Business succession planning in the UAE

Identify who owns each share class, who manages the business and who can sign for bank accounts, contracts and regulatory matters. Include holding companies, shareholder loans and guarantees. A founder may perform all those roles today, but no single succession document necessarily transfers them together. Map the dependencies that would arise if that person could no longer act.

Review current registers and agreements against what the owners believe they hold. Informal promises to a family member or partner may not reflect legal ownership. Resolve discrepancies before drafting a will or succession arrangement. The federal Commercial Companies Law and the relevant authority’s rules provide part of the framework; company-specific documents determine additional rights and procedures.

Read the articles and shareholder agreement for transmission, transfer restrictions, reserved matters and decision thresholds. Ask whether surviving shareholders, heirs and the company have a clear mechanism to establish the new ownership position. Do not assume that a generic buyout clause will apply to the actual event or that all parties can fund it.

A planned buyout needs a credible valuation and payment method. Consider who values the interest, how disagreements are handled, what happens if funding is insufficient and whether payment can be staged lawfully. Coordinate any insurance or other financing with appropriate financial advice. The arrangement should preserve business continuity while protecting the estate’s legitimate entitlement.

A family beneficiary may want income rather than a management role. Another relative may work in the business but own no shares. Discuss these differences directly and avoid conflating participation, control and economic benefit. Any proposed appointments should fit the company’s rules and licensing requirements, with suitable alternatives if the intended manager cannot act.

Create a practical continuity file: authorised contacts, key contracts, renewal dates, essential suppliers and the location of financial records. Access to passwords should be lawful and secure, with institution-specific arrangements. A private file is useful support, but it does not itself grant banking or regulatory authority. Test the plan by asking who can make each urgent decision.

The personal will should identify the actual shareholdings and related rights, taking account of company arrangements and applicable inheritance rules. Where a foundation or holding structure is proposed, verify the transfer and governance requirements before assuming it changes succession. International ownership may require advice in the incorporation jurisdiction and the owner’s other relevant countries.

Review after investment rounds, new share classes, acquisitions, changes in management or significant borrowing. A plan based on the original sole-owner company may not work once investors or lenders have rights. Keep the asset inventory and corporate file current, and record which changes require formal amendments rather than merely an updated supporting schedule.