The UAE family business law, explained for family partners

Two laws, one company

A UAE family company lives under two laws at once. The Commercial Companies Law of 2021 sets the rules every company follows: how often the board meets, when the general assembly must be held, how minutes are signed. The family business law, Federal Decree-Law 37 of 2022, sits on top and answers the questions families actually argue about: who may own shares, what happens when a partner wants out, and how a dispute is settled without a court.

What makes a company a family company

The law applies to a company in which most of the shares are held by members of one family and which has been entered in the family companies register. Registration is a choice, and it is the step that brings the rest of the law’s tools into reach. Companies in the financial free zones, ADGM and DIFC, follow their own company rules.

The family charter

The law lets the family adopt a charter and gives it force once it is referred to in the company’s articles. A charter can set the family’s values and purpose, the rules for employing family members, how profits are distributed, how shares pass between generations and how disagreements are resolved. Without that reference in the articles, a charter is a family agreement; with it, the charter binds the partners.

Shares stay in the family, if the family wants

A partner who wishes to sell must first offer the shares to the other family partners, and the law allows the company itself to buy back a partner’s shares within a set period. The law also allows different classes of shares, so voting rights and profit rights can be separated for a branch of the family that wants income but not a seat at the table.

Settling disputes in the family

The law provides for a family business dispute resolution council so that a quarrel between partners can be settled before it reaches a court and the newspapers. A charter can also name its own route: mediation first, then arbitration, with the family council in between.

The ordinary rules still apply

Under the Commercial Companies Law the board of a joint-stock company meets at least four times a year, the general assembly is held within four months of the year end, resolutions may pass by circulation, and minutes are signed by the members present and the secretary. A family company that is a limited liability company speaks of partners, a general assembly of partners and a board of managers, and the same discipline applies.

In Govuno

A UAE organisation gets the UAE’s rules: board meetings counted against the minimum, the assembly deadline on the chair’s dashboard, written resolutions with a deadline, and signed minutes that lock. A family holding uses the law’s own words for its bodies. The family charter is kept in versions, adopted by a share-weighted vote of the assembly, and confirmed by every family member, with the current version always the one in force.