A Memorandum of Association is a binding contract signed by all the founders of the company.
The Memorandum of Association specifies the rules and laws governing the company. Within this document, there is usually a clause that states that in the case where there is a disagreement between the founding members it should be referred to an arbiter for mediation/arbitration.
In Dubai, both public and private limited companies must file their Memorandum with the Dubai Government’s Department of Economic Development (DED). This must be done within seven days of incorporation and updated occasionally throughout the life of the company.
Contents of memorandum of association:
The following are some of the contents of the memorandum of association clauses:
This clause contains the name of the company and its address. This name should not be similar to any other business name registered in Dubai. For example, if you want to start a new catering business then you cannot use the same name as that of your competitors. The name of your company should be unique and should not be similar to other companies registered with DED. You can check out if there are any similar names by searching in DED’s database.
Object Clause :
The object clause describes the purpose of incorporation. It defines what activities can be carried out by the company and what cannot be done. It also states that no other activity will be carried out by the company except those specified in the memorandum.
The liability clause states that shareholders are not liable for any losses incurred by the company unless they have committed fraud or criminal negligence or have guaranteed loans or debts on behalf of the company without authority from shareholders at a general meeting held after such guarantee was given. In case of loss due to failure to comply with these requirements, shareholders are liable for their own actions and decisions as well as those of directors acting within their powers when such losses were incurred by reason of any act or default done with intent to defraud creditors or members
Capital Clause :
This clause states how much capital has been paid by each shareholder and how much more needs to be paid by him/her before starting a business setup in Dubai.
Association Clause :
This section contains details about how many members are needed to form an association, who can become a member etc.
The purpose of a Memorandum of Association is to establish the identity of the founders and shareholders of a business. It is also used to outline the roles and responsibilities of board members, as well as certain policies and procedures for the company. A Memorandum of Association is required for business registration in UAE, so it must be translated, notarized and attested by various departments and ministries in your home country and then sent to MOFA for verification.
Difference between Memorandum and Articles of Association:
A memorandum is a document that contains the purpose, scope, and extent of the business activities of a company. The draft of the Memorandum is a short note to record how the company was started.
Whereas The articles of association are the constitution of a company. It contains the rules that govern how the company is managed and what powers are vested in its directors and shareholders.
Validity of MOA:
The validity of the memorandum of association depends on the laws of the state in which you are registered. In Dubai, for example, your memorandum of association must be submitted to the government and approved by them before you can register as a legal entity with the Ministry of Economy and Commerce. Once it is approved, your registration will be processed within 30 days. If you do not submit your memorandum of association within six months after incorporation, your registration will be canceled automatically.
We are a Legal House law firm that provides assistance with all aspects of company law, as well as business law. We also provide legal services to private companies, real estate companies, general trading companies, and limited liability companies.
We specialize in drafting memorandums for all kinds of businesses.
Our team is highly skilled and has experience in drafting memorandums for all kinds of businesses. We can help you with the following services:
1) Drafting Memorandums for Real Estate Companies.
2) Drafting Memorandums for Private Companies.
3) Drafting Memorandums for Sole Proprietorship.
if you are looking for any commercial contracts in Dubai or the entire UAE, feel free to contact us. we are glad to help you.