Family forums and company boards: what each body is for

A family that owns a business has two sets of decision-making bodies available to it, and they answer to different sources of authority.

Company organs take their authority from company law and from the company's constitutional document. UAE Federal Decree-Law No. 37 of 2022 concerning Family Businesses provides in Article 28 that it comes into force three months after the day following the date of its publication in the Official Gazette. Article 26(2) states that a family business is not a new form of commercial company added to those in the Commercial Companies Law, and Article 26(1) subjects family businesses to that law and other applicable legislation in everything the Decree-Law does not specifically provide for. Article 3(2) excludes the joint stock company and the partnership company from its scope.

Under Article 14(1), a family business is managed by a director appointed in the articles of association. Where the articles contain no provision for this, a director may be appointed by a subsequent decision of partners who own at least 51 per cent of the shares represented at the general assembly meeting, unless the articles stipulate another percentage. A director may be one or more persons, from the partners or from others, and may be a legal person, provided at least one director is a natural person where there is more than one.

Article 14(2) allows the articles of association of a family business with limited liability to stipulate the formation of a board of directors, with its members named in the articles. The same provision leaves to the articles the rules, controls and conditions governing the board's formation, its powers, membership terms and fees, dismissal and replacement, the mechanism for making decisions, the board's committees and their powers, and the criteria for membership of the board and those committees.

Article 14(3) provides that a board, where one exists, has a chairman, and that the director in that case follows the chairman in the chairman's capacity as representative of the board, unless the articles stipulate otherwise. Board membership and the management of the business may be combined; the chairmanship and the management may not. Article 14(4) requires a director or board member to be of legal age and full capacity, of good conduct, and to possess the knowledge and experience that could reasonably be expected from another person in the same position.

Family bodies take their authority from the family's own arrangements. Article 18(1) provides that family affairs may be regulated, in relation to their relationship with the family business, through the establishment and organisation of the work of councils and committees, such as the family association, the family council and the family office, each in the field of tasks assigned to it. The wording is permissive, and no fixed set of bodies is prescribed.

Article 18(1) also states what those bodies are concerned with. The list covers managing family affairs and regularising their relationship with the business, the education and training of family members and their work in the business and its subsidiaries, their own entrepreneurship initiatives, separating the ownership and governance of family assets from those of the business, supervising family investments, organising charitable works and community contribution initiatives, contributing to the control of conflicts of interest and to reconciliation, and considering disputes between family members and between them and partners. Article 18(2) requires the Ministry to set rules and regulations for the governance of the family business and the family.

The practical distinction follows from the two sources of authority. A family council deliberates on family affairs and on the family's relationship with the business. The Decree-Law assigns management of the business itself to the director and, where the articles so provide, to a board. Article 6(3) points the same way on the document side: where the articles of association and the charter conflict, the articles apply, and the conflicting provision is repealed from the charter.

Governance guidance published in Dubai in April 2024 identifies family councils, the board of directors and board committees as the main governance bodies of a family business, and addresses governing documents and requirements for board committees and meetings.

A body named in a document but never convened issues no decisions and leaves no record of its deliberations.

Sources, all retrieved 11 August 2026:

• Federal Decree by Law No. 37 of 2022 Concerning the Family Businesses, full text, UAE Legislation portal: https://uaelegislation.gov.ae/en/legislations/1608
• Dubai Media Office, launch of corporate governance guidelines for family businesses, 3 April 2024: https://mediaoffice.ae/en/news/2024/april/03-04/dubai-centre-for-family-businesses

This content is educational and is written with law firms. It describes mechanisms and does not recommend any of them. The family should take its own legal advice on its own facts. Nothing here states or implies that the programme has verified or endorsed any structure, document or body.