When Did CCL 2021 Come into Effect?

The UAE implemented its updated Companies Law (CCL 2021) on January 2, 2022, replacing the earlier CCL 2015 as part of sweeping reforms for the UAE’s 50th anniversary. These changes aim to modernize corporate operations, support compliance and create business opportunities.

Overview of the New UAE Companies Law

CCL 2021 requires businesses to update their documents and operations, offering more flexibility in capital structuring, mergers and public listings. These reforms aim to attract foreign investments, boost corporate governance and align with global standards.

Which Companies Are Covered by CCL 2021?

CCL 2021 applies to most onshore companies like LLCs and PJSCs, introducing new entities such as:

• Special Purpose Acquisition Companies (SPACs)
• Special Purpose Vehicles (SPVs)

Exemptions apply to government-owned and specific sector companies.

Key Updates for Public Joint Stock Companies (PJSCs)

• Removal of minimum share value and authorized share capital.
• Ability to issue discounted shares with approvals.
• Company division into multiple entities.
• Director compensation of up to AED 200,000 annually.

Key Updates for Limited Liability Companies (LLCs)

• Six-month board continuity extension.
• Supervisory Board for companies with over 15 partners.
• Digital shareholder meetings with reduced quorum.
• Statutory reserves reduced from 10% to 5%.

Effects on M&A, IPOs and SPACs

The updated UAE Companies Law brings notable changes to Mergers & Acquisitions (M&A), Initial Public Offerings (IPOs) and the introduction of Special Purpose Acquisition Companies (SPACs):

Mergers & Acquisitions:
Under the CCL 2021, the process of M&A has been streamlined, allowing Public Joint Stock Companies (PJSCs) to issue shares either below or above their nominal value, as long as they secure approval from shareholders and the Securities and Commodities Authority (SCA).

Initial Public Offerings:
The new law introduces adjustments to IPO procedures, including a revised subscription window for public offerings that can run for up to 30 days, with the possibility of extension if needed.

Special Purpose Acquisition Companies (SPACs):
For the first time, CCL 2021 establishes a regulatory structure for SPACs, enabling these entities to be listed on the market and merge with private companies, offering an alternative route for businesses to become publicly traded.

Corporate Social Responsibility (CSR) Enhancements

PJSCs can now support social initiatives more freely with fewer restrictions on donations.

How RBK Business Setup Assists with Compliance

RBK Business Setup plays a vital role in guiding companies through the updated UAE Companies Law (CCL 2021). They offer professional support throughout the business registration process, making sure all legal requirements are met according to the latest standards. RBK provides tailored advice on choosing the right company structure, considering ownership rules, governance obligations and helping secure the necessary licenses for mainland, free zone, or offshore setups.

Committed to ensuring full compliance, RBK assists businesses in meeting the new corporate governance, transparency and reporting obligations. Beyond setup, they also manage visa and immigration processes, keeping companies aligned with current visa laws. RBK continues to support businesses after formation by handling modifications to company structures when needed, helping maintain investor confidence by optimizing business operations under the CCL framework.