Regulations for private shareholding firms

The Ministry of Economy (MoE) has finalised a new ministerial resolution to better regulate and improve the working of private shareholding companies, incorporated in the country, to protect the interests of shareholders.

The 'Governance regulations of private shareholding companies' resolution specifies the responsibilities and duties of the board members and the executive management of the company.

The resolution also aims to control and provide internal auditing of procedures undertaken by the company in order to verify its commitment to laws, regulations, and decisions governing its work.

The new resolution details the specific roles and functions of the members of the board of directors (BoDs), including the chairman. It also mandates the BoDs to create permanent committees for follow-up/remuneration that handle policies regarding remuneration, privileges, salaries and auditing, and whose main duties involve auditing the company's accounts and financial systems.

Also incorporated in the resolution are the rights of shareholders and rules of occupational conduct applicable across all levels of the company.

The resolution was drafted by a special committee appointed by the Ministry in view of the UAE Government's recognition of the growing role of private shareholding companies in the economic growth of the country.

Hamaid Ali bin Butti Al Muhairi, Assistant Under-Secretary for Companies and Control Affairs, Ministry of Economy, said the ministry has developed a special regime for the 'Governance regulations of private shareholding companies'.

He said that the number of private shareholding companies has greatly increased, along with the magnitude of their investments and the wide base of shareholders, which has tremendously boosted their contribution to the economic development of the country.

"To optimise the effectiveness of the new law, the ministry conducted a series of initiatives, including posting a draft version of the resolution on its web site, to gather the opinion and proposals of concerned parties," he said. The ministry also held a number of discussions where it received valuable inputs from private shareholding companies, he concluded. Source