareholding Company and provide tailored advice to ensure it aligns with your long-term strategy.
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Legal Structure Selection: Based on the consultation, we help you select the most suitable legal structure for your Public Limited Company, ensuring compliance with local laws and regulations.
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Documentation and Registration: Our team of experts handles the meticulous paperwork, including drafting the Memorandum and Articles of Association, obtaining necessary approvals from regulatory authorities, and registering your Company with the relevant government bodies.
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Share Capital and Shareholder Requirements: We guide you in determining the required share capital and assist in securing shareholders for your Public Limited Company. Our extensive network and knowledge of local business practices ensure a smooth process.
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Regulatory Compliance: Compliance is critical to a successful public company. We help you navigate the regulatory landscape, ensuring your business adheres to all legal requirements, such as corporate governance and financial reporting.
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IPO Preparation: If you plan to take your Company public through an Initial Public Offering (IPO), we provide comprehensive support in preparing the necessary documentation, financial statements, and investor communications.
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Post-Incorporation Services: Our commitment doesn't end with registration. We offer ongoing support with corporate secretarial services, compliance, and regulatory filings, allowing you to focus on growing your business.
Public Company Registration Process:
The following is the process of public company registration in Dubai,UAE:
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Submit Application: We initiate the registration process by submitting the necessary documents and applications to the Dubai Department of Economic Development (DED) and other relevant authorities.
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Approvals and Licensing: We liaise with the DED and other government bodies to obtain the required permissions and licenses for your Public Shareholding Company.
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Document Verification: The authorities will review your submitted documents, ensuring compliance with all legal requirements.
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Publication: Upon approval, your Company's incorporation details will be published in the official gazette and local newspapers per the legal requirements.
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Issuance of License: Once all requirements are met, the DED will issue the license for your Public Shareholding Company, allowing you to commence operations.
Documents Required in the United Arab Emirates to Form a Public Shareholding Company
All the relevant documents required to start your own Public Shareholding Company are listed below-
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Founder's Agreement with Application for Registration and Licensing
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Approval of a Business Activity by the Government
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Invitation to Public Subscription Prospectus
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Support from the UAE Securities and Commodities Authority for public shareholding
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Certificate of Auditors
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Public Shareholding Resolution from the Ministry of Economy
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Survey of Due Diligence
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Two copies of the Feasibility Study for the Project
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Four genuine copies of the Memorandum and Articles of Association
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Public Notary
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Photocopies of the Contract for Office Space and the Registered Plot Number
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Written Acceptance of Appointment by the Appointed Board of Managers and Directors.
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Original documents containing the directors' names, dates, and places of birth.
The benefit of Financial Reorganisation in a Public Shareholding Company in the United Arab Emirates
A public shareholding corporation is formed to manage large projects, and its financial position changes annually due to its operations, profits, and losses. Deductions for asset depreciation or capital restructuring also affect the company's financial position because a company deducts a portion of its net profit and does not distribute these funds to its shareholders, instead putting them into the company reserves as additional insurance against future losses.
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These funds can also be utilized to ensure that shareholders get a standard annual dividend or to provide financial support to the company.
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Suppose a firm suffers significant financial losses that threaten shareholder, third-party, or creditor rights, cannot meet its financial obligations or exceeds 50% of its paid capital. In that case, it is said to be in "financial distress."
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In this case, the company will require "financial reorganization," which can be accomplished by negotiating with the company's creditors to restructure and settle the company's debts. The corporation may be able to avoid declaring bankruptcy if this is done. Mandatory default may be advised if the firm is legally unable to repay its obligations or losses reach 75% of its subscribed capital, and the Board still needs to resolve to enhance the share capital and successfully reduce the losses.
Get Started Today!
The benefits of forming a company in the United Arab Emirates are numerous. Embarking on creating a Public Shareholding Company in Dubai, UAE, is a significant step towards business growth and success. Let Dhanguard be your trusted partner, providing expert guidance and unwavering support throughout this process. Our team is dedicated to ensuring your venture's compliance, credibility, and prosperity in the dynamic business landscape of Dubai. Contact us today to get started on your path to public company success.
