Articles of Association in the UAE: Key Clauses, Governance and Amendments
- Federica Bertollini
- May 6
- 13 min read
Updated: 3 days ago
A company’s constitutional documents determine how ownership, management, decision-making, shareholder rights, transfers, and other fundamental corporate matters are governed. In the UAE, however, business owners should understand an important distinction. Not every company uses an Articles of Association, and the terminology depends on the company’s legal form and jurisdiction.
For mainland companies governed by Federal Decree-Law No. 32 of 2021 on Commercial Companies, as amended by Federal Decree-Law No. 20 of 2025, a Limited Liability Company is principally constituted through its Memorandum of Association, commonly referred to as the MOA. Joint-stock companies are also governed by Articles of Association, commonly referred to as the AOA. For a Public Joint Stock Company, the Commercial Companies Law expressly provides that the Articles of Association become binding on all shareholders once the company is registered in the commercial register.
The distinction matters because business owners frequently use the expression “Articles of Association” generically when referring to their company’s constitutional document. In practice, an LLC shareholder may actually need to review or amend the company’s MOA, while a joint-stock company may be governed by a separate AOA.
The federal Commercial Companies Law establishes formal requirements for company constitutional documents. Article 14 provides that the Memorandum of Association and amendments to it must be prepared in Arabic and attested by the competent authority. Where a foreign-language version is also prepared, the Arabic version prevails for application in the UAE. Attestation may be completed through the procedures determined by the competent authority, including electronic signature where permitted.
These documents are not merely incorporation paperwork. Depending on the company type, they can regulate matters including:
Shareholding and capital
Management powers
Appointment and removal of managers or directors
Voting rights
Shareholder and partner resolutions
Transfer of shares or ownership interests
Profit distribution
Reserved matters
Restrictions on transfers
Succession following the death of a shareholder
Company duration and dissolution
Exit arrangements between shareholders
The UAE strengthened the flexibility available to shareholders through Federal Decree-Law No. 20 of 2025. The amendments allow Limited Liability Companies and Private Joint Stock Companies to include provisions in their MOA or AOA dealing with matters such as drag-along and tag-along rights and mechanisms governing the ownership interests of a deceased partner or shareholder. These changes give founders and investors greater ability to structure ownership and exit arrangements in advance.
Free Zone companies require a separate analysis. UAE Free Zones are governed by the regulations of their respective Free Zone authorities, and Federal Decree-Law No. 32 of 2021 generally does not govern Free Zone companies in the same way as mainland companies. Depending on the Free Zone and legal form, the entity may have a Memorandum of Association, Articles of Association, both documents, or another form of constitutional document prescribed by the relevant authority.
Business owners should therefore understand exactly which constitutional documents govern their company rather than relying solely on the standard template received at incorporation.
This becomes particularly important when admitting a new shareholder, transferring shares, raising investment, changing management, modifying voting rights, restructuring the business, planning succession, selling the company, or resolving a disagreement between shareholders.
This guide explains what Articles of Association are in the UAE, how they differ from a Memorandum of Association, the clauses business owners should review, how ownership and governance provisions operate, when amendments may be required, and why constitutional documents should evolve as the business grows.
Memorandum of Association vs Articles of Association in the UAE
Business owners often use the terms Memorandum of Association, or MOA, and Articles of Association, or AOA, as though they describe the same document. In UAE corporate law, they can serve different functions depending on the company type.
For a mainland Limited Liability Company, the principal constitutional document is generally the Memorandum of Association.
The MOA typically records fundamental matters such as:
Company name
Registered office
Business purpose
Share capital
Ownership percentages
Partner details
Management arrangements
Profit and loss allocation
Transfer restrictions
Company duration
Dissolution provisions
Joint-stock companies are also governed by Articles of Association, which deal more extensively with internal governance, shareholder meetings, Board matters, voting, capital procedures, and other corporate rules.
The distinction is important because an investor reviewing an LLC should not assume that a document called “Articles of Association” necessarily exists as a separate constitutional document.
The correct starting point is to identify:
The company’s legal form
The jurisdiction in which it is incorporated
The constitutional documents issued or approved by that authority
Any subsequent amendments
Article 14 of the UAE Commercial Companies Law requires the MOA and amendments to it to be drafted in Arabic and attested by the competent authority. Where an additional foreign-language version exists, the Arabic version prevails in the UAE.
Business owners should therefore review the actual registered constitutional document rather than relying on terminology used informally in emails, proposals, or internal records.
Key Clauses to Review in the Articles or Memorandum of Association
Constitutional documents should be reviewed as commercial governance documents, not simply as incorporation paperwork.
Important clauses include:
Share Capital and Ownership
Confirm:
Total share capital
Number or value of shares or ownership interests
Ownership percentages
Rights attached to different classes of shares, where applicable
Capital contribution obligations
Management Powers
The document should clarify:
Who may manage the company
Whether there is one manager or several
Whether managers may act individually or jointly
Which powers are unrestricted
Which actions require shareholder approval
This is particularly important for matters such as:
Opening or closing bank accounts
Borrowing
Granting security
Signing major contracts
Acquiring or disposing of assets
Appointing employees
Issuing powers of attorney
Voting and Shareholder Decisions
Review:
Voting thresholds
Matters requiring ordinary approval
Matters requiring a higher majority
Quorum requirements
Written resolution procedures
Reserved matters
Transfers of Ownership
The document should address:
Whether transfers are restricted
Pre-emption rights
Approval requirements
Valuation mechanisms
Transfer procedures
Profit Distribution
The constitutional documents should explain how profits and losses are allocated and how distributions are approved.
Death, Incapacity and Succession
Business owners should understand what happens to an ownership interest following the death or incapacity of a shareholder or partner.
The 2025 amendments to the Commercial Companies Law expressly allow LLC partners and Private Joint Stock Company shareholders to include mechanisms in their MOA or AOA dealing with the interests of a deceased partner or shareholder.
Exit Rights
Founders and investors should also consider whether the document adequately addresses future exits, transfers, acquisitions, or sales of the company.
A standard incorporation template may be sufficient at formation but may become inadequate once the company introduces investors, several active shareholders, external financing, or a more complex governance structure.
Drag-Along, Tag-Along and Succession Provisions
Federal Decree-Law No. 20 of 2025 introduced important flexibility for Limited Liability Companies and Private Joint Stock Companies.
Partners or shareholders may now include provisions in the MOA or AOA that regulate:
Drag-along rights
Tag-along rights
Treatment of ownership interests following the death of a partner or shareholder
Article 14 now permits provisions allowing one or more partners or shareholders, subject to agreed conditions, to require the remaining holders to sell their interests to a third-party purchaser.
It also permits provisions allowing another partner or shareholder to join an existing sale on the same terms agreed with the purchaser.
These mechanisms are particularly relevant where founders expect:
External investment
A strategic acquisition
A future company sale
Several minority shareholders
Family succession
Drag-Along Rights
A drag-along clause can allow a qualifying majority shareholder to require minority shareholders to participate in a sale of the company where the agreed conditions are satisfied.
This can prevent a minority holding from blocking a transaction involving the entire company.
Tag-Along Rights
A tag-along clause protects minority shareholders by allowing them to participate in a sale initiated by another shareholder on equivalent terms.
This can help ensure that minority investors are not left behind following a change of control.
Succession on Death
The amended law also permits provisions giving the remaining partners, shareholders, or the company itself a pre-emptive right to acquire the ownership interest of a deceased holder at an agreed price.
Where agreement cannot be reached, valuation may ultimately require determination through the competent court and expert assessment in accordance with the statutory framework.
These clauses should be drafted carefully. They affect ownership, valuation, control, inheritance, and exit rights and should remain consistent with any shareholders’ agreement, investment agreement, family succession arrangement, and applicable company law.
Management Powers and Reserved Matters
One of the most important functions of a company’s constitutional documents is to determine who has authority to bind the business.
Business owners should review whether managers or directors can act:
Individually
Jointly
Within specified financial limits
Only after shareholder approval for certain transactions
Management powers may cover matters such as:
Signing commercial contracts
Opening and operating bank accounts
Borrowing
Granting security
Purchasing or disposing of assets
Hiring senior employees
Appointing agents
Issuing powers of attorney
Entering leases
Commencing or settling litigation
A broadly drafted authority clause can allow a manager to make significant commitments without additional shareholder approval.
Conversely, an excessively restrictive clause can make normal operations inefficient because routine transactions may require repeated shareholder resolutions.
Shareholders should therefore distinguish between ordinary management decisions and reserved matters.
Reserved matters are significant decisions that require shareholder approval before management may proceed.
These may include:
Changing the company’s activities
Increasing or reducing capital
Borrowing above an agreed threshold
Selling substantial assets
Acquiring another company
Entering related-party transactions
Appointing or removing senior management
Issuing new shares or ownership interests
Changing dividend policy
Amending the constitutional documents
Selling or winding up the company
The voting threshold for each reserved matter should also be considered carefully.
If the threshold is too low, minority investors may have little protection. If it is too high, one shareholder may be able to block commercially necessary decisions.
The 2025 amendments to the UAE Commercial Companies Law expanded the flexibility available to LLCs and Private Joint Stock Companies to regulate relationships between partners and shareholders through their constitutional documents. This makes careful governance drafting increasingly important for companies with several owners or external investors.
Articles of Association vs Shareholders’ Agreement
A shareholders’ agreement and the company’s registered constitutional documents are related, but they are not the same instrument.
The MOA or AOA forms part of the company’s formal corporate framework and is registered or approved through the competent authority.
A shareholders’ agreement is generally a private contractual arrangement between some or all of the shareholders.
It may deal in greater detail with matters such as:
Founder responsibilities
Investor protections
Reserved matters
Funding obligations
Deadlock procedures
Non-compete arrangements
Confidentiality
Share transfers
Valuation
Drag-along and tag-along rights
Exit arrangements
Dispute resolution
A shareholders’ agreement can provide valuable commercial detail, but business owners should not assume that a private agreement automatically overrides the company’s registered constitutional documents or mandatory provisions of UAE law.
The documents should be reviewed together.
In particular, shareholders should avoid conflicting provisions concerning:
Voting thresholds
Manager or director powers
Share transfers
Pre-emption rights
Capital increases
Profit distributions
Exit rights
Succession
Where an important shareholder right is intended to affect the corporate structure itself, professional advice should be obtained on whether that provision should also be reflected in the registered MOA or AOA.
The 2025 amendments are particularly relevant because they expressly permit certain provisions, including drag-along, tag-along, and succession mechanisms, to be incorporated into the constitutional documents of LLCs and Private Joint Stock Companies.
A well-structured governance framework should therefore align:
The Commercial Companies Law
The registered MOA or AOA
Any shareholders’ agreement
Investment agreements
Board and shareholder resolutions
When Should the MOA or AOA Be Amended?
Constitutional documents should be reviewed whenever the company undergoes a material ownership, governance, or structural change.
An amendment may be required where the business changes:
Company name
Business activities
Share capital
Ownership percentages
Shareholders or partners
Manager or director arrangements
Signing authority
Registered office
Share classes
Voting rights
Transfer restrictions
Succession provisions
Drag-along or tag-along rights
The precise procedure depends on the legal form and competent authority.
For mainland companies, amendments may involve:
Preparing the proposed amendment
Obtaining the required shareholder or partner approval
Preparing the relevant resolution
Updating the constitutional document
Obtaining attestation or authentication where required
Filing the amendment with the competent licensing authority
Updating the commercial register and licence where applicable
Updating banks, tax records, Ultimate Beneficial Owner information, and other authorities where the change affects those records
Article 14 of the Commercial Companies Law requires amendments to the Memorandum of Association to comply with the applicable Arabic-language and attestation requirements.
Business owners should not rely only on an internal shareholder resolution where the change must also be formally registered.
For example, agreeing privately that a new shareholder owns part of the company does not itself complete the formal transfer where authority approval, amended constitutional documents, or commercial-register updates are required.
The registered corporate records should always reflect the company’s actual ownership and governance structure.
Share Transfers and Pre-Emption Rights
Share transfers are one of the areas where constitutional documents can have a direct commercial impact.
Business owners should review whether the MOA or AOA contains:
Restrictions on transfers
Pre-emption rights
Approval requirements
Valuation mechanisms
Notice periods
Rights of first refusal
Permitted transfers between related parties
Procedures for transferring shares following death or incapacity
Pre-emption rights can allow existing shareholders to acquire shares before they are transferred to a third party.
These rights can help existing owners maintain control over who becomes a shareholder, but they can also delay transactions if the procedure is unclear or overly restrictive.
The document should therefore explain:
When pre-emption rights apply
How the selling shareholder must notify the others
How the price is determined
How long existing shareholders have to respond
What happens if they decline
Whether the third-party sale must occur on the same terms
The transfer procedure should also remain consistent with the requirements of the competent licensing authority.
A private agreement to transfer shares is not sufficient where the transfer must also be approved, attested, or recorded in the company’s official register.
Investors should review transfer clauses before signing investment agreements or sale documents. A transaction that appears commercially agreed can still be delayed where the constitutional documents contain pre-emption rights or approval procedures that have not been followed.
Banking Authority and Signing Powers
Constitutional documents can also determine who has authority to act on behalf of the company in dealings with banks, government authorities, customers, suppliers, and other third parties.
The document may authorise one or more managers, directors, or authorised signatories to:
Open and close bank accounts
Sign cheques and payment instructions
Obtain financing
Sign loan agreements
Grant guarantees or security
Execute commercial contracts
Sign leases
Represent the company before government authorities
Appoint lawyers and advisers
Issue powers of attorney
These powers should be reviewed carefully.
A broadly drafted management clause may give one person extensive authority to bind the company.
A restrictive clause may require several signatures for routine banking or commercial matters.
Business owners should therefore ensure that the constitutional documents, bank mandates, shareholder resolutions, and powers of attorney remain consistent.
Particular care should be taken where:
A manager leaves the company
A shareholder dispute arises
Signing authority changes
A new investor joins
The company obtains financing
A power of attorney is revoked
Updating an internal resolution without updating the registered corporate records or bank mandate may create uncertainty about who is legally authorised to act.
Changes in authority should therefore be implemented across all relevant records.
Articles of Association for UAE Free Zone Companies
Free Zone companies require separate analysis because each Free Zone operates under its own regulations and corporate procedures.
Depending on the jurisdiction and legal form, a Free Zone company may have:
A Memorandum of Association
Articles of Association
A combined constitutional document
Standard regulations incorporated by reference
Bespoke constitutional documents approved by the authority
Business owners should therefore review the specific regulations of the Free Zone in which the company is incorporated.
Matters governed by the constitutional documents may include:
Share capital
Shareholder rights
Directors
Manager powers
Meetings
Voting
Transfers
Share classes
Dividends
Amendments
Dissolution
Some Free Zones provide standard template documents at incorporation, while others permit more extensive customisation depending on the company type.
Investors should not assume that a standard Free Zone template provides the same governance protections as a negotiated shareholders’ agreement or a bespoke constitutional document.
Several founders
External investors
Different share classes
Venture capital funding
Family ownership
Complex voting arrangements
Planned exit rights
Before changing ownership or governance, the company should confirm:
Whether the Free Zone permits the proposed amendment
What shareholder approval is required
Whether authority approval is needed
Whether the amendment must be notarised or attested
Whether the commercial licence or register must also be updated
The UAE Government confirms that Free Zone companies are subject to the rules and regulations of their respective Free Zone authorities.
Common MOA and AOA Mistakes
Many corporate problems arise because constitutional documents are treated as static incorporation paperwork and are not reviewed as the business evolves.
Common mistakes include:
Using a standard template without considering future governance needs
Failing to distinguish between the MOA and AOA
Leaving management powers too broad
Making routine decisions unnecessarily difficult through overly restrictive approval requirements
Failing to define reserved matters
Using unclear voting thresholds
Omitting effective share-transfer procedures
Failing to coordinate pre-emption rights with shareholders’ agreements
Ignoring succession following death or incapacity
Failing to include appropriate drag-along or tag-along mechanisms
Allowing private agreements to conflict with registered constitutional documents
Failing to update registered ownership after a transfer
Forgetting to update banks and authorised signatories after management changes
Assuming a Free Zone template provides the same protection as a negotiated governance document
Business owners should also avoid waiting for a dispute before reviewing governance provisions.
Constitutional documents should be reviewed when:
A new investor joins
A founder exits
The company raises capital
Ownership becomes more complex
A manager or director changes
The company obtains significant financing
Family succession becomes relevant
A business sale is being considered
A short governance review at the right time can prevent much more expensive disputes later.
Frequently Asked Questions
What are Articles of Association in the UAE?
Articles of Association are constitutional rules governing certain UAE companies, particularly joint-stock companies and some Free Zone entities. For a mainland LLC, the principal constitutional document is generally the Memorandum of Association.
Is the MOA the same as the AOA?
No. They are distinct concepts, although business owners sometimes use the terms interchangeably. The correct document depends on the company’s legal form and jurisdiction.
Can an LLC amend its Memorandum of Association?
Yes. Amendments may be made subject to the required shareholder approval, authority procedures, attestation requirements, and registration.
Can the MOA include drag-along and tag-along rights?
The 2025 amendments to the UAE Commercial Companies Law allow LLCs and Private Joint Stock Companies to include agreed drag-along and tag-along mechanisms in their constitutional documents.
What happens if a shareholder dies?
The treatment depends on the company type, constitutional documents, succession arrangements, and applicable law. The amended Commercial Companies Law also permits agreed mechanisms dealing with the interests of a deceased partner or shareholder.
Is a shareholders’ agreement enough without changing the MOA or AOA?
Not always. A shareholders’ agreement is a private contract. Where a governance or ownership right should form part of the company’s formal corporate structure, it may also need to be reflected in the registered constitutional documents.
Do Free Zone companies have Articles of Association?
It depends on the Free Zone and legal form. A Free Zone company may have an MOA, AOA, combined constitutional document, standard regulations, or another authority-approved instrument.
When should constitutional documents be reviewed?
They should be reviewed when ownership, management, capital, investor rights, voting arrangements, succession planning, financing, or exit strategy changes.
How NUR Advisors Group Can Help
Constitutional documents should reflect how the company actually operates and how the shareholders intend to govern the business.
NUR Advisors Group assists UAE businesses with:
Corporate amendments
Shareholder and ownership changes
Manager and authorised-signatory changes
Licence amendments
Ultimate Beneficial Owner updates
Coordination of MOA and AOA amendments
Corporate-document review
We help clients identify which corporate records require amendment and coordinate the administrative steps with the relevant licensing and government authorities.
Where bespoke legal drafting or legal interpretation is required, we coordinate with the client’s legal advisers or appropriately qualified counsel.
Keep Your Corporate Documents Aligned with Your Business
The company’s constitutional documents should evolve as ownership, management, investment, and governance arrangements change.
To discuss company amendments, shareholder changes, corporate documents, or business restructuring in the UAE, contact NUR Advisors Group at info@nur.ae.
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