The Memorandum of Association (MoA) is one of the most important legal documents required when setting up a company in the UAE. Whether you are forming a Mainland company, a Free Zone entity, or a Limited Liability Company (LLC), the MoA defines your business structure, ownership, liabilities, and the operational framework of your company.

In simple terms, the MoA acts as the Constitution of your business — outlining how the company will be run, who owns it, and what activities it is allowed to carry out.

In this guide, we break down everything you need to know about the MoA in the UAE, including its purpose, essential components, drafting rules, legal requirements, and a standard format used across UAE jurisdictions.

What is a Memorandum of Association (MoA) in the UAE?

The Memorandum of Association is a legally binding document that outlines the formation, structure, ownership, and operating rules of a company. It must be notarised and signed by all shareholders.

The MoA is mandatory for:

• Mainland LLCs
   
• Civil companies
   
• Partnerships
   
• Branches requiring local service agents
   
• Some Free Zone companies (depending on the free zone)

Without a properly drafted and notarised MoA, a company cannot be legally registered, obtain a trade license, or start operations in the UAE.

Why is the MoA Important?

A well-structured MoA helps ensure:

✔️ Clear ownership distribution
✔️ Defined roles and responsibilities
✔️ Clarity on permitted business activities
✔️ Legal protection for all shareholders
✔️ Smooth operations without disputes
✔️ Compliance with UAE Commercial Companies Law (CCL)

In the UAE, especially for LLCs, the MoA legally establishes the relationship between shareholders and protects the rights of all parties involved.

Key Components of a UAE Memorandum of Association

While each MoA is customised, certain clauses are universally required under UAE law. Below are the most essential clauses:

1. Company Name & Legal Structure

Specifies:

• The official company name
   
• Legal entity type (e.g., LLC, Civil Company, Partnership)

Example: “ABC Trading LLC”

2. Business Activities

Defines all activities the company is permitted to carry out as per the Department of Economic Development (DED) license.

Important:
Your business can only operate within the activities listed in the MoA.

3. Office Address & Registered Location

Includes:

• Emirate of registration
   
• Registered office address
   
• Free zone or Mainland details

4. Share Capital & Ownership Structure

This is one of the most critical clauses.

Includes:

• Total share capital (e.g., AED 300,000 for an LLC)
   
• Share distribution among partners
   
• Voting rights
   
• Capital contribution requirements

5. Shareholder Details

Full details of each partner:

• Full name
   
• Nationality
   
• Address
   
• Passport/Emirates ID details
   
• Percentage of ownership

6. Profit & Loss Distribution

Defines how profits and losses will be shared among partners.

Note:
In LLCs, profit/loss distribution does not have to match ownership percentage.

7. Management Structure

Specifies:

• Appointed manager(s)
   
• Their powers
   
• Duration of managerial appointment
   
• Decision-making authority

8. Duration of the Company

Typically set as “perpetual duration” unless agreed otherwise.

9. Withdrawal, Termination & Liquidation Rules

Covers:

• What happens if a partner exits
   
• Liquidation process
   
• Winding-up rules under UAE law

10. Mandatory Compliance Clause

States that the company will comply with:

• UAE Commercial Companies Law
   
• DED regulations
   
• Any additional free zone or Mainland rules

MoA Requirements Across Mainland & Free Zones

While the general structure remains similar, here are the differences:

Mainland Companies

• MoA must be notarised at a Notary Public
   
• Required for LLCs, Civil Companies, Sole Establishments (LSA required)
   
• Local sponsor clause removed after 100% foreign ownership reforms (except strategic sectors)
   

Free Zone Companies

• Some free zones require MoA + Articles of Association (AoA)
   
• Digitally signed MoAs accepted in many free zones
   
• No need for notarisation in most cases

How to Draft an MoA in the UAE?

Step-by-Step Process

1. Choose the legal structure (LLC, Free Zone, Civil Company etc.)
    
2. Select business activities from DED or free zone list.
    
3. Define ownership and capital distribution.
    
4. Prepare MoA draft based on UAE Commercial Companies Law.
    
5. Submit for legal verification through a PRO or advisory firm.
    
6. Notarise the MoA (for Mainland) or digitally sign (for Free Zones).
    
7. Submit to the licensing authority to complete company setup.

Downloadable-Style MoA Format (Sample Template)

Below is a simplified MoA format commonly used for UAE LLCs:

Sample Memorandum of Association (MoA) – UAE LLC

1. Company Name
ABC Trading LLC

2. Legal Form
Limited Liability Company

3. Objectives & Activities
As per the DED-approved activity list (e.g., commercial trading, ecommerce, services, etc.)

4. Share Capital
AED 300,000 divided into 300 shares of AED 1,000 each.

5. Shareholders & Ownership

• Mr. John Doe – 100% (or per new foreign ownership rules)

6. Headquarters
Dubai, United Arab Emirates

7. Management Structure
Mr. John Doe appointed as Manager for a period of 5 years, with full authority.

8. Profit & Loss Sharing
As mutually agreed among shareholders.

9. Withdrawal & Liquidation
In accordance with UAE Federal Decree-Law No. 32 of 2021.

10. Compliance Clause
Company commits to meeting all UAE legal and licensing requirements.

MoA vs AoA in the UAE

Common Mistakes to Avoid When Drafting an MoA

❌ Incomplete activity list
❌ Wrong share distribution
❌ Missing profit/loss clauses
❌ Undefined manager authority
❌ Incorrect legal structure
❌ Not updating MoA after business expansion

A poorly drafted MoA can lead to disputes, licensing delays, or compliance issues.

How Proficient Accountants Can Help

At Proficient Accountants UAE, we specialise in:

✔️ Drafting legally compliant MoAs
✔️ Reviewing and updating existing MoAs
✔️ UAE Mainland & Free Zone company formation
✔️ License amendments & activity additions
✔️ Full UAE compliance (VAT, Corporate Tax, Accounting)

We ensure your MoA meets UAE laws, protects your rights, and supports long-term business growth.

+971-501372646 | +971-501372645
www.proficientuae.com
proficientdubai@gmail.com