Exit routes at the level where the shares are held

In a layered group, the share a family member holds is usually a share in the holding company, not in a trading company. Exit questions are answered at that level, and the range of answers under UAE law widened in 2022.

Federal Decree-Law No. 37 of 2022 on Family Companies permits a registered family company to purchase not more than thirty per cent of its own shares, in two cases: a reduction of its capital, and the purchase or redemption of the shares of a partner who wishes to sell, or of a bankrupt or insolvent partner, where no other partner buys or redeems them. In all cases, partners holding a majority of the shares represented at the general assembly must agree, unless the memorandum of association stipulates another percentage, and shares held by the company carry no vote in general assembly deliberations for as long as it holds them (Article 11). This arrangement is one of the changes the 2022 decree-law introduced, so reasoning from the earlier position no longer reflects the law.

Article 12 permits share classes that separate entitlement to profits from the right to vote. A family company may issue class A shares, which entitle their holders to profits and to vote at the general assembly, and class B shares, which entitle their holders to profits without the right to vote. The memorandum of association may set the conditions governing conversion of class B shares to class A or the reverse, and may divide either class further according to the votes or the profits allocated to them. Beyond those two classes, the memorandum may stipulate other classes differing in value, voting power, profits, priority rights and other rights or privileges, provided that a partner's liability is in proportion to the rights assigned to each class, and the Minister issues a decision specifying the terms and conditions for the various classes. Ministerial decisions of 2023 on the purchase of own shares and on multiple share classes are published in Arabic on the ministry's companies legislation page.

Where a share reaches a non-family third party outside the approved route, the remaining partners have sixty days from that ownership to request redemption, each according to their share or more where another partner declines, at a value agreed with the third party or, on disagreement, the value determined by the committee. If no partner requests redemption, the share is offered to the company, and if it is not redeemed within thirty days the third party is empowered to hold it. Such ownership does not by itself end the company's capacity as a family company, provided family members' ownership does not fall below the majority of the shares (Article 8).

Article 9 sets out how shares are valued and when a majority holder must notify the rest of a wish to buy them. The article does not oblige that holder to complete a purchase, and the other partners cannot compel one either: what follows is an option for them to sell, not a binding offer. Shares are valued by the committee in accordance with the mechanism stipulated in the memorandum or the charter, and where neither contains such a stipulation, by one or more financial and technical experts selected by the committee at the purchaser's expense. A partner who comes to hold not less than ninety per cent of the company's shares must notify the partners from outside the family of a wish to purchase their shares; the threshold is not less than ninety-five per cent of the voting shares for notice to the remaining family partners. Those partners may sell at the price agreed or, on disagreement, at the price the committee determines.

Insolvency and status set the boundaries. Where a partner becomes bankrupt or insolvent, the insolvency and bankruptcy laws in force are followed, and any other partner has a priority right to purchase that partner's share at the price and within the period determined by the court (Article 10). Family company capacity ceases if non-family persons own the majority of the voting shares, in which case the company is deregistered and continues in the form it held before. Capacity does not cease on the death, interdiction, bankruptcy or insolvency of a partner unless the memorandum so provides, and partners holding at least three quarters of the capital may request deregistration (Article 23).

Sources, retrieved 11 August 2026: Federal Decree-Law No. 37 of 2022 on Family Companies, English text published by the Ministry of Economy and Tourism, https://www.moet.gov.ae/documents/20121/0/family+company+english+version+examined+and+correcetd.pdf/5639a956-fe15-6de2-a04e-c8f8ecb6c2bf?t=1674115232919 ; the Arabic text of the same decree-law, which governs and states the Article 9 thresholds as ninety and ninety-five per cent, and the ministerial decisions named above, at https://www.moet.gov.ae/ar/companies-legislations .

This content is written with law firms as educational material only. It is not advice, no structure described here has been verified or endorsed by the programme, and a family considering any of it should take its own legal, tax and accounting advice on its own facts.