In a significant development aimed at bolstering economic transparency and regulatory compliance, the UAE Ministry of Economy has enacted new legislation requiring all companies operating within the jurisdiction of UAE (with the exception of companies in ADGM and DIFC and government entities) to maintain a meticulously updated ‘Corporate Register’. This initiative stems from Cabinet Resolution No. 109 of 2023 issued on December 15, 2023, and Cabinet Decision No. 132 of 2023, issued on November 16 2023, which underscore the government’s commitment to clamping down on financial discrepancies and enhancing the business environment. The updated register must include comprehensive details of a company's Ultimate Beneficial Owners, shareholders, and directors, among other critical operational data. This article will delve into these new requirements, their implications for your business, and how you can ensure compliance to avoid potential penalties.

Understanding the Corporate Register Requirement

The Corporate Register is designed to serve as a fundamental record, housing essential information about a company’s structure and governance. It plays a crucial role in ensuring transparency, aiding regulatory bodies and financial institutions in performing due diligence, and enhancing trust in the UAE's business ecosystem. For newly registered companies, the register must be compiled and ready for inspection within 60 days from the date of registration. Existing companies are required to update and prepare their registers within 30 days upon receipt of the circular regarding these new rules.

Additionally, it is the responsibility of each company to ensure that their corporate secretarial records, including minutes of the board and shareholders meetings, notices, and agendas, etc. are kept up-to-date since these records are subject to verification by the authorities. Importantly, any changes to these records must be communicated to the relevant licensing authority within 15 days. Companies are also required to update these documents on the government portal and submit the updated client documents.

Failure to comply with these mandates can lead to severe repercussions. According to the new regulations, non-compliance may attract fines up to AED 100,000, or may result in temporary suspension of the trade license or even closure of business. Furthermore, compliance with these directives is subject to scrutiny by the licensing authority, making adherence not just a legal obligation but a critical component of operational integrity.

Conclusion

The UAE’s latest legislative updates represent a significant step towards a more transparent and well-regulated corporate landscape. For companies, the task of updating or establishing a Corporate Register can seem daunting. However, timely compliance is not only about adhering to legal mandates but also about fostering a business environment characterized by trust and transparency, pivotal for long-term success.

How MBG Corporate Services Can Assist

At MBG Corporate Services, we understand the complexities and challenges businesses face in aligning with new regulations. Our team of legal and compliance experts is equipped to offer comprehensive support to companies in all UAE jurisdictions, ensuring that your Corporate Register as well as corporate secretarial compliances, are up to date and compliant with the new regulations. Whether you are establishing a new enterprise or updating records for an existing company, our professionals can guide you through each step, ensuring that every detail is meticulously documented and compliant with the new laws.