How to Create a Shareholder Resolution in the UAE

A Shareholder Resolution is a formal document used to record and approve decisions made by the shareholders of a company. It provides written evidence that the shareholders have agreed to a particular corporate action and can be an important part of a company's corporate records.

In the UAE, the requirements can vary depending on the company's legal form, Articles of Association (AOA), mainland or free-zone jurisdiction, and the type of decision being approved. The UAE Commercial Companies Law is governed by Federal Decree-Law No. 32 of 2021 on Commercial Companies, while individual free zones may have their own requirements and templates. 

When Do You Need a Shareholder Resolution?

A shareholder resolution may be required when shareholders need to formally approve an important company decision.

Common examples include:

• Appointing or removing directors
• Changing the company's Articles of Association
• Changing the company's share capital
• Approving certain major transactions
• Approving the appointment or removal of an auditor
• Declaring dividends
• Approving certain mergers or restructuring
• Changing the company name
• Authorizing specific representatives to act on behalf of the company

The exact approval requirements depend on the company and the decision involved. For example, under the UAE Commercial Companies Law, General Assembly resolutions are generally passed by a majority of the shares represented at the meeting unless the AOA or applicable law requires a higher majority. 

Free zones can have their own procedures. For example, DMCC provides separate templates for subsidiary, individual shareholder and joint-venture resolutions, while DIFC provides specific shareholder resolution templates for corporate filings. 

What Should a UAE Shareholder Resolution Include?

A properly prepared resolution should clearly identify the company, shareholders and decision being approved.

Typically, include:

1. Company Information

Start with:

• Full legal company name
• Registration or licence number
• Registered office/address
• Jurisdiction or free zone
• Date of the resolution

2. Shareholder Details

List the shareholders participating in the resolution, including their names and, where relevant, their shareholding.

For a corporate shareholder, identify the company and the person authorized to sign on its behalf.

3. Purpose of the Resolution

Clearly explain why the resolution is being passed.

For example:

"The shareholders have considered the proposal to appoint [Name] as a Director of the Company."

Avoid vague descriptions. The resolution should make it clear exactly what the shareholders are approving.

4. Resolution

The main section should state the decision in clear and unambiguous language.

For example:

"IT IS RESOLVED THAT [Name] be and is hereby appointed as a Director of the Company with effect from [Date]."

If the resolution authorizes someone to complete filings or sign documents, include that authority explicitly.

5. Approval and Voting

Where applicable, record:

• Number of shares represented
• Voting entitlement
• Votes in favour
• Votes against
• Abstentions
• Confirmation that the required approval was obtained

The applicable voting threshold should be checked against the company's AOA and the relevant legislation.

6. Authority to Implement

It is useful to specify who is authorized to implement the decision.

For example:

"Any Director or authorized signatory of the Company is hereby authorized to take all actions and execute all documents necessary to give effect to this resolution."

7. Signatures

The resolution should contain appropriate signature blocks for the shareholders or their authorized representatives.

A corporate resolution template published by HSBC, for example, includes specific signature sections for shareholder representatives and directors. 

Shareholder Resolution vs. Board Resolution

These two documents are often confused.

A Shareholder Resolution records a decision requiring shareholder approval.

A Board Resolution records a decision made by the company's directors.

For example:

Shareholders may approve:

• Certain changes to the company's constitutional documents
• Certain changes involving share capital
• Other matters reserved for shareholder approval

The Board may approve:

• Opening a bank account
• Appointing an authorized employee
• Entering into certain contracts
• Operational and management decisions

The correct document depends on the company's legal structure, AOA and the nature of the proposed action.

Shareholder Resolution for a UAE Company: Basic Structure

A simple structure can look like this:

SHAREHOLDERS' RESOLUTION

[COMPANY NAME]

Date: [Date]

The undersigned, being the shareholders of [Company Name], having reviewed and considered the matters set out below, hereby resolve as follows:

RESOLUTION

IT IS RESOLVED THAT:

1. [Insert the first decision.]
2. [Insert any additional decision.]
3. [Insert authority granted to a director/authorized representative, if applicable.]

The shareholders authorize [Name/Position] to take all necessary actions and execute all documents required to implement the above resolutions.

SIGNATURES

Shareholder 1:
Name: __________________
Shareholding: ___________
Signature: ______________
Date: ___________________

Shareholder 2:
Name: __________________
Shareholding: ___________
Signature: ______________
Date: ___________________

Written Resolution or General Meeting?

Depending on the company and applicable rules, shareholder decisions may be documented through a meeting or a written/circular resolution.

A written resolution can be particularly convenient when shareholders are in different locations and the company's governing documents and applicable law permit the relevant decision to be taken this way.

However, do not assume that every shareholder decision can be handled using the same procedure. Check the company's AOA and the requirements of the relevant UAE mainland authority or free zone.

For example, ADGM provides different shareholder resolution templates depending on whether the shareholder is an individual, multiple individuals or a corporate shareholder. 

Mainland UAE vs. Free Zones

One of the most important points when preparing a UAE shareholder resolution is identifying where the company is registered.

A resolution for a mainland company may follow different procedures from one for a company registered in:

• DMCC
• DIFC
• ADGM
• JAFZA
• Dubai Silicon Oasis
• Abu Dhabi mainland
• Other UAE free zones

For example, DMCC publishes its own shareholder resolution templates, and DIFC provides specific resolution templates for various corporate filings. 

Therefore, a generic "UAE shareholder resolution" should be treated as a starting document rather than a guarantee that it satisfies every authority's filing requirements.

Tips for Preparing a Shareholder Resolution

Before signing the document:

1. Use the company's exact legal name as shown on its licence.
2. Confirm the company's registration number and registered address.
3. Check the current shareholder structure.
4. Check the company's AOA.
5. Clearly describe the decision being approved.
6. Confirm the required voting threshold.
7. Identify who is authorized to implement the resolution.
8. Check whether the relevant authority requires a particular format.
9. Check whether notarization, attestation or additional documents are required.
10. Keep the signed resolution with the company's corporate records.

For significant transactions or matters involving changes to ownership, capital, constitutional documents or regulatory filings, obtaining advice from a UAE-qualified corporate lawyer or the relevant authority is advisable.

Create a Shareholder Resolution Online

For routine business documentation, an online document generator can make the process much faster.

With DocMak, the workflow can be:

Choose Shareholder Resolution ? Enter Company Details ? Add Shareholders ? Select Resolution Type ? Enter Decision ? Review ? Download PDF

This can help businesses create a professionally formatted starting document without preparing the entire document from scratch.

Important: An online template or document generator does not replace legal advice. The final resolution should be checked against the company's governing documents and the requirements of the relevant UAE authority, particularly when the resolution is being submitted for an official corporate filing.

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