The New Commercial Companies Law (Federal Law No. 2/2015 concerning Commercial Companies) (“New CCL”) came into effect on 1 July 2015.

The New CCL introduces a number of new provisions some of which will require companies (including limited liability (“LLC”) and private joint stock companies (“PJSC”) to make amendments to their Memoranda and Articles of Association (“MoA”).  Article 374(1) of the New CCL prescribes that all companies subject to the provision of the New CCL must comply with its provisions within one year from the effective date of the law (being 1 July 2015).

Article 374(2) stipulates the rather draconian provision that failing to comply with Article 374(1) will result in the company being deemed as dissolved in accordance with the provisions of the New CCL unless the grace period is extended by a cabinet resolution.

In addition to the severe consequences provided in Article 374(2), the New CCL also provides pecuniary penalties for violation of its provision, which is a fine between AED 10,000 and AED 100,000.