4.1. Incorporation of a Venture Studio Company

4.1.1.     A Venture Studio Company must only be incorporated by a Venture Studio. A Venture Studio that wishes to incorporate a Venture Studio Company must file an application with the Registrar in the prescribed form against payment of the required fees as a Private Company under Schedule 5 of the AIFC Fees Rules to be evidenced. 

4.1.2.     A Venture Studio wishing to incorporate a Venture Studio Company in the AIFC must satisfy or undertake  to the Registrar that:

(a)                the Venture Studio, or an Affiliate, will hold all of the Shares in the Venture Studio Company upon its incorporation; 

(b)                if applicable, the Entrepreneur is informed about the Resolution of the Venture Studio on incorporation of a Venture Studio Company; 

(c)            if applicable, there are no outstanding liabilities of the Venture Studio under the relevant Venture Sponsorship Agreement with the Entrepreneur; and

(d)                during the Start-up Period, the Venture Studio Company, or in the event that a Venture Studio Company incorporates a Subsidiary in the AIFC, the Subsidiary of the Venture Studio Company, must:

(i)                   adhere to the requirements of Part 14-1 of the AIFC Companies Regulations or AIFC Anti-Money Laundering, Counter-Terrorist Financing and Sanction Rules 2017 if applicable;

(ii)                carry out all compliance, governance and regulatory obligations, filings or other requirements pursuant to any requirements of Legislation Administered by the Registrar; and

(iii)               comply with the requirements of subrule 4.2.1,

and provide information of such matters to the Registrar in an agreed format in connection with such Venture Studio Company.

4.1.3.     However, the Company must not be incorporated as a Venture Studio, unless the Commissioner for Innovation has given its prior Written consent.

4.1.4.     If a Venture Studio violates subrule 4.1.2(d), the Registrar in the performance of any Function under the Legislation Administered by the Registrar may in good faith, without further enquiry:

(a)                revoke a Venture Studio’s status after following the Decision-Making Procedures pursuant to rule 5.6 of these Rules;

(b)                if a Venture Studio or Venture Studio Company is regulated by the AFSA, or in the process of applying for authorisation from the AFSA, inform the AFSA of any facts or circumstances that may amount to a breach of such entity’s regulatory duties under the Acting Law of the AIFC; or

(c)                 inform any body, authority or law enforcement agencies of any alleged or suspected criminal offences on the part of a Venture Studio or a Venture Studio Company.

4.1.5.     The Registrar may communicate directly with either a Venture Studio or a Venture Studio Company with regards to those matters dealt with at subrule 4.1.2(d).

4.2. Requirements applicable to a Venture Studio Company

4.2.1.     Subject to subrule 4.2.2, a Venture Studio Company must:

(a)                have a term not exceeding the Start-up Period;

(b)                have no more than 10 Shareholders; 

(c)                have no more than 20 Employees; and

(d)                not undertake any Capital Raisings that are in aggregate in excess of U.S. $5,000,000.

4.2.2.     A Venture Studio Company may apply to the Commissioner for Innovation for an exemption from one or more of the requirements set out in subrule 4.2.1, and such exemption may be granted at the  Commissioner for Innovation’s discretion.

4.2.3.     If a Venture Studio Company no longer complies with subrule 4.2.1, the Registrar may revoke a Venture Studio Company’s status in accordance with rule 5.6.

4.2.4.     A Venture Studio Company may at any time apply:

(a)                to the Registrar to suspend its activity and for its name to be struck-off the Public Register in accordance with section 167 of the AIFC Companies Regulations; or 

(b)                for voluntary wind-up pursuant to the AIFC Insolvency Regulations.

Note: Notwithstanding anything in the AIFC Insolvency Regulations, a Resolution for Voluntary Winding Up of a Venture Studio Company may only be passed if there are no outstanding liabilities of the Venture Studio Company.

4.3. Expiry of Venture Studio Company status

Upon expiry of the Start-up Period, and provided that it is not subject to an application or procedure pursuant  to subrule 4.2.4, a Venture Studio Company must be converted into a Private Company in the AIFC that falls outside the scope of section 143 of the AIFC Companies Regulations, at which point it must:

(a)                cease to be a Venture Studio Company;

(b)                no longer be entitled to the benefit of any exemption or concession (including as to fees) in these Rules; and

(c)                be required to adhere to all the requirements under the AIFC Companies Regulations.