Clearer rules when a shareholder dies

One of the most significant changes is the new framework governing the disposal of shares belonging to deceased partners or shareholders. The law now gives priority rights to existing partners, shareholders or the company itself to purchase those shares at an agreed value.

This is designed to prevent ownership from becoming fragmented or passing to unintended parties, a common trigger for disputes in family-run firms.

“These amendments will represent a qualitative leap in corporate governance and business regulation in the UAE,” bin Touq said. “They create new attraction factors for local and foreign companies and investments in line with global best practices.”

Reducing deadlock between heirs

Family businesses often struggle when ownership is divided among multiple heirs, some active in the business and others not. The new law allows multiple classes of shares in limited liability companies, giving families more flexibility to separate control from financial interest.

This makes it easier to reward active family members with decision-making authority while still protecting the economic rights of others, reducing the risk of internal paralysis.

Smoother exits and buyouts within families

The formal recognition of drag-along and tag-along rights also helps manage situations where some family members want to sell and others do not. These provisions make it easier to proceed with sales, buyouts or strategic partnerships without long-running disputes.

The aim, officials say, is to support smoother ownership transfers and encourage mergers and acquisitions.

Easier restructuring across generations

The law now allows companies to change their legal form without being treated as a new entity. For family firms, this means they can restructure, professionalise or prepare for future listings without losing their commercial history or contracts.

“We anticipate an increase in company registrations and licences in UAE markets by 10–15 per cent in the first year of implementation,” bin Touq said, highlighting the expected impact of the reforms.

A timely change

Many of the UAE’s family businesses were founded decades ago and are now entering second- and third-generation ownership. As companies grow larger and more complex, the risks associated with poorly managed succession increase.

By strengthening rules on ownership transfer, control and restructuring, the new law aims to protect business continuity at a critical moment for thousands of family firms.

As bin Touq put it, the goal is to build legislation that “meets the aspirations of the business community, our key partner in sustainable development over the next 50 years.”