Many individuals have a problem in defining the difference between a public and a private joint stock company in the Emirates, and in fact there are many types of companies that can be established in the United Arab Emirates, and one of the most important types of these companies is a public and private joint stock company, but there are of course differences between them, so the The next investment in the United Arab Emirates should be well aware of the difference between a public and private shareholding company in the Emirates, and this is what we will show you in our article today.

Types of companies in the UAE

Before talking about the difference between a public and a private joint stock company in the UAE, we will first need to list the most important types of companies that are allowed to be incorporated in the UAE.

The law of companies incorporation in the United Arab Emirates provides for specific forms that must be taken by the establishment of commercial companies, and any type outside these types is considered void, and the following are the types of types of companies in the Emirates:

  • Solidarity companies.
  • Simple recommendation companies.
  • Public shareholding company.
  • Private joint stock company.
  • Limited liability companies.

What is the difference between a public and a private joint stock company in the UAE?

Both a public shareholding company and a private shareholding company are types of companies in the Emirates, which are stipulated in the UAE Companies Establishment Law and set the conditions and foundations for establishing each of them.

Below we will explain to you the difference between a public and a private joint stock company in the UAE, by clarifying what is meant by each type, what are its conditions, the maximum limit for its shareholders and their financial responsibilities.

public shareholding company

As we talk about the difference between a public and a private joint stock company in the UAE, we will first start with public joint stock companies, which are one of the most popular types of companies in the United Arab Emirates.

Which consists of at least 5 people, and governments, whether federal or local as well as any state-owned companies, are allowed to establish a public joint stock company.

The capital of a public shareholding company is divided into shares of equal values, and those shares of equal values are negotiable, and the partners in them are not entitled to ask except to the extent of his share or contribution to the company’s capital.

According to the companies law in which the United Arab Emirates operates, the capital of a public joint stock company cannot be less than 30 million UAE dirhams, and each partner in this type of company is responsible only for the health that he contributes to the company.

Also, the company’s founders must own no less than 30% of the shares, and the maximum of them is 70% of the total capital of the company. As for the structure of the members of the board of directors, it must not be less than 3 members, and the maximum number of them is 11 members.

Private Joint Stock Company

We are still talking about the difference between a public and a private joint stock company in the Emirates, after we got acquainted with what is meant by a public joint stock company, a private joint stock company is one of the other types of companies permitted in the Emirates.

In which the number of shareholders must not be less than 2, and the maximum number of shareholders is 200, and there is a special exception, by which a private joint stock company may be established for only one person.

Likewise, in a private joint stock company, the shareholders in the company or the owners of the capital in it are not responsible except within the limits of the total capital mentioned in the founding contract of that company, while other than that, they are not responsible for it.

The most important differences between a public and private shareholding company in the UAE

After we got to know the difference between a public and private joint stock company in the Emirates, you may be wondering about the most prominent differences between each of them, and the following are a number of brief points that clarify the most important differences between a public and private joint stock company in the Emirates:

  • The minimum number of shareholders to establish a public joint stock company is at least 5 people.
  • The minimum number of shareholders to establish a private joint stock company is at least 2.
  • A public shareholding company is a non-national company, meaning that its founders do not have any civil ties, and they are just founders with a stake.
  • A private joint stock company is a private company, that is, it is established between members of the same family or relatives.
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