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Importance of Memorandum Of Association while setting up the company in UAE

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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memorandum association, UAE, Foreign affairs, company, Arabic, federal, legally, stakeholder

If you are planning to set up a company in the UAE, one of the most important documents you will need in the process of incorporation of a company is a Memorandum of Association (MOA). 
Here is all you need to know about the Memorandum of Association (MOA) and its importance of it.

What is a Memorandum Of Association?

A Memorandum Of Association (MOA ) is a document that lists out the complete scope of a business’s operations and is prepared during the formation process of the company to determine the relationship with the stakeholders. 

It further establishes the objectives for which the company has been formed. A Memorandum Of Association (MOA) outlines the rights and powers of the company.

A company is permitted to only engage in the activities listed within the MOA. It creates a broad boundary for the company’s actions also protects the shareholders’ money and ensures that they are not exposed to risk in other unrelated activities of the company.

The MOA also lists the office address, names of the shareholders, the firm’s name, and share distributions in the company.

The MOA should be in Arabic and notarized -

The Memorandum Of Association (MOA) should be in Arabic, and it also must be notarised, for it to be valid.

If the MOA is published in any other language, the Arabic version will have precedence in the UAE.

For the MOA to be effective, it must be recorded in the commercial register of the economic department in the Emirate or the free zone authority within which the company has been registered.

In case of failure to register the MOA in the eyes of third parties, it will be considered as ineffective. However, in case if only a portion of the MOA is not registered then only that portion will be ineffective in the eyes of third parties.

Importance of attested MOA - 

As per the UAE’s federal laws, it is legally mandated to attest the document. The business license application will be rejected if the  MOA is not attested and will be considered invalid.

The MOA needs to be attested by a notary in the UAE and in the scenario where the MOA is to be presented outside UAE  for business purposes the additional attestation from the Ministry of Foreign Affairs and International Cooperation (MOFAIC), as well as the UAE Embassy in the respective country, is required. 

The MOA is the foundation on which the company is created and then built on. As stated above, it is very important for a company to list its Business activities.

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