Company Disclosure Letter Template for the United Arab Emirates

When you're involved in a corporate transaction in the United Arab Emirates, a Company Disclosure Letter serves as your essential risk allocation tool. This document works alongside your main transaction agreement to qualify the warranties and representations made by the selling company, ensuring both parties have clear visibility into potential issues while maintaining compliance with UAE commercial law requirements.

When do you need this document?

You'll require a Company Disclosure Letter whenever you're engaging in significant corporate transactions within the UAE. This includes mergers and acquisitions where one company is purchasing another, corporate restructurings that involve changes to ownership or control structures, and asset sales where substantial business operations are being transferred. The document is particularly crucial when dealing with listed companies that must comply with Securities and Commodities Authority disclosure requirements, or when foreign investors are acquiring UAE entities and need comprehensive due diligence documentation. Investment fund acquisitions and private equity transactions also typically require detailed disclosure letters to satisfy investor protection requirements and regulatory compliance obligations.

Key legal considerations

Your disclosure letter must carefully balance transparency with legal protection for both parties. The document should include comprehensive general disclosures covering matters of public record, regulatory filings, and industry-standard issues that don't require specific exceptions. Specific disclosures must detail particular exceptions to individual warranties, supported by relevant documentation and clear cross-references to the main agreement. You need to ensure that all disclosures are made in good faith and comply with anti-commercial fraud provisions under UAE Federal Law No. 19 of 2016. The letter should include proper definitions section that aligns with your main transaction agreement, clear identification of all parties including subsidiaries and parent companies, and appropriate liability limitations. Consider including materiality thresholds to prevent disclosure of minor issues that don't affect transaction value, and ensure that disclosed matters are sufficiently detailed to allow the buyer to make informed decisions about proceeding with the transaction.

Legal requirements in United Arab Emirates

Under UAE Federal Law No. 32 of 2021, your disclosure letter must comply with specific corporate governance and transparency requirements. Listed companies must ensure their disclosures align with Securities and Commodities Authority regulations, particularly regarding market-sensitive information and continuous disclosure obligations. The document must respect UAE Civil Code principles of good faith and fair dealing, ensuring that all material facts affecting the transaction are disclosed appropriately. You're required to include proper corporate authorization documentation, confirming that the disclosing company's board of directors and shareholders have approved the disclosure process. The letter must address any regulatory approvals required for the transaction, including foreign investment clearances where applicable. Ensure compliance with UAE commercial registration requirements and include references to relevant trade license information. The document should also consider UAE employment law implications if the transaction involves staff transfers, and address any Emiratisation requirements that may affect the target business operations.