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Disclosure Statement
I need a disclosure statement for a real estate transaction that clearly outlines any known defects or issues with the property, includes details of any renovations or repairs made in the last five years, and complies with UAE property disclosure regulations.
What is a Disclosure Statement?
A Disclosure Statement lays out all important facts and potential risks that companies must share with investors, customers, or regulatory bodies in the UAE. It's a crucial document that helps businesses meet their legal duty to be transparent, especially under UAE Federal Law No. 2 of 2015 and various DIFC regulations.
These statements cover key details like financial risks, conflicts of interest, fee structures, and material business relationships. In UAE financial markets, disclosure statements protect investors by ensuring they have accurate information before making decisions, while also shielding companies from future claims of information withholding.
When should you use a Disclosure Statement?
Your business needs a Disclosure Statement when raising capital, selling securities, or offering financial products in the UAE. This document becomes essential before major transactions, like mergers or acquisitions, or when launching new investment funds under DIFC regulations.
Use it to protect your company during significant business changes, when sharing sensitive information with potential investors, or whenever UAE regulatory bodies require detailed transparency. For example, real estate developers must provide disclosure statements before selling off-plan properties, and financial advisors need them when offering investment services to clients.
What are the different types of Disclosure Statement?
- Initial Public Offering (IPO) Disclosures: Required for companies listing on UAE exchanges, detailing financial health, risks, and business operations
- Real Estate Development Disclosures: Used in off-plan property sales, covering project details, payment plans, and completion timelines
- Investment Fund Disclosures: Mandated for DIFC-registered funds, outlining investment strategies, fees, and risk factors
- Corporate Transaction Disclosures: Used in mergers and acquisitions, revealing material information about assets, liabilities, and potential risks
- Financial Advisory Disclosures: Required by UAE financial advisors, detailing service fees, potential conflicts of interest, and investment risks
Who should typically use a Disclosure Statement?
- Public Companies: Must prepare detailed Disclosure Statements when listing shares or conducting major transactions on UAE exchanges
- Legal Counsel: Draft and review statements to ensure compliance with UAE Federal Laws and DIFC regulations
- Financial Advisors: Create disclosures for investment products and services offered to UAE clients
- Real Estate Developers: Issue statements for off-plan property sales under RERA guidelines
- Corporate Officers: Sign and verify disclosure content, taking legal responsibility for accuracy
- Regulatory Bodies: Review and enforce disclosure requirements, including SCA and DFSA
How do you write a Disclosure Statement?
- Business Information: Gather complete financial data, corporate structure details, and relevant business operations
- Risk Assessment: Document all material risks, market conditions, and potential conflicts of interest
- Regulatory Review: Check current UAE Federal Laws and specific DIFC requirements for your industry
- Document Collection: Compile supporting financial statements, licenses, and relevant corporate agreements
- Stakeholder Input: Get input from department heads about operational details and risk factors
- Format Selection: Use our platform's UAE-compliant templates to ensure all mandatory elements are included
- Internal Review: Have key executives verify accuracy of all disclosed information
What should be included in a Disclosure Statement?
- Company Details: Full legal name, trade license number, and registered UAE address
- Risk Factors: Clear breakdown of business, market, and operational risks specific to UAE context
- Financial Information: Audited statements, material debts, and significant financial commitments
- Management Structure: Key personnel details, board composition, and ownership information
- Legal Compliance: Statement of adherence to UAE Federal Laws and relevant regulatory frameworks
- Material Agreements: Summary of significant contracts and business relationships
- Verification Statement: Declaration of accuracy signed by authorized representatives
- Governing Law: Explicit reference to UAE jurisdiction and applicable regulations
What's the difference between a Disclosure Statement and a Non-Disclosure Agreement?
A Disclosure Statement differs significantly from a Non-Disclosure Agreement in both purpose and scope within UAE business practices. While both documents deal with information sharing, they serve opposite functions.
- Information Flow: Disclosure Statements actively share information with stakeholders or regulators, while NDAs restrict information sharing to protect confidentiality
- Legal Obligation: Disclosure Statements fulfill regulatory requirements and protect the disclosing party from liability; NDAs create contractual obligations to maintain secrecy
- Timing and Duration: Disclosure Statements typically relate to specific events or transactions, while NDAs usually establish ongoing confidentiality obligations
- Party Requirements: Disclosure Statements are often unilateral declarations required by UAE regulators, while NDAs are mutual agreements between business parties
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