Newsletter Archive

Newsletter 09/2017 Newsletter 05/2017 Newsletter 02/2017 Newsletter 12/2016 Newsletter 06/2016 Newsletter 09/2015 Newsletter 05/2015 Newsletter 02/2015 Newsletter 01/2015 Newsletter 12/2014 Newsletter 11/2014 Newsletter 09/2014
 

Newsletter 09/2017

Member profile | Banks Legal

 

tl_files/ABCD Newsletters/Newsletter html/September 2017/BLC Logo.jpg

Banks Legal can assist you with carrying out a review of your existing business structure and practices to ensure compliance and manage risk.

A Health Check for your Business

It is important to conduct a periodic review of your business to ensure you are

  • compliant with applicable legal requirements,
  • structured in an optimal way, and
  • are aware of potential issues on the horizon of your business.

It is advisable to regularly revisit these issues from time to time, as the nature of your business or the applicable legal requirements may have changed.  A thorough health check will help identify areas of weakness and any potential liabilities, giving you the chance to mitigate any risks.

Areas of focus:

Licensing: 

There are numerous licences required to conduct business activities in the UAE.  It is important to regularly review your business activities and ensure you have all required licences and permits in place.

Failure to do so could result in sanctions from government authorities, including fines or temporary suspension of your ability to conduct your business. 

Compliance with the Companies Law:

Limited Liability Companies (LLCs) were obliged to update and/or amend their memorandum of association before 30 June 2017, in order to be compliant with the new UAE Companies Law.

LLCs that have not implemented these changes by the deadline are at risk of being dissolved automatically and/or incurring fines (a fine is specified in the new Companies Law as AED 2,000 per day).

Mandatory changes include (amongst others):

  • inclusion of LLC address,
  • reference to how share pledges may be made,
  • changes to quorum requirements, and
  • changes to voting requirement for passing ordinary and special resolutions of a general assembly of an LLC.

Corporate Structure:

Corporate structure is given a lot of thought when a business is first started or a company moves into a new jurisdiction, but not thereafter.This can be costly. 

It is important to ensure your company’s corporate structure supports the current operations of your business and future expansion, limits liability and protects your investments.

Review whether new corporate vehicles should be introduced to protect a business and its assets, from potential risks and liabilities, from other parts of the business.

Further consider the benefit of potentially relocating your company to one of the numerous free zones.

Review of Constitution, Shareholder and Licence Agreements:

It is advisable to revisit these whenever there are significant changes in your business. This is to ensure your interest are properly protected and there are appropriate agreements and mechanisms in place to govern any potential disputes.

Intellectual Property:

Being protected by up-to-date registrations is critical to the value of your business.

As your business expands, you should consider registration in additional jurisdictions.

If you rely on intellectual property owned by others, ensure the terms of your licence agreements are robust. Further, confirm the licensor does in fact own the intellectual property and has taken reasonable steps to protect it.

Employment:

People are essential to the success of all businesses, and a few key employees often build-up knowledge that is impossible to replace.  It is advisable to consider if your employment contracts help prevent your competitors from poaching your staff, and ensure your employees cannot take sensitive information.

You also need to be aware of the rules for hiring and firing staff, to ensure your business is not exposed to unnecessary liability.

Gratuity:

Companies need to be mindful of the requirement to make gratuity payments when staff leave, and ensure they have correctly calculated and budgeted for these payments.

Commercial Contracts:

All companies should have processes in place to ensure they receive suitable advice before entering into commercial contracts.

If you enter into a large number of contracts, we recommend you develop standard agreements to use as a starting point.  Or develop checklists to make sure you are assessing and managing the key risks.

You should review these from time to time to check they still meet your needs, and to update them to reflect changes to your business, lessons learnt, and relevant legal developments.

Corporate Governance and Director Liabilities:

Directors have a range of legal duties and the consequences of breaching these can be significant. It is important directors are aware of these duties, and all decisions are made in accordance with relevant corporate documents and laws, and properly documented.

If your company finds these requirements burdensome, consider if you can amend your corporate documents to streamline the process while still maintaining suitable checks and balances.

 Key Contacts:

tl_files/ABCD Newsletters/Newsletter html/September 2017/Nathan - 1 - edit - crop.jpg

Nathan Banks  

Managing Partner

M +971 (0)50 189 3276

E Nathan@bankslegal.com

tl_files/ABCD Newsletters/Newsletter html/September 2017/andrew-1-edit-crop.jpg

Andrew Morris  

Partner

M +971 (0)50 653 8148

E andrew@bankslegal.com

About Banks Legal

Banks Legal is a boutique UAE legal consultancy consisting of legal staff with over 60 years of combined UAE legal experience.  Banks Legal places an emphasis on providing commercial and pragmatic solutions utilising its strong understanding and experience of the UAE business environment. For more information on our firm please visit www.bankslegal.com. Banks Legal is a member of the ABCD

© 2017 by ABCD UAE | powered by ECHT.ME