What is Cabinet Resolution Number 85?

The modern corporate world is continuously evolving, and with it come new resolutions and guidelines that companies need to adhere to.

One such notable resolution is the Cabinet Resolution Number 85. In this article, we’ll break down the essence of this resolution.

Overview of the UBO Resolution

The UBO (Ultimate Beneficial Owner) resolution, otherwise known as Cabinet Resolution Number 58 of 2020, was instituted on the 28th of August of the corresponding year.

This resolution was brought into existence to provide a systematic method for reporting and registering beneficial interests.

It concerns the actual beneficial owners, board nominal members, directors, shadow directors, and even those holding powers of attorney.

Key Aspects to Understand

1. Applicability: This resolution extends to all UAE mainland and free zone companies. There are a few exceptions, including DIFC, ADGM, and government-owned entities.
2. Reporting Authority: Companies based on the mainland should report their statutory registries to the Department of Economic Development of their respective emirates. Those in the free zone should report to the relevant free zone authority.
3. Deadline: Entities had to update their statutory registry by October 27, 2020. Any modifications in the RBO or beneficial interests post this deadline should be reported within 15 days of the change.
4. RBOs and Nominal Members: An RBO refers to real beneficial owners possessing more than 25% of the company’s share capital. This individual must be a living person. A nominal member is anyone who acts based on the instructions of another individual. This category encompasses directors, shadow directors, and active power of attorney holders.
5. Statutory Registry: Analogous to financial accounts, a statutory registry is an essential record-keeping tool capturing significant components of a company’s structure and operation. Under the UBO resolution, the registry should incorporate:
   • Register of nominal members and directors.
   • Register of partners and shareholders.
   • Register of real beneficial owners.

Components of the Statutory Registry:

• Company Details: The registry begins with the company’s name, recent update date, company number, date of incorporation, and the registered office address.
• Nominal Members and Directors Register: Entries should include the update date, company details, board member’s name (as per passport or Emirates ID), birth date, nationality, occupation, and their position in the board.
• Partners and Shareholders Register: It is crucial to differentiate between individual and corporate shareholders. Details should encompass their name, service address, nationality, share class, share currency, and other relevant data. Also, if the corporate shareholder resides outside the UAE, a legal representative’s name and address in the UAE must be specified.
• Register of Beneficial Members: This captures details of individuals who own more than 25% of the company. Entries should comprise their name, service address, passport details, nationality, method and date of share acquisition, and if applicable, the date when they ceased being a beneficial owner.

Note: Always ensure you have an updated, master word version of the statutory registry. Treat it with utmost confidentiality, similar to financial records. Regularly update it and save different versions as per update dates.

The UBO resolution underscores the importance of transparency and accountability in the corporate landscape of the UAE. It’s pivotal for companies to not only understand but also to effectively implement the guidelines set by the resolution to remain compliant.