The New Commercial Registry Law – 2021 - Analysis of the New Law Updates

His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the State (May Allah Bless and Protect Him) issued the federal law No. (37) decree, 2021, concerning the Commercial Registry.

The new law has been issued to meet the economic and commercial requirements that stem from the commercial and economic variations across the United Arab Emirates, especially those emerged due to the pandemic and current circumstances.

This document presents a legal analysis of the amendments and updates of the new law.

We summarize those amendments as the following:

1. The Article (1) of the new law lists out the terms and definitions. It introduces terms that are required to be defined in light of the new law. On the contrary to the old law, which defined “the competent authority” as the relevant government departments in the Emirates; the new law provides more details about those relevant governmental departments, where it includes free zone authorities and its role in issuing economic activities’ licenses whether in the commercial, industrial, tourist, media domains, including other licensed economic activities in the UAE. The law has also introduced and explained the “Economic Registry” term as stipulated in the same article, in addition to mentioning the “Commercial Registry” while removing the “Register” as used in the previous law.

2. The following terms have been added to and defined in Article (1):

a) State

b) Ministry

c) Minister

d) Economic Activity

e) Economic Registry

f) Commercial Registry

g) Economic Registry Number

h) Commercial Registry Number

3. The new law also includes in Article (2) the objective of the law. It states that the legislator here has limited the use of the commercial and economic registry in the UAE. Additionally, the article 2.1 provides a base for all the amendments and details, concerning merchants and licensed economic activities in the UAE.

4. The Article (3) of the law indicates in detail the scope of the law’s application, which is limited to nine points in the said article. It is noteworthy that the article left the field open in this regard as stated in Clause 3|9 of it, where it was allowed for the Cabinet of ministers by issuance a resolution to consider any other party subject to the application of the provisions of this law.

5. Article (4) of the law indicates data that must be registered in the commercial registry. It also stipulates that the data is registered under the executive regulations of the law. Also, the Article (4) in Clause (3) includes a statement of ownership of these data for the benefit of the Ministry of Economy, which gives it the status of official protection.

6. In regard to the data which must be registered in the commercial register, it is stated in Article No (5) that, the data mentioned in this article did not contain the registration numbers of trademarks and patents mentioned in Clause 10 of Article 5 of the old law. However, the article (5) of the new law indicated that the executive regulations of the law would contain several data that must be included in the form prepared for this purpose.

7. It was stated in Clause (3) of Article (5) of the new law that the competent authority shall register and link these data in the economic registry during the period specified in the executive regulations and by the means in accordance with the same.

8. The new law did not include in its text the necessity of submitting the companies’ articles of incorporation during the registration process, in contrast to what was found in the old law in Article (6).

9. Article (6), Clause (2) of the law adds the power to indicate any amendment to the changes that occur to the registration data of the competent authority according to the cases and mechanisms specified by the executive regulations and to notify the stakeholders of that, within the period specified in the executive regulations in this regard.

10. Article (7) of the new law introduces the renewal of the registration in the commercial registry.

11. The law also presents specific cases that were mentioned in the executive regulations, for those persons subject to the provisions of the law must indicate the commercial registration number in their business, dealings with others, and for displaying their registration certificate

12. Article (9) of the new law is differentiated in cases of cancellation of registration from the commercial register as follows:

Firstly, in the case of Sole proprietorships and similar ownership

a) in case that the person subject to the provisions of the law leaves the activity or leaves the country permanently without appointing a replacement manager to manage the commercial activity.

b)the death of the person who is subject to the provisions of the law without the request of his heirs to continue the economic activity, provided that the provisions of any other law are not violated, in addition to the fulfilment of the conditions for practicing this economic activity among them.

Secondly, in the case that the company has a separate Legal Personality

a)End of company liquidation

b)The demise of the legal personality of the company

Thirdly, any other cases determined by the executive regulations

*It is worth noting that the period specified by the competent authority for the person who is subject to the provisions of the law to carry out the write-off procedure of the registration was not specified by the law and left it based on the determination of the competent authority.

13. Article (10) of the law deals with the necessity of sending judicial sentences issued by the court or judicial committees to the competent authority within the period that will be determined according to the executive regulations of the law, for the purposes of marking in the commercial registry, these provisions are summarized as follows:

a) Provisions for declaring bankruptcy.

b) Rehabilitation provisions.

c) Judgments and decisions issued concerning guardianship.

d) Provisions for the separation of partners or dismissal of managers.

e) The rules of dissolution and liquidation of companies and nullity.

f) The provisions of the status of the commercial store.

g) Judgments and decisions issued to give permission to a minor.

h) Judgments imposing criminal penalties.

i) Judgments issued in the matter of judicial custody.

j) Any other provisions specified in the executive regulations of this law.

14. Article (11) of the law refers to a commercial mortgage where the mortgage on the commercial premises or any of its elements must be referred to in commercial registry according to the instructions contained in the executive regulations of this law.

15. The law added in Article (13) the right of the ministry to publish the information contained in the commercial and economic registers on the ministry’s website according to the executive regulations.

16. Article (16) of the law refers to the mechanism of requesting access and the persons who are entitled to view the data contained in the records through the executive regulations.

17. The law added the method of modifying data in case of errors related to the records and the periods required for the amendment through the executive regulations of the law.

18. The law has set a period of one year for the addressees and those concerned with the implementation of its provisions, provided that this period may be extended by virtue of a decision of the Council of Ministers..

19. The law gave the Cabinet of Ministries the right to issue a decision for the purposes of organizing and determining the process of paying fees for implementing what it came with the new law.