Your New Guide to AGMs in the UAE: Unlock the Results You Need for Your LLC or FZ-LLC
The Annual General Meeting (AGM) is crucial for companies in the United Arab Emirates (UAE), allowing partners to discuss key business matters and make important decisions. Here’s a comprehensive overview of AGMs for Limited Liability Companies (LLCs) and Free Zone Limited Liability Companies (FZ-LLCs).
What Are the AGM Requirements for LLCs and FZ-LLCs?
In the UAE, LLCs must convene a general assembly at least once a year within four months after the financial year ends, though this timeline can vary according to the company’s memorandum and articles of association. FZ-LLCs have similar requirements, needing to hold a general meeting at least once every calendar year, also guided by their governing documents.
For private companies in the Dubai International Financial Centre (DIFC), AGMs are not mandatory unless specified in the Articles of Association, allowing for tailored timing and procedures based on internal governance needs.
How Are AGMs Conducted?
AGMs can be held either in-person or virtually, as permitted by Article 93(3) of the Federal Decree-Law No. (32) of 2021, which allows remote participation and voting. The general assembly can be called by the manager or board of managers, and partners holding at least 10% of the company’s capital can request a meeting, which must be announced at least 21 days in advance with all relevant details included.
What Are the Quorum and Voting Rights?
A valid AGM for LLCs requires at least 75% of the share capital present for a quorum. If this isn’t met, a second meeting can be held with a reduced quorum of 50%, and if necessary, a third meeting can proceed with any partners present. Every partner has the right to attend and vote at the AGM and can delegate their voting rights to a proxy, as long as the proxy does not represent more than 5% of the company’s capital.
What Powers Does the AGM Hold and How Are Financial Statements Handled?
The AGM has the authority to approve significant matters, including financial statements, manager reports, and dividend distributions. The board of directors is responsible for preparing financial statements in compliance with International Accounting Standards, which are then presented to the AGM for approval.
What Are the Documentation and Filing Requirements?
Typically, there is no requirement for LLCs and FZ-LLCs to file financial statements with the Department of Economic Development (DED). However, some free zones may require audited accounts for license renewal, so it’s essential to check specific requirements.
Conclusion: The Importance of AGMs
Understanding the AGM process is essential for compliance and success in the UAE. For those looking to enhance their approach to AGMs across various jurisdictions, Klea provides expert guidance. Our internal article, Unlock the Complete Guide to Changing Directors in South Africa: What You Need to Know for Compliance, offers valuable insights. With our extensive experience, Klea can help you navigate AGM requirements internationally. Explore more of our blog to elevate your corporate governance strategies!
