The formation of a company requires some legal aspects to be covered. A company’s prime document required for formation is called memorandum of association. This documents details the name and addresses of business location of a company, the number of directors and the number of shares with which it proposes to start the business and most importantly the nature of the business it would undertake. The nature of business is the most important one from the financial aspect as well because when a company is formed and then starts its operations it might get involved in other operations as well and this may cause some legal repercussions also. The other most prime document for a company is called the articles of association.
This document is a detailed document which is actually the set of rules procedures and guidelines that govern the regulation of the company. It states the procedure for the conduct of meeting, the way voting shall be done in any of such meeting for the resolution introduced and how the meeting would be adjourned and the instance where the adjournment would be acceptable. These two documents might be named differently from country to country but in most countries they are present and the purpose they serve is mostly similar.
Company formation in Dubai is not an easy as well as an uphill task. The formation requires moderate level of efforts. This fact is stated because in many countries the formation of companies is a strict and stringent process and would require considering several aspects. The legal aspects are the most painful and require time and money also. The legal aspects are the most important to consider and UAE companies that are newly formed spends high amount in their compliance. This is the reason why the demand of those who have studied and practically applied the rules and regulations governing companies are in good demand. Those having good command over company law are paid high in newly established as well as older companies.
The demand for such people never decline. One primary reason is that because there are so many changes being introduced often quickly in company laws that require immediate implementation and compliance on the part of the companies. When companies have hired such people who have good command over the laws it is not possible that any non compliance would be made. So in this way it can be said that such people would always be in good demand. Newly established companies incur high legal expenses. The two main reasons include payment of fees to external legal council and payment of miscellaneous expenses. The payment of fees to external legal council is something a company cannot avoid. The external council fights several cases that are sued by the customers or suppliers (third parties) to the company and those that the company has filed over third parties. In respect of miscellaneous expenses the money involved is low and can be met easily by smartly managing the cash flows of the company.
Hosam Habib is an expert Media consultant and Journalist associated with Dubai Media City, a Dubai-based international company that host all Media related companies. He use to write bout UAE companies, Company formation in Dubai and also writes News Channels, Human Rights, Print Media, Electronic Media, Child Labour etc.
Establishment of Companies and the Role Played by the Entity