AN OVERVIEW ON THE PROCESS OF CHANGING THE GENERAL MANAGER OF A COMPANY IN THE UAE

This article has been researched and written by the Business Development Team at Creation Business Consultants. AI has not been used in generating this article.

Introducing a General Manager to your company is a significant milestone in any organisation’s journey. Whether you are undergoing a strategic change, succession planning, or simply seeking fresh leadership, the process involves several crucial steps and legal considerations. According to the Federal Decree-Law No. 32 of 2021 on Commercial Companies, all UAE firms, both onshore and freezones, need to employ a General Manager (GM). The General Manager will be in charge of monitoring the day-to-day operations of the company and ensuring that it complies with the UAE rules and regulations.

The qualifications for a General Manager in a UAE firm may differ depending on the company’s legal structure and the industry in which it operates. Companies in some areas, for example, may require a General Manager with specific skills or expertise.

A General Manager who understands the legal and regulatory framework in which the organisation operates and who can effectively manage the business operations, workers, and money is essential for a UAE business. The General Manager is critical to the company’s development and maintaining compliance with the UAE rules and regulations.

WHAT ARE THE STEPS FOR CHANGING THE GENERAL MANAGER IN THE UAE?

Changing the General Manager of a company in the UAE typically necessitates:

1.EXAMINING THE LEGAL STRUCTURE AND GOVERNING PAPERS OF THE ORGANISATION

This includes examining the legal structure and governing documents of the firm, such as the Articles of Association (AOA) and Memorandum of Association (MOA). These agreements detail the process for changing the General Manager as well as any specific needs that must be completed, such as a Power of Attorney (POA) for the General Manager, which can be a separate document or, in some situations, contained inside the MOA.

2. NOTIFY THE APPROPRIATE AUTHORITIES

This includes notifying the appropriate authorities about the change in General Manager. The Department of Economic Development (DED) in the emirate where the firm is registered, as well as any other government agencies or regulatory bodies that regulate the industry or sector in which the company works, may fall under this category.

3. UPDATE THE COMPANY RECORDS

This includes the new General Manager’s information in the company’s records. This could entail revising the company’s trade license, MOA, and any other legal documents (such as a new POA).

4. OBTAIN ALL REQUIRED APPROVALS

Depending on the legal form of the firm and the specific procedures set by the government, you may need to secure various approvals before the new General Manager may take over. You may, for example, need clearance from the company’s shareholders or Board of Directors.

WHAT ARE THE DOCUMENTS REQUIRED & WHICH DOCUMENTS REQUIRE UPDATE TO REFLECT THE NEW GENERAL MANAGER?

To reflect the change in General Manager, the following documents will need to be updated:

1. The Memorandum Of Association (MOA) is a legal document that describes the structure and governance of the organisation. The MOA will need to be modified to reflect the change in General Manager, as well as a new Power of Attorney (POA) for the new General Manager.
2. The company’s board of directors may need to issue a resolution approving the new General Manager’s appointment and authorising the move.
3. If the new General Manager is not a shareholder of the firm, they may be required to present a POA document permitting them to act on the company’s behalf.
4. Corporate bank account details.
5. The incoming General Manager must produce clear, legible copies of the following documents:

• •  A photocopy of the General Manager’s passport.
  • A copy of the General Manager’s current UAE visa.
  • A photocopy of the General Manager’s Emirates ID.

WHAT ARE THE FINES & PENALTIES FOR NOT UPDATING THE GENERAL MANAGER DETAILS?

• Failure to update the General Manager of a company in the UAE may result in fines and penalties imposed by the relevant authorities.
• Failure to notify the Department of Economic Development (DED) of the change in the General Manager within the timeframe specified may result in fines ranging from AED 1,000 to AED 5,000.
• Failure to update the company’s legal documentation, such as the Memorandum of Association (MOA) and Articles of Association (AOA), to reflect the change in the General Manager may result in fines of AED 2,000 to AED 10,000.
• Failure to get a new trade license reflecting the change in the General Manager may result in fines of AED 5,000 to AED 20,000.
• Failure to keep labour contracts and visas up to date and result in fines ranging from AED 2,000 to AED 10,000 per employee.

TAKEAWAY

Creation Business Consultants will keep you informed about the latest regulations which could impact your business. Our team of experts will leverage our experience to help understand the latest changes while simultaneously providing you with all the details needed to run your company in Dubai and the UAE. Speak to one of our Corporate Structuring consultants today for your free 30-minute consultation, email [email protected] or call +971 4 878 6240 Saudi Arabia +966 54 511 2494

Scott Cairns,
Managing Director