Legal Structures

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Legal Structures

Civil Company– The civil company has a very similar structure to a sole establishment, with the exception that a civil company has two or more practicing partners. The owners of the business need to appoint a UAE National service agent, who will handle all the legal matters of the business.

Joint Stock Companies – The option of forming joint stock companies is only open to UAE Nationals. There are two types of Joint Stock Companies:

  • Public: These joint stock companies are more suitable for large corporations and usually tend to include banks, insurance companies and financial institutions. The minimum start up capital for a public joint stock company is AED 10 million and the board members are typically UAE Nationals.
  • Private: A private Joint Stock company is very similar to the public one, with the exception that a small start up capital of AED 2 million is required as the minimum investment.

Limited Liability Company (LLC) – A Limited Liability (LLC) company is one of the most common form of establishment in the UAE. In a LLC setting, a company can have anywhere between two to fifty partners. The UAE National partner has a 51% stake in the company, and the remaining partners own 49% of the company. As the name suggests, in a limited liability company, the owners liability (or risk) is only limited to the amount he or she has invested into the business. The partners are not personally liable to pay from their personal savings, shall the company face debt or are forced to close down.

General/Limited Partnership – In accordance with the Dubai Economic Department, a general partnership is “an arrangement between two or more partners whereby each of the partners is jointly and severally liable to the extent of all their assets for the company’s liabilities.” General Partnerships are unlimited liability, which means that partners are personally liable to pay off the debt if the company goes bankrupt.

A good alternative for opening a partnership business is a Limited Partnership. Here the risk is limited to the amount invested into the business. General/Limited Partnership businesses can only be owned by UAE Nationals.

To get more information about this type of business structure, please call +971 4- 310 8000 and the members of our staff will be glad to assist you.

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