Every company encounter its shares of ups and downs which pertinent for its growth and goodwill. However, the one who manages to recoup in such situation through various means remains intact. Accordingly, most companies in order to stay strong enter into merger or acquisition deals, however, the procedure for transferring LLC shares can be incommodious and may require Top Lawyers of Dubai to review relevant documents, ascertain company’s legal position and to draft requisite contracts for the sale of shares. Despite such requirement, Corporate Lawyers of Dubai have laid down certain guidelines for transferring shares of your limited liability company in accordance with the procedure of Department of Economic Development (DED) and Commercial Companies Law of UAE. Following paragraphs highlights significant steps involved in transferring of shares of LLC registered in UAE.

• Step 1 

The primary step is to conduct due diligence on the company whose shares you are buying in order to ascertain the company’s liabilities and assets and legal status. This procedure will help you determine if the company has any outstanding loan, credit, legal cases and the financial position of the company.

• Step 2 

The secondary step, post conducting the due diligence is to obtain the license amendment form from the DED, which can either be obtained from the DED website or from the DED office. The application form shall contain all the details regarding the buyer and seller and the manager of the company. It shall bear the signature of both the parties and other authorized signatories.

• Step 3 

Upon completing the requisite details of the license amendment form, the next step is to submit the application form along with relevant documents as requested by the authority which shall include shares transfer agreement, passport copy or Emirates ID of the buyer (if individual) and trade license, memorandum of association (duly attested) and shareholder resolution (duly attested) if the buyer is a corporate entity.  Apart from the documents of the buyer, the seller also has to submit all relevant documents including, but not limited to, memorandum of association, shareholders resolution and trade license.

• Step 4 

The seller and buyer are obliged to enter into a sale of shares agreement which will be considered as an amendment to the memorandum of association for the existing company. It is advised to have a detailed Sale of Shares agreement entailing all pertinent details concerning the parties, the new shareholding ratio and future management of the company. The Agreement shall be bilingual and duly attested by the Public Notary.

• Step 5 

The last step is to submit the sale of shares agreement (duly attested) to the DED along with other relevant documents for obtaining an initial approval. Upon receiving the initial approval, an advertisement will be published in the local newspaper for 30 days and post-payment of the required fees; the DED will issue the amended license.