Annual General Meeting of Shareholders critical under the new UAE Tax Procedures Law

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Published December 2017

The UAE Commercial Companies Law of 2015 (the ‘Commercial Companies Law’) mandates in Article 92 and Article 171, that companies in the UAE must have at least one General Assembly meeting annually within the four months that precede the expiry of the financial year.

While this is often overlooked by large numbers of small to medium sized companies, with the introduction of the new Federal Law No 7 of 2017 on Tax Procedures (the ‘Tax Procedures Law’) and Federal Law No 8 of 2017 on Value Added Tax (the ‘VAT Law’) in the UAE, this requirement may become a more pressing matter to ensure that the companies’ books and tax obligations are properly met during each financial year.

The General Assembly requires the shareholders of the company to attend. The annual general meeting is critical, as it addresses key corporate matters including the financial position of the company and the approval of the audited accounts. The company auditor’s report, balance sheet and profit and loss accounts are presented at this meeting and the shareholders are tasked with reviewing, approving and passing resolutions on the same. Shareholders also vote on the appointment of the auditors in this meeting, should the company not already have them.

Article 4 of the Tax Procedures Law, as part of the compliance procedures, requires businesses to maintain proper detailed financial records. This requirement already exists under the Commercial Companies’ Law where the law mandates in Article 26 that the company’s audited accounts are to be maintained for a period of five years.  Such records will have to be submitted to the Federal Tax Authority (FTA) every year in the case of businesses registered for Value Added Tax (‘VAT’). Companies that do not meet the required threshold and do not register for VAT, are still required to maintain and keep such audited accounts and financial records. This will assist the FTA in ensuring that all businesses are compliant with the VAT Law and its procedures. Furthermore, the Tax Procedures Law under Article 17 also stipulates that the FTA may conduct tax audits on businesses by providing them five business days’ notice to determine their VAT Law compliance. In instances where companies do not have their books/accounts in order, they may be subject to fines/penalties for failing to maintain these as required by law.

In light of this this enhanced scrutiny on financial records and audited accounts of companies through the introduction of the VAT Law earmarked to take effect on 1st January 2018, companies will need to ensure that they conduct their general meeting of the shareholders at least once annually to allow the shareholders to approve the audited accounts and financial records of the company and that the same are maintained in the manner provided for by law. This will also enable shareholders to prepare, anticipate and ensure that their companies are compliant with the Tax Procedures Law, the VAT Law and the Commercial Companies Law.  Failure to comply may attract penalties or impede their trade license renewal or continuation. 



Ziad Choueri, Partner (

Chinar Zaidi, Trainee Lawyer (



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