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29 May, Wednesday
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Good news for family businesses! New law to boost family-run companies

Without a doubt, the UAE is the entrepreneurial family’s playground. With thousands of family businesses operating in the emirates, they form the backbone of the business community.
And now, a new law further strengthens the operations of Abu Dhabi based family businesses.
President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued a new family business ownership governance law that empowers family business and streamlines the transition to successive generations.

Everything the new law delivers

To evolve the legislative ecosystem for such business, the law aims to boost the sector’s contribution to the larger economy while also being sustainable.
The new family business ownership governance law empowers owners of family businesses to:

  • Prevent selling of shares or dividends to individuals or companies outside the family
  • Require prior approval from family partners before a shareholder sells their respective equity stake to a non-family member
  • Issue family-owned shares with weighted voting rights
  • Prevent the pledging of family-owned businesses as encumbered assets to avoid expropriation

However, the law does not apply to family-owned businesses, where non-family members own more than 40 per cent of shares.

The resident ursine of BuzZzing .com, Mahesh always be found jumping from one obsession to the other and sometimes even writes about them. While not juggling hobbies, writing, and existential crises, he tries to get people to call him Nakashima.

nakashima@buzzzing.ae

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