Guide to Memorandum of Association for UAE Companies

 

The Memorandum of Association (MoA) is a key legal document required for company formation in the UAE, defining the company’s ownership structure, business activities, shareholder rights,

and operational rules. It acts as the constitution of the company and is mandatory for Mainland, Free Zone, and LLC businesses. This guide explains the purpose, components, and drafting process of the MoA in the UAE.

Understanding the Memorandum of Association (MoA) for UAE Companies

A Memorandum of Association (MoA) is a crucial legal document that defines the company’s formation, ownership structure, share distribution, business activities, and operational framework. It must be signed and notarised by all shareholders to be valid.

The MoA is mandatory for:

  • Mainland LLC companies

  • Civil companies

  • Partnership firms

  • Branches that require a Local Service Agent (LSA)

  • Certain Free Zone companies (depending on regulations)

A business cannot be registered or obtain a trade license in the UAE without an approved and notarised MoA, making it essential for starting and legally operating any company.

Why is the Memorandum of Association Important?

A well-drafted Memorandum of Association (MoA) is essential for ensuring a strong legal and operational foundation for any company in the UAE. It provides:

  • Transparent ownership structure

  • Clearly defined shareholder roles and responsibilities

  • Clarity on approved business activities

  • Legal protection for all partners and investors

  • Smooth business operations with minimized disputes

  • Full compliance with the UAE Commercial Companies Law (CCL)

For LLC entities in the UAE, the MoA formally defines the relationship between shareholders and safeguards the rights and obligations of all parties involved.

Key Components of a UAE Memorandum of Association

Although every MoA is tailored to the specific business, several core clauses are legally required under UAE company formation laws. The most important components include:

1. Company Name & Legal Structure

Defines the official registered company name and the legal entity type (e.g., LLC, Civil Company, Partnership) — for example, “ABC Trading LLC”.

2. Business Activities

Specifies the approved activities the company is allowed to conduct as per the DED or free zone license.
 Note: The business can operate only within the activities listed in the MoA.

3. Office Address & Registered Location

Identifies the registered business address, including the Emirate of registration and whether the company is located in a Mainland or Free Zone.

4. Share Capital & Ownership Structure

Outlines the total share capital, share distribution among partners, voting rights, and capital contribution obligations — one of the most important clauses in the MoA.

5. Shareholder Details

Lists complete information for each shareholder, including name, nationality, address, ID/passport details, and ownership percentage.

6. Profit & Loss Distribution

Specifies the profit and loss sharing arrangement between partners.
 Note: In UAE LLCs, distribution is not required to match ownership percentage.

7. Management Structure

Defines the appointed manager(s), their powers, term of appointment, and decision-making authority.

8. Duration of the Company

Indicates the validity period of the company, typically set as perpetual unless otherwise agreed.

10. Mandatory Compliance Clause

Confirms that the company will adhere to UAE Commercial Companies Law, DED regulations, and any applicable Mainland or Free Zone rules.

 MoA Requirements in Mainland vs Free Zone Companies

Although the structure of the MoA is generally similar, requirements differ across jurisdictions:

Mainland Companies

  • MoA must be notarised at the Notary Public

  • Mandatory for LLCs, Civil Companies, and Sole Establishments (with LSA)

  • Local sponsor clause removed after 100% foreign ownership reforms (except restricted sectors)

Free Zone Companies

  • Some free zones require both MoA and Articles of Association (AoA)

  • Digital MoA signatures are accepted in many free zones

  • Notarisation is usually not required

How to Draft an MoA in the UAE – Step-by-Step

  • Choose the company legal structure (LLC, Free Zone, Civil Company, etc.)

  • Select the approved business activities from DED or Free Zone list

  • Define share capital and ownership distribution

  • Prepare the MoA in line with UAE Commercial Companies Law

  • Get the document reviewed by a legal advisor or PRO

  • Notarise the MoA for Mainland or digitally sign for Free Zones

  • Submit to the licensing authority to complete business registration

Downloadable MoA Format (Sample Template)

A simplified sample Memorandum of Association (MoA) commonly used for UAE LLC companies is provided below.

Sample MoA Format for a UAE LLC 

  1. Company Name: ABC Trading LLC

  2. Legal Form: Limited Liability Company

  3. Activities: As per DED-approved activity list

  4. Share Capital: AED 300,000 (300 shares @ AED 1,000 each)

  5. Shareholders: Mr. John Doe – 100%

  6. Address: Dubai, UAE

  7. Management: Mr. John Doe as Manager for 5 years

  8. Profit & Loss: As agreed between shareholders

  9. Liquidation: As per UAE Law No. 32 of 2021

  10. Compliance: Adherence to UAE regulations

How Proficient Accountants Can Help

At Proficient Accountants UAE, we offer:

  • MoA drafting, review & updates

  • Mainland & Free Zone company formation

  • License amendments & activity additions

  • Full compliance support (VAT, Corporate Tax, Accounting)

We ensure your MoA is legally compliant, protects shareholder interests, and supports long-term business success.

Location: Dubai - United Arab Emirates

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