Legal nature of shares

Legal nature of shares for legality company, the legality of a company constitution and the nature of company shares are two issues that are addressed in a UAE company law case that has no legal definition but may be found on Federal Law NO.2 2005. Additionally, a transfer of assets that becomes effective only after a person files for bankruptcy is typically void, making this one of the few exceptions to the rule.

The partnership rights over the company are transferred in a share purchase transaction involving stock companies rather than the assets, management, actives, or passives of the company. The share purchase transaction is a transfer of a right, not an asset, according to the law.

A definition of company by law indicates to the legal activities required to purchase shares will depend on the form of partnership, the type of shares, and whether or not share transfers are prohibited.

To transfer ownership by the law, the company share or business share acquisition is then completed by full authorization of the share certificate and transfer of possession from the legitimate transferor to the transferee. A legitimate promissory transaction is not necessary for the transfer of registered shares because endorsement is a stand-alone declaration of intent. To purchase a share certificate, the act of disposal consisting of authorization and transfer of possession is both required and sufficient. The TCC makes no mention of the promissory transaction for the acquisition of shares.

Otherwise, in reality, the transmission and purchase of an economic whole that the partnership offers, as opposed to dividends, is the main concern when considering the acquisition of firm shares. Therefore, in addition to the act of disposal described above, the promissory transaction’s execution will also be required. This promissory agreement is frequently seen in the form of a share purchase agreement.

The act of disposal is the transaction that completes the mandate created by the promissory transaction, and the promissory transaction is the initial step in that process. The transferor assumes the obligation to convey ownership of the shares to the transferee through the promissory transaction, therefore the transferee cannot get ownership of the share certificate only through the promissory transaction. An implementation act of disposal is required for the firm share acquisition transaction to be valid as a legality corporation.

A share is an interest of a shareholder in the company
1. It The mandatory to fund a business.
2. Interest.
3. Contained of agreements and by Federal Law NO.2 2005, as well as a common interest.

Within the firm, a shareholder has rights, such as financial rights and the right to attend general meetings. And keep in mind that a company is a distinct legal entity.

Four principle benefits of a shareholder
1. Contractual rights under the Federal Law NO.2  contract.
2. Distributions of capital on winding up.
3. No right to ownership of company assets.
4. Voting
5. Dividends




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