The United Arab Emirates.. The President of the State issues a decree on the Law on Cooperatives

His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the State, may God protect him, issued Federal Decree Law No. 6 of 2022 on Cooperatives, and the Decree Law, which consists of 32 articles, stipulated that the provisions of this Decree Law shall apply on cooperatives that are established or existing. At the time of issue, the cooperative may open branches in the country after approval by the competent authority.

The law decree, published in the last edition of Lovtidende, defined the goals and principles of cooperatives, including strengthening the role of cooperatives in achieving sustainable development, empowering members of society and its various groups to establish cooperatives and achieving the principles of the cooperative. represented in the members’ equal number of votes and not linked to the number of shares.

It also specified 7 obligations for cooperatives, including: the cooperative allocates a percentage of its annual profits, or the accumulated profits, to social responsibility, does not interfere in politics or incite hatred and sectarian, racial, religious or ethnic conflicts or issues. affect the security of the state or the political system.

  • The possibility to transform into a company and list its shares on the financial markets
  • Fines of up to one million dirhams as punishment for violating the provisions of the law

The decree established that cooperatives are divided into categories, and cooperatives take one of the following types: consumer cooperatives, production cooperatives, employee and professional cooperatives, community cooperatives, service cooperatives, including financial, health, education and housing cooperatives, digital cooperatives, and platform cooperatives .

Cooperatives are subject to the cooperatives’ corporate governance and disciplinary system, and founders are responsible for any damage that may affect the cooperative or third parties as a result of violating the specific rules and procedures of incorporation.


A cooperative must be established by a number of at least (10) ten persons and an exception may be made by a decision of the head of the competent authority if there is an acceptable reason and the cooperative is required to fulfill the specified conditions and requirements.

Co-operative societies must keep a register called the “co-operative register”, in which it shows all data about the members, their qualities, the number of shares they own and any action or restriction on these shares.


Cooperatives are subject to the following provisions: Each member of the non-core cooperative has only one vote, regardless of how many shares he or she owns, and the basic cooperative’s articles of association may give the largest shareholders special privileges, in that more voting rights and separate preferential rights with conditions and controls, including: The size of investments A member of the cooperative, provided that it is not less than the percentages specified in the rules of procedure in this regard, and the percentage of representation of senior shareholders who have more voting rights does not exceed one third of the members of the board of directors, and the total vote of senior shareholders does not exceed (35%) of the total votes of the shareholders.

Not to interfere in politics or incite hatred, sectarian, racial, religious or ethnic conflicts or matters affecting the security of the State or its system of government

All members have one vote when voting on the special resolution, and the cooperative may issue financial instruments and financing shares, provided that the holder of financial tools and financial shares is a strategic partner, and the holder of financial tools and financial shares is not considered. member of the cooperative.

The cooperative must have a board of directors to handle its affairs, and it must consist of a number of members of at least three and at most nine, provided that the number of its members is odd and the term of membership does not exceed three. Gregorian years, starting from the date of election or appointment.

Dissolution of the board of directors

The competent authority can alone or on the basis of a report from the auditor or the cooperative supervisory authorities or at the request of at least (10%) of the cooperative members, dissolve the board of the cooperative and appoint a new board for a period of no more than three years or temporarily for the operation for a period of no more than six months, during which the general meeting is convened to elect a new board to replace it, if it becomes clear that the board is unable to carry out its tasks, or was unable to achieve the cooperative’s objectives, or in the event of financial irregularities or administrative damage to the cooperative or its members.

The Boards of Directors appointed by the local authority prior to the issuance of this Legislative Decree shall continue to manage the affairs of the Association for a period of (3) three years from the date of its issuance.

The decree stipulated that the audited accounts must be published on the Tawuniya website within (15) fifteen days from the date of the General Assembly’s approval of the budget, and the annual net profit must be distributed as follows:

  • Returns on transactions are allocated to each member in proportion to the extent of his contacts with cooperatives.
  • Share return for all members at the rate approved by the general meeting.
  • The remuneration for the board members as determined by the general meeting, provided that it does not exceed (10%) of the annual net profit and (10%) of the cooperative’s net profit, is deducted each year the general meeting can stop this deduction when the legal reserve reaches (50%) From the cooperative’s capital, and the legal reserve may not be distributed as profit to the shareholders, or return on financing shares. or financial instruments.

Collaborative solution and liquidation

It also stipulates that the cooperative must be dissolved and liquidated in one of the following cases:

  • Delivery of final judgment by the competent court.
  • Issuance of a decision by the competent authority if the cooperative does not achieve its goals, or goes beyond the limits of the cooperative’s goals. Those concerned may appeal the liquidation decision before the competent court within fifteen days from the date of notification.

supervision and control

The financial year’s accounts are audited by the auditor and submitted to the general meeting, accompanied by the audit report, no later than four months after the end of each financial year for the cooperative.. Holding of the general meeting.

The Ministry of Economy and the competent authority are responsible for supervising and controlling the cooperative and its activities, its members and shareholders in accordance with the provisions of this Decree Law and its rules of procedure.


  • A fine of not less than 200,000 dirhams and not more than one million dirhams shall be imposed on anyone who makes false or misleading statements in articles of association, articles of association, share subscription prospectuses, annual statements and reports, annual accounts, etc. financial position or accounting.
  • Members of the board of directors and any of the senior management who recommend the distribution of profits to members or others, or the distribution of bonuses to members of the board of directors in violation of the provisions of this legislative decree, its rules of procedure or any of the decisions made pursuant thereto, as well as any auditor who approved this distribution with knowledge of the violation.
  • A fine of not less than 100,000 dirhams and not more than one million dirhams shall be imposed on anyone who unlawfully uses a name or logo that shows the public that this work or project is cooperative, as well as anyone who falsely uses a cooperative logo. , and any person or entity that has conducted business. It suggests that it is an unregistered cooperative, in violation of the provisions of this Legislative Decree.
  • A liquidator who recommends the distribution or distribution to members of the cooperative’s assets, or who carries out any practice, procedure or act contrary to the professional principles laid down in the applicable law, shall be punished by a fine of not less than 50,000 dirhams and not more than five hundred thousand dirhams.

Listing on the financial markets

It provides that a cooperative may list its shares on the country’s financial markets in accordance with the terms that regulate it from the financial markets Establishment of commercial companies or cooperatives, either alone or together with others, and the cooperative may convert into a company. in the form specified in the Companies Act in accordance with the terms and conditions specified in the Executive Regulations of this Legislative Decree.

The cooperative may, by virtue of a special resolution, obtain gifts and grants after obtaining approval from the competent authority and the applicable legislation in the country.

reconcile the situation

Cooperatives that exist at the time of the implementation of the provisions of this Legislative Decree must reconcile their status within a period of no more than two years from the date of its entry into force, provided that a decision made by the Council of Ministers may extend this period per the minister’s recommendation.

The cooperative may, after approval by the competent authority and the issuance of a resolution by the general meeting, set aside a percentage of its annual profit, or the accumulated profit, for social responsibility.


The cooperative may, with the approval of the competent authority, merge with another cooperative, and the competent authority may, on its own or at the request of the cooperative’s board, decide to merge more than one cooperative if such a merger would achieve the interests of the cooperative movement in the emirate or the interests of the members of these cooperatives. This requires approval from the competent authority in each emirate.

joint cooperatives

The decree law provides that any number of licensed cooperatives may form joint cooperatives among themselves to produce or import what the activities of those cooperatives require or to serve their various purposes, and cooperatives of the same type may form a union among them.

Executive Regulations

The Council of Ministers issues, on the basis of the Minister’s proposal, the implementing regulations for this legislative decree within six months from the date of its entry into force. The provisions of this legislative decree. This legislative decree is published in the Lovtidende and enters into force three months after the date of its publication, as it was published in the issue dated 30 August 2022.

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