A share transfer is a process of transferring already-existing shares in a Limited Liability Company (LLC). Each shareholder of an LLC owns a portion of the corporate company, and if they wish to sell the shares, alter their ownership percentage, or add new shareholders, they must do so.
A share transfer of 51% of the shares to a new local partner is required to change a local partner. The current 49%:51% shareholding ratio must be maintained since, according to UAE law, 51% of the shares of a Limited Liability Firm LLC must be owned by a Local Emirati National or a 100% Owned Emirati company.
Following compliance with the remaining provisions of this Section, company shares of an LLC are transferable without restriction, under any restrictions or limitations on the transfer of shares in the memorandum or articles of a corporate company.
Transfer of shares by operation of law and upon the death of a shareholder
1. Shares in a company may pass by operation of law, notwithstanding anything to the contrary in the memorandum or articles of the LLC company.
2. Subject to subsection.
3. The personal representative, executor, or administrator of a deceased member shall be the only person recognized as having any title to such share members but they shall not be entitled to exercise any rights as a member of the shareholder company until they have proceeded as follows:
(a) Any person who becomes entitled to a share or company shares as a result of the death of another member may register as a member upon producing any documentation that the directors may reasonably request. The directors must treat any such person’s application to be enrolled as a member as if it were a transfer of the deceased’s shares.
(b) Anyone who has acquired the right to a share or share company as a result of the passing of a member may, instead of registering themselves, request in writing that another person to be named by them be registered as the transferee of such share or share company, and such request shall also be treated as if it were a transfer.
3. Where a deceased member held business shares in the LLC company as a joint owner under Regulation 48, the deceased member’s ownership interest shall be extinguished and the surviving joint owners shall be the sole holders of the applicable shares.
Method of transfer of shares (LLC Company)
1. Shares of business are transferred through a transfer document that is signed by the transferor and the transferees and contains the transferees’ names and addresses. When transferees will hold shares jointly, the instrument of transfer may provide that the first named holder of the shares is unconditionally authorized to transfer the shares and make good receipts for any sale proceeds without the second named holder’s approval or signature. Any such provision shall be recorded on the members’ register and shall be binding for the second designated holders of such shares.
2. Within 30 days after signing, the company must receive the instrument of transfer and any information the registered agent is obliged to acquire by applicable anti-money laundering regulations and laws.
3. Unless the directors decide to reject or delay the registration of the transfer for reasons that must be predefined in the resolution, the organization shall, subject to the memorandum or articles and a subsection, upon receipt of an instrument of transfer, agree on the transfer of the shares and file the instrument of transfer with the Registration to enter the name of the transferee in the register of members.
4. Directors may not, according to a subsection, adopt a resolution that prevents or postpones the registration of a transfer unless:
(a) These Regulations or the memorandum or articles authorized them to do so; or
(b) The prospective transferee has not given the information that the registered agent of the LLC’s company shares is obligated to receive by the relevant anti-money laundering laws and regulations.
5. Unlimited shareholders companies are exempt from the limitation in the subsection.
6. The Directors approves a resolution under subsection, the company shall, as soon as is reasonably possible, send notice of the refusal or delay to the transferor and the transferee in the approved form.
7. If the shares being transferred are not fully paid, the directors may refuse or postpone the share registration, subject to the company’s memorandum or articles.
8. The transfer of a share takes effect when the Registrar enters the transferee’s name in the register of members.
9. The directors of a company may decide if they are confident that an instrument of transfer has been signed but that it has been misplaced or destroyed.
(a) To accept whatever proof of the transfer of the shares they deem appropriate.
(b) Despite the lack of an instrument of transfer, the transferee’s name should nonetheless be included in the membership register.
Along with the instrument of transfer, a copy of the aforementioned resolution must be given to the Registrar.
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