The companies law has been passed by the Federal National Council following a final debate changing the name and amending the law to cover only commercial enterprises.
UAE companies law passed by FNC after 10 years of debate
ABU DHABI // The FNC approved the companies law today, nearly a decade after it was first discussed.
After a final debate members changed the law's name and amended it to cover only commercial enterprises. The next step is enactment.
The law regulates how companies should be run and contains rules on corporate social responsibility and voting rights.
Dr Anwar Gargash, Minister of State for FNC Affairs, told members he recalled discussing the new law in 2004 when he worked at the chamber of commerce.
"We are talking about nine years," he said.
"Almost a decade. This law has probably had more coordination between the council and the Government than any other."
The FNC has spent five public sessions discussing the 383-article law with the Minister of Economy, Sultan Al Mansouri, and held 23 closed sessions, many with other government officials.
The law was first debated in February, but at the ministry's request was passed back to the committee for further discussion with the Government.
The FNC removed a clause allowing majority foreign ownership of companies and the law ensures close monitoring and accountability of publicly traded companies, and shareholders' rights. It sets clear responsibilities for boards of directors, managers and auditors to ensure they can be held to account.
The law also gives the Securities and Commodities Authority more power of scrutiny.
The legislation stalled after members and the Government disagreed on the name of the law, and which firms the regulations would cover after the first four marathon sessions in February.
After disagreements over four articles, the law was referred back to the finance committee to be reviewed with the ministry.
These included the legal definition of corporate social responsibility, voting rights, definitions of kinship and the types of companies covered by the law.
Today, the FNC and Mr Al Mansouri agreed that the law would cover only commercial companies and a later law would be drafted for professional firms and service companies.
The minister promised the council that, if all entities cooperated, a first draft could be ready by the end of the year.
Members insisted that the name of the law be changed to the Commercial Companies Law since it now referred only to commercial enterprises.
Despite Mr Al Mansouri's objections, a majority of members voted for the name change.
"You need to also take our opinion," the minister told the council. "We discussed this before.
"All around the world it's named 'companies law'."
He said talks had gone on for more than an hour and 20 members agreed to keep it as it was. He was unhappy that in just five minutes members changed their minds.
"Its the Government's opinion to keep the name as companies law."
The speaker, Mohammed Al Murr, reminded the minister that the council had the final say, and while it was the minister's right to give his opinion, he could not reject the council's decision.
Members were reluctant to continue discussing remaining clauses as they questioned if all local entities were involved.
Ahmed Al Shamsi (Ajman) said letters only from the Abu Dhabi and Dubai executive councils were sent to the FNC concerning the law, and other emirates did not seem to be involved.
Dr Gargash assured Mr Al Shamsi and other members that the law had been discussed for almost a decade by many entities.
"We had a law, there were a lot of amendments which led to a better law," he said.
He said a law such as this one would create chatter up to the last minute. Of all the laws they have seen, Dr Gargash said it was likely that this one created the biggest buzz.
The law will now be passed to the President, Sheikh Khalifa, for final approval.