Company Limited by Shares (CLS)
Company Limited by Shares (CLS) means that the liability of the shareholders to creditors of the company is limited to the capital originally invested i.e. the nominal value of the shares and any premium paid in return for the issue of the shares by the company. The name of a limited company shall end with the word “Limited” or “Incorporated” or the abbreviation “Ltd” or “Inc”.
This type of company shall at all times have at least one shareholder and one director. The company may issue bonus shares, partly paid shares or nil paid shares. Shares may be held by more than one person as joint owners. The name of each such joint owner shall be entered in the register of members as holders of the relevant shares. A company shall state in its articles the circumstances in which share certificates shall be issued. Such share certificates shall be signed by at least one Director of the company.
Features of a Company Limited by Shares (CLS)
The essential feature of a CLS is that the liability of shareholders is limited to the amount of capital that they have committed or have agreed to commit. A CLS must at all times have at least one shareholder and one director. A CLS may issue bonus shares, partly paid shares or nil paid shares. More than one person can hold shares for succession purposes as joint owners.
Additional optional features:
- Unlimited capacity
- Restricted purpose
- An unlimited or limited duration
- Segregated Portfolios in which assets are insulated from liability
Possible uses of a Company Limited by Shares (CLS)
RAK ICC companies limited by shares are flexible and administratively simple corporate vehicles that can be used for a number of purposes such as:
- International Business Company: Flexible corporate vehicle to facilitate worldwide investments and global trade.
- Holding company: Flexible corporate vehicle to hold shares in subsidiary companies.
- Special Purpose Vehicle: Company to hold specific assets such as real estate. The underlying asset may be indirectly sold as a whole or in parts by selling the shares in the RAK ICC company typically, without needing to involve local notaries or land registries.
- Joint Venture Company: Rights of the shareholders in the joint venture company may be set out in the Memorandum and Articles and/or in a separate shareholders’ agreement.
- Project company: Vehicle to own and operate a specific project while reducing the exposure of shareholders to liability.
- Family office: Private vehicle, with limited disclosure obligations.
- Segregated portfolio: Company Use of segregated portfolios for different assets can insulate each. asset from liability and permit the separation of ownership from management and control.