Business LAw 1 Assignment Example | Topics and Well Written Essays - 1000 words

Business LAw 1 - Assignment Example The product of trade for this company is a motor vehicle spare part. It is imperative to note that, a private company limited by shares members are required to pay amounts they owe to the company as its debtors in respect of shares that were sold to them on credit and have not been paid in full. This study considers a limited liability company. This is because; it is the most popular form of establishing a commercial company in the UAE. Additionally, and it blends aspects of both partnership and corporate structures. In addition, article 281 to 255 of the CCL regulates the establishment of limited liability companies. Furthermore, it requires a minimum capital of Dh 300,000. Conversely, under the amended UAE law of 1984, a private company must have at least two shareholders (American-Arab Affairs Council, 1984). The new law allows incorporation of a company by a sole shareholder holding all the shares in the company. The management of LLC is vested in the managers. On the same note, it is easy to establish a LLC in the UAE since it requires a business licence only (Wattson, 2003). A memorandum of Association under UAE commercial Companies law Lord Cairns judicially defined a memorandum of association in Ashbury Railway Carriage Co Ltd v Riche as the charter, which define the inadequacy of the powers of a corporation to be established under the Act (Pennington, 2005). The following are the contents to the ADC Company Limited’s memorandum of association. ADC Company Limited Memorandum of Association 2012 1st The name of the of the company is the ADC Company Limited 2nd The registered headquarters of the corporation will be located in Dubai (UAE) 3rd The objects for which the company is established are buying, exporting of the motor vehicle spare parts amid such places as the corporation may from time to time decide and the responsibility of other things as is conducive to the attainment of the above object. 4th The liability of the shareholders is limited 5th The share capital of the company is Dh 300,000 divided into 1000 shares of Dh 300 each (Dine, 2009). Two recent changes in the UAE Federal or local laws and their minimum effects on the business Essentially, numerous changes have been made in the Federal laws on the LLC. The most recent ones include the valuation of the non-cash consideration for shares and the Fiduciary-like obligations of LLC’s managers (Mamoud, 2001). The new provision provides that non-cash consideration for shares in LLCs shall be valued at the cost of the contributing shareholders by one or more consultants approved by the competent authority. In addition, the agreement of all shareholders, if a competent authority approves such value. The proposed valuation procedure for non-cash consideration for shares in LLLCs is more burdensome than the previous and existing CCL, which allows shareholders to consent on a valuation and replicate that valuation in the articles of the LLC (United Arabs Emirates & Hall, 1984). It is fundamental to note that, the only non-cash consideration, which is currently accepted by a majority of authority in some Emirates, is the real properties. The principal effect expected upon application of the new valuation of non-cash consideration on LLCs shares is that, it is time consuming and hectic in execution (Rao, Kashani & Marie, 2010). However, the new aspect of valuation of non-cash consideration is advantageous in providing a high level of accuracy and transparency. On the other hand, the CCL on Fiduciary-like ob