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What are the 2026 classes of shares for LLCs

For decades, the Limited Liability Company (LLC) in the UAE followed a rigid “one size fits all” rule: one share equals one vote, and everyone gets paid at the same time. While this was simple, it was a major hurdle for startups looking for Venture Capital (VC) or founders wanting to retain control while raising funds.

Everything changed with the 2026 updates to the UAE Commercial Companies Law (Federal Decree-Law No. 32/2021 as amended by No. 20/2025).   

For the first time in UAE history, mainland LLCs can now move away from “Ordinary Shares” and adopt sophisticated capital structures that were previously only possible in offshore zones like the DIFC or ADGM. Here is a deep dive into the new classes of shares available to UAE founders today.   

1. The Breakthrough: Moving Beyond Ordinary Shares

Historically, all partners in an LLC were “equal” in rights. If you owned 10% of the company, you had 10% of the vote and 10% of the profit. This made “Liquidation Preferences” a standard requirement for international investors impossible to implement on the mainland.   

In 2026, the law now expressly allows Multiple Share Classes. This means you can divide your company’s capital into different “buckets,” each with its own set of rules regarding:   

  • Voting Rights: Who calls the shots?

  • Dividend Priority: Who gets paid first?

  • Liquidation Preference: Who gets their money back first if the company is sold?

  • Redemption Rights: Can the company “buy back” the shares later?

2. The New “Big Three” Share Classes for 2026

A. Preferred Shares (The Investor’s Choice)

Preferred shares are designed to attract external investment. In the 2026 framework, these shares typically carry “Economic Priority.”

  • Priority Dividends: Preferred shareholders can be entitled to receive dividends before any “Ordinary” shareholders receive a fils.   

  • Liquidation Preference: If the company is liquidated or sold, Preferred shareholders get their initial investment back first.

  • Limited Voting: Often, Preferred shares come with limited or no voting rights on day-to-day operations, but have “Veto Rights” over major decisions like selling the company or taking on massive debt.

B. Founders’ Shares (The Control Mechanism)

Founders often worry about being “diluted” out of their own company. The 2026 law addresses this by allowing weighted voting.  

  • Super-Voting Rights: A Founder’s share (Class A) could carry 10 votes per share, while an Ordinary share (Class B) carries only 1 vote.

  • Governance Protection: This allows you to raise capital by giving away equity (ownership) without giving away the steering wheel (control).

C. Non-Voting or “Management” Shares (The ESOP Tool)

As the UAE war for talent heats up, Employee Stock Option Plans (ESOPs) are becoming standard.

  • Economic-Only Rights: These shares allow employees to participate in the financial success of the company (dividends and exit proceeds) without granting them the power to vote in shareholder meetings.

  • Easy Offboarding: These are often “Redeemable,” meaning the company can buy them back at a pre-set price if the employee leaves the firm.

3. The Legal “How-To”: Registering Your Classes

You cannot simply “decide” to have share classes; they must be legally anchored in your Memorandum of Association (MoA).   

  1. The MoA Update: You must explicitly define each class (e.g., “Class A Preferred”) and list the specific rights attached to it.

    Notary Public Attestation: The updated MoA must be notarized. The UAE Notaries are now trained to recognize these “Common Law” style structures in Arabic/English bilingual documents.

  2. Commercial Register: Your specific share classes must be recorded in the Commercial Register maintained by the Department of Economy and Tourism (DET). This ensures that your cap table is transparent and legally enforceable.   

4. common Law Features Now in Mainland LLCs

The 2026 reform also formally recognized two critical concepts that work hand-in-hand with multiple share classes:

  • Drag-Along Rights: If 75% of shareholders want to sell the company, they can “drag” the minority along, preventing a single small shareholder from blocking a massive exit.   

  • Tag-Along Rights: If a majority shareholder sells their stake, minority shareholders have the right to “tag along” and sell their shares at the same price and terms.   

5. Why This Matters for Your 2026 Growth Strategy

Before 2026, if a founder wanted a “Liquidation Preference” for an investor, they had to create a complex (and expensive) mirror structure with a holding company in the aADGM or DIFC.

Today, you can do it all on the Mainland. This reduces your setup costs, simplifies your tax filing, and makes your company “VC-Ready” from day one. It bridges the gap between the traditional LLC and the modern global startup.

The FounderX Advantage: Tailoring Your Cap Table

Setting up an LLC is easy; structuring a future-proof capital stack is an art. At FounderX, we specialize in drafting bespoke Memorandums of Association that go beyond the “standard template.”

Whether you are looking to protect your voting power as a founder or looking to issue preferred shares to a new angel investor, our team ensures your share classes are compliant with 2026 regulations and attractive to future partners.