UNITED ARAB EMIRATES Law and Practice Contributed by: Francesco Bulleri, Beshoy Mounir, Sultan Bahriddini and Noora Al Doseri, ADG Legal
requiring enhanced approval thresholds (eg, unanimity or supermajority). The board of directors (or board of managers, in the case of LLCs) is responsible for the overall manage - ment and strategic direction of the company. It exer - cises all powers necessary to achieve the company’s objects, except for those expressly reserved to share - holders by law or constitutional documents. The board typically approves business plans, budgets, financing arrangements, material contracts and investments, and oversees risk, compliance and governance mat - ters. That said, certain significant transactions (such as disposals of substantial assets, long-term indebt - edness, or transactions outside the ordinary course of business) may either be restricted or require prior shareholder approval, depending on the legal form of the company and its constitutional documents. Executive management (such as the CEO or general manager) is responsible for the day-to-day operations of the company and implementation of the strategy set by the board. Their authority is usually broad in practice, particularly where the constitutional docu - ments do not expressly limit their powers, but remains subject to oversight by the board and any specific delegations or restrictions imposed by it. UAE law also provides for form-specific nuances. For example, in LLCs, managers are typically vested with full management powers unless restricted by the memorandum of association, while the general assembly retains authority over key corporate deci - sions. In joint stock companies, the board’s powers are more structured and subject to specific statutory limitations, with certain material actions requiring shareholder approval. In partnership-type structures (such as joint liability or limited partnership compa - nies), management is often vested in the partners themselves, with unanimous consent required for key decisions unless otherwise agreed. In addition to statutory rules, contractual arrange - ments play a significant role in practice. Shareholders’ agreements and constitutional documents commonly include detailed reserved matters, quorum require - ments and escalation mechanisms. It is also typical for decision-making authority to be delegated down -
wards (eg, from shareholders to the board, and from the board to the general manager), while preserving escalation rights for material or deadlocked matters. 2.3 Decision-Making Processes The decision-making process varies depending on the governing body and the company’s legal form, but is generally regulated by law and supplemented by the company’s constitutional documents. Shareholders (General Assembly) typically adopt reso - lutions based on voting rights attached to sharehold - ing, with voting power proportionate to the number or class of shares held. Decisions are taken at duly con - vened general assembly meetings, subject to quorum and majority requirements prescribed by law or the company’s constitutional documents. Ordinary mat - ters are usually approved by a simple majority, while fundamental decisions (such as amendments to con - stitutional documents, capital changes or dissolution) often require a higher threshold (eg, supermajority). In some cases, written resolutions may also be permit - ted, provided statutory requirements are met. The board of directors (or board of managers) gener - ally makes decisions through board meetings, where each director has one vote. Resolutions are typically passed by majority vote, subject to quorum require - ments. It is common for the chairman to have a cast - ing vote in the event of a tie, if provided for in the com - pany’s constitutional documents. Board decisions may also be taken by written resolution in lieu of a meeting, depending on the applicable legal framework and governance documents. Executive management (including the general manag - er or CEO) does not typically operate through formal voting processes. Instead, decisions are made within the scope of authority delegated to them (whether under law, the company’s constitutional documents, board or shareholder resolutions, or powers of attor - ney). In practice, management acts autonomously in day-to-day matters, while material or non-routine decisions are escalated to the board or shareholders in accordance with internal approval frameworks. Across all levels, the decision-making process is often further refined through contractual arrange -
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