Memorandum of Association (MoA) in UAE: Meaning, Format, Clauses, & How to Draft It?

The Memorandum of Association (MOA) is the first legal document a company needs to prepare for the formation of a company in the UAE. This document defines a company’s structure, objectives, purpose, and operational boundaries. 

Whether you wish to set up a company or a partnership firm, understanding the format and compliance of MOA is essential in UAE. This guide covers the meaning, purpose, importance, and steps to obtain a MoA in UAE. 

What is a Memorandum of Association (MoA) in UAE?

The MoA is a basic legal document in the UAE, representing the objectives, scope of operation, and obligations of the company's shareholders. It is an integral step as a company can only be registered with a valid MoA in place. Essentially, the MoA specifies the entity’s name, purpose, capital structure, and liability limits, ensuring compliance with UAE regulations. 

Every company, whether LLC, Joint-stock company, or even family business, must prepare an MoA. It is a blueprint for businesses to conduct their operations to comply with UAE regulations. Proper drafting and attestation of the MoA will help avoid any legal discrepancies and smoothen the incorporation process. 

Importance of Memorandum of Association

The Memorandum of Association is important in the following ways: 

• It acts as the cornerstone for business formation by defining the legal framework of operations.
• It reassures investors and stakeholders that the corporation is valid and follows all rules and regulations. 
• Provides clarity in governance by detailing operational limits and roles. 
• Helps maintain corporate accountability by ensuring that liabilities are made clear.
• Smoothen the process of audits and regulatory checks, as it serves as a formal reference document.
•  Builds trust among partners with transparency in agreements and contributions.
• Provides decisive guidelines concerning the provisions of a company and its objectives in case of any legal disputes.

Clauses of Memorandum of Association (MoA)

The Memorandum of Association contains specific clauses intended to define the scope and operation of the company. These include:

How to obtain a Memorandum of Association in UAE?

This is how you can obtain a Memorandum of Association Dubai: 

Step 1: Drafting of MoA

• Draft your MoA, which should outline the objectives of your company, structure, and scope of operation. 
• This draft has to correspond with UAE law and your business requirements. Consulting a lawyer would be great to make sure everything is compliant with the UAE laws.

Step 2: Notarization and payment of fees

• After the MoA is verified and approved, it shall be notarized with the UAE Notary Public. This step is required for the legalization of the document to be considered valid for the registration of your company.
• Depending on the type of business, you have to pay government fees for the registration and issuance of the document. 
• The final MoA will be issued after notarization and final approval. It will then form the basis for your company's registration and operation in the UAE.

Step 3: Attestation of MoA

• As per Federal Law, attestation of an MoA is mandatory. Without it, businesses are not permitted to apply for a business license. 
• An MoA can be attested by the Ministry of Foreign Affairs (MOFA) in the UAE or the ministry of the foreign investor’s domestic country. 
• An attested MoA depicts that it complies with the UAE's rules and regulations and acts as a foundation for operational establishments in the UAE. 

Step 4: Submitting the MoA in the commercial registry

• Post notarization,  the MoA should be recorded in the commercial registry of the applicable emirate or within the applicable jurisdiction where the company’s registered office is. 
• This step is important to apply for a business license and commence operational activities. 

Valid MOA Requirements

• Arabic language requirement: The MoA must be written in Arabic, with the Arabic version taking precedence in legal matters, as per UAE regulations.
• Notarization: The MoA must be notarized to verify its authenticity and validate the signatures of the involved parties.
• Registration: The MoA must be registered with the free zone authority or relevant Emirate's economic department to formalize the company's existence.
• Legal Recognition: An unregistered MoA will not be considered valid in dealings with third parties.

Purpose of MoA in UAE

The Memorandum of Association is drafted for the following purposes: 

• It establishes the company’s legal identity by defining its objectives and permitted activities.
• It serves as a major document in obtaining licenses and approvals from regulatory authorities in the UAE.
• It outlines the financial structure, including share capital distribution and shareholder contributions.
• It protects stakeholders by clearly stating the liability limits for shareholders and directors.
• It acts as a reference document in the resolution of disputes or ambiguities in corporate operations.

Memorandum of Association Format

Here is a sample of the MoA format: 

MEMORANDUM OF ASSOCIATION OF [COMPANY NAME]

Name of the Company

The name of the company shall be "[Company Name]. 

Registered Office

The registered office of the Company will be situated at [Full Address], Dubai, UAE.

Objectives of the Company

The main objectives for which the company is established are as follows:

1. To carry on the primary business activity.
2. To carry on the business of [Secondary Activities].
3. To undertake [Other Business Activities].

Share Capital

The amount of share capital of the company. 

Liability of Members

The liability of the members will arise only up to the unpaid amount of shares held by them. 

Subscription of Shares

The undersigned, the original members, agree to take the following number of shares:

[Member Name] - [Number of Shares]

Dated: [Date]

Signatures:

What is AoA? How Does it Differ From An MoA?

The Articles of Association (AoA) is a legal document that outlines a company’s internal rules and regulations for its day-to-day operations. It acts as a manual that guides the management of the company, ensuring smooth functioning. While the Memorandum of Association (MoA) establishes the company's purpose and external relations, the AoA focuses on the internal governance and operational framework.

Here’s a quick comparison between MoA and AoA:

Conclusion

The MoA is the most important document for establishing and sustaining any business in the UAE. This basic document covers the company's name, objectives, liability, capital, and shareholders. A well-drafted MoA is essential in securing your company's legal standing and compliance.