Legislation Details
- Full Title: Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities
- Law Type: Cabinet Resolution
- Law Number: No. (83) of 2023
- Issued Date: 20 Jul 2023
- Effective Date: 01 Aug 2023
- Official Gazette: No. 756
- Sector: Economy and Business
- Status: Active
- Number of Articles: 12
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution sets out the procedures, controls, and conditions required for public joint-stock companies in the UAE to practice commercial agency activities. The resolution aims to regulate and provide a framework for public companies to engage in commercial agency work, which involves representing foreign principals and distributing their products or services in the UAE market. The resolution is significant for businesses as it clarifies the legal requirements and restrictions around public companies acting as commercial agents, which can impact their operations and compliance obligations. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 1-6)
What is the scope and purpose of this law?
The Cabinet Resolution applies to public joint-stock companies established in the UAE that wish to practice commercial agency activities. It regulates the conditions, controls, and procedures that such companies must follow in order to engage in commercial agency work. The purpose is to provide a legal framework and set of requirements for public companies to represent foreign principals and distribute their products or services in the UAE market. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 1-2)
What are the key definitions under this law?
The Resolution defines the following key terms:
- Public Joint-Stock Company: A public joint-stock company established in the UAE, in accordance with Federal Decree-Law No. (32) of 2021 on Commercial Companies.
- Electronic Services Platform: An electronic platform dedicated to registering commercial agencies in the Commercial Agencies Register.
- Law: Federal Law No. (3) of 2022 regulating Commercial Agencies.
(Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 1)
What are the main obligations and requirements?
The Resolution imposes the following key obligations on public joint-stock companies wishing to practice commercial agency activities: 1. The shareholding of UAE citizens must be at least 51% of the company's capital. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(1)) 2. The company must maintain its legal form as a public joint-stock company throughout the period it practices commercial agencies. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(2)) 3. The company's activity and purpose must be the practice of commercial agencies. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(3)) 4. The company must meet the necessary conditions and requirements for registration in the commercial agencies register at the Ministry of Economy. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(7))
What licensing, registration, or approval requirements exist?
The Resolution requires public joint-stock companies to: 1. Register the commercial agency through the electronic services platform of the Ministry of Economy, under a request for entering the commercial agency in the commercial agencies register. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 3(2)) 2. Obtain the necessary approvals and permits from the competent authorities and entities in charge of the nature of commercial agencies, when required, including the Securities and Commodities Authority and any other relevant authorities. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 3(3))
Which authorities or bodies are responsible for enforcement?
The Resolution does not specify any particular authorities or bodies responsible for enforcing its provisions. However, it does state that public joint-stock companies must: 1. Meet the necessary conditions and requirements imposed by the competent authorities and any official authority in the UAE, including the Securities and Commodities Authority, whenever this is necessary due to the nature of the commodity or service, the subject-matter of the commercial agency or company contract. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(8)) 2. Provide the Ministry of Economy with the information it needs. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(9)) 3. Promptly notify the Ministry of Economy of any change made to any of the conditions and controls, as well as any change that may affect the company. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 2(10))
What are the penalties for non-compliance?
The Resolution does not specify any penalties for non-compliance with its provisions.
How does this law interact with other UAE legislation?
The Resolution references the following related UAE legislation: 1. Federal Law No. (3) of 2022 Regulating Commercial Agencies, which is defined as the "Law" in this Resolution. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 1) 2. Federal Decree-Law No. (32) of 2021 on Commercial Companies, which is used to define the term "Public Joint-Stock Company". (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 1)
When did this law come into effect?
The Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities was issued on 20 July 2023 and came into effect on 1 August 2023, the day following its publication in the Official Gazette No. 756. (Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities, 2023, Art. 6)
Source Documents
This article analyses Cabinet Resolution Concerning the Procedures, Controls, and Conditions Required for Public Joint Stock Companies to Practice Commercial Agency Activities for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.