LAW Assessment

 

 

 

Write a report will require students to determine the best business structure and then describe the steps to create a business in Abu Dhabi.
The report must include at least the following points: 
1. Decide the best - most simple and least expensive- legal form of company to create. 
2. Explain why the selected legal form is better than each of the other options that can exist.
3. Argue why forms of company creation would not be permissible legal entities for the establishment of such a business.
4. Describe legal and government procedures are needed with DED or other government agencies to open a business.
5. Suggest additional steps for the type of business. 

 

LAW ASSIGNMENT

Task 1:

The simplest form of a business organisation is to establish an advising company. A business advising company is generally a consulting company which would provide business advises to people. It is very easy to create business advises company which would give advises to construction company on improving their process of their construction businesses (Abdellatif & Othman, 2006, p.47). At first one has to think about the type of business advises that he or she is willing to give. Then one has to make the process of registration and form the various legal documents which would help him to move forward with his prevalent business idea of starting a business advising company (Easterbrook and Fischel, 1996).  There is various process of registration in different countries. Similarly, in order to establish a business in Abu Dhabi, one has to comply with the norms for establishing a business in Abu Dhabi.  In order to establish a consultancy company one has to follow the norms for establishing and getting registered with the list of companies in Abu Dhabi. There are certain acts and laws regarding formation and the compliance of companies in Abu Dhabi. In order to establish with the consulting firm one has to follow the rules for establishing the company.  It is very easy to set up such a company (Randeree, Mahal & Narwani, 2012). 

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Task 2:

The simplest form of company to create is the business advising company. As stated by Easterbrook and Fischel (1989, p.439), a business advising company is used to give business advises to different persons. Generally for a business advising company there are clients who come over the telephone or online. Such a company can be established in Abu Dhabi. Such type of company is easy to create because it requires less presence of staff members that would reduce the employment costs. Only registration and incorporation and submission of documents to DED are sufficient (Hansmann and Kraakman, 2000, p.439).  Moreover this type of company does not require the physical presence. Clients of construction companies can be contacted over the phone.  Formation of such company is very simple because there are no establishment costs and production costs. A business advising company would not be involved in the production of goods and services. So, there is no requirement for the promoters to find suppliers of raw materials. In case of other production entities and manufacturing entities there are promoters are involved in finding the suppliers of raw materials which is not required for this company.  In addition to this there are lesser risks of stock accumulation. Establishing a business advising company denotes business consulting services so there is no production of goods. As there is no production of goods there are no chances of stock accumulation. The cost of preserving stock and maintenance of warehouse is not present (Hesson, Al-Ameed & Samaka, 2007). Besides, in order to establish production companies one has to purchase large amounts of machines for production. As business advising company does not require goods to be produced purchase of fixed assets is not required.  In order to achieve customers other companies would have to incur huge amounts on the advertisements. In case of a business advertising company there is no question to incur cost on advertisements. Little advertisement expenses through internet is sufficient.

Task 3:

The forms of company creation would not be legally permissible for this type of business. The legal structure of business is followed by an individual emirate. From the year 1984 there are certain steps that have been undertaken in order to make sure that each and every company situated in Dubai followed the rule of establishing the companies according to the UAE or the Federal law no 8. The law has certain provisions. One of the provisions states that the total local equity capital of a company should not be lower than 52%. This is one of the major forms of the company creation. In case of a business advising company the total local equity capital is always less than 52%. Besides, the company form of legal entity in Dubai refers to the large organisations who are generally involved in production or sales. In Dubai the service providing companies are less as compared to the production and the other sectors. Establishing a business advising company denotes business consulting services so there is no production of goods. As there is no production of goods there are no chances of stock accumulation. The cost of preserving stock and maintenance of warehouse is not present. Besides, in order to establish production companies one has to purchase large amounts of machines for production. It is very easy to create business advises company which would give advises to construction company on improving their process of their construction businesses. At first one has to think about the type of business advises that he or she is willing to give. Then one has to make the process of registration and form the various legal documents which would help him to move forward with his prevalent business idea of starting a business advising company.  There is various process of registration in different countries. Similarly, in order to establish a business in Abu Dhabi, one has to comply with the norms for establishing a business in Abu Dhabi.  In order to establish a consultancy company one has to follow the norms for establishing and getting registered with the list of companies in Abu Dhabi. There are certain acts and laws regarding formation and the compliance of companies in Abu Dhabi. In order to establish with the consulting firm one has to follow the rules for establishing the company.

Task 4:

In order to establish a business in Abu Dhabi, one has to comply with the procedures for establishing a business advising company in Abu Dhabi.  The procedures are:
Getting registered- In order to establish a consultancy company one has to follow the norms for establishing and getting registered with the list of companies in Abu Dhabi (Saif Al Zaabi, 2011, p.158). There are certain acts and laws passed by DED regarding formation and the compliance of companies in Abu Dhabi. 
Obtaining licenses- Then In order to establish with the consulting firm one has to follow the rules for establishing the company laid down by DED for taking the licenses for attracting investors.  It needs to get the statutory licenses. (Randeree, Mahal & Narwani, 2012). 
Obtaining a trade name - The next step is to get a name of the particular advising business that is being established.  The trade name should not be copied from any other business entity working in Abu Dhabi (Saif Al Zaabi, 2011, p.158). There are various other agencies that operate. The business advising company that has been made should not be similar to any other company or agency. 
Getting certificate of operations- As per norms of DED after getting the business name one has to get the license for conducting the operations. As there is no production of goods there are no chances of stock accumulation. The cost of preserving stock and maintenance of warehouse is not present. Besides, in order to establish production companies one has to purchase large amounts of machines for production.  After the certificate of operation is achieved the proprietor has to set up branches in order to start the operations. At first one has to think about the place in which the business branch office is to be made.

Task 5:

After the business has been established there are certain additional steps that can be suggested. These steps are known as the post approval steps. The steps are:

Submission of the documents- After the business advising company has been given the permission to operate it needs to present all the documents regarding the trade type and the name to the Directorate of economic development (Grant, Golawala & McKechnie, 2007, p.507). During the establishment the approval letter or the consent to operate certificate is given which is very important.

Getting registered with Ejari- the Directorate of economic development has told that it is compulsory for each and every business entity to get the business name registered with Ejari. This is needed so that the various commercial contracts which the business advising company would enter into Construction Company are registered. It also includes the registration of property that has lease agreements. 

Meeting capital requirements- In case the business advising company wants to get itself as a limited liability company, then the reason for capital should be expressed and proved with causes and the amount should be deposited in a bank. On making such a deposit it would help to obtain an undertaking from that particular bank in which the amount has been deposited (Grant, Golawala & McKechnie, 2007, p.507). The deposited amount would be recognised as capital when the business advising company would be able to show evidences of registration.  

Getting recognised by courts and DED- After recognition of capital the registration must be approved by courts in Dubai and then the approval letter must be sent to the Directorate of economic development or DED.

Reference list

Easterbrook, F.H. and Fischel, D.R., 1996. The economic structure of corporate law. Harvard University Press.
Hansmann, H. and Kraakman, R., (2000). The end of history for corporate law. Geo. LJ, 89, p.439.
Easterbrook, F.H. and Fischel, D.R., (1989). The corporate contract. Columbia Law Review, 89(7), pp.1416-1448.
Stephens Balakrishnan, M. (2008). Dubai–a star in the east: A case study in strategic destination branding. Journal of Place management and Development, 1(1), 62-91.
Hesson, M., Al-Ameed, H., & Samaka, M. (2007). Business process reengineering in UAE public sector: a town planning case study. Business Process Management Journal, 13(3), 348-378.
Randeree, K., Mahal, A., & Narwani, A. (2012). A business continuity management maturity model for the UAE banking sector. Business Process Management Journal, 18(3), 472-492.
Abdellatif, M. A., & Othman, A. A. E. (2006). Improving the sustainability of low-income housing projects: The case of residential buildings in Musaffah commercial city in Abu Dhabi. Emirates Journal for Engineering Research, 11(2), 47-58.
Grant, J., Golawala, F. S., & McKechnie, D. S. (2007). The United Arab Emirates: the twenty?first century beckons. Thunderbird International Business Review, 49(4), 507-533.
Saif H. Al Zaabi, O. (2011). Potential for the application of emerging market Z-score in UAE Islamic banks. International journal of Islamic and Middle Eastern finance and management, 4(2), 158-173.

 

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