In the UAE, there are a variety of company forms available for individuals and organizations to choose from when starting a business. Each type of company has its own advantages and disadvantages, which investors should carefully consider before deciding on the right form for their company. In this article, we will discuss in detail the different types of companies in the UAE, including general partnership, limited partnership, public joint stock company, private joint stock company, Limited Liability Company, one-person limited liability company, holding company and sole proprietorship. We will explore the descriptions of each type, the requirements for its establishment, and the advantages and disadvantages associated with each.

 General Partnership Company

A general partnership company is a type of company that consists of two or more partners, where all partners are jointly liable for the company’s obligations. This means that if the company is unable to pay its debts, creditors can claim their money from any of the partners regardless of their share in the company.

The basic requirements for establishing a general partnership company in the UAE are that all partners must be UAE nationals. This requirement is intended to ensure that the company is managed locally and that the partners have a commitment to the state. The advantages of a general partnership include the ease of incorporation compared to some other forms of business, and the ability of partners to diversify their business activities. However, the unlimited liability of partners for the company’s debts may be considered a major drawback of this type of company. This may deter some investors from choosing this structure for their company.

Simple Limited Partnership

  • The Simple Limited Partnership is another form of company in the UAE. This company consists of a general partner and a limited partner. The general partner is the one who manages the company and bears unlimited liability for its debts, while the limited partner is the one who contributes capital only and does not interfere in the management of the company and his liability is limited to the extent of his share in the capital.
  • One of the basic conditions for establishing a Simple Limited Partnership is that the general partner be an Emirati citizen. This condition aims to ensure that the company is managed locally by a person who has a commitment to the state.
  • The advantages of a Simple Limited Partnership include the diversity of business activities that the company can undertake, as well as the limited liability of the limited partner. However, the limited involvement of the limited partner in the management of the company may be limited compared to the general partner, which may be considered a disadvantage for some investors.

Public Joint Stock Company

  • The Public Joint Stock Company is another type of company in the UAE. This type of company has public shareholders, meaning that its shares are available to the public for subscription.
  • One of the basic requirements for establishing a public joint stock company is that there must be at least five shareholders. This requirement aims to ensure that the company has a diverse shareholder base.
  • One of the advantages of a public joint stock company is its ability to attract large capital from the public by offering its shares for public subscription. However, compliance with periodic financial reports and public disclosure of financial statements may be considered a burden for this type of company.

Private Joint Stock Company

  • A private joint stock company is another type of company in the United Arab Emirates. In this type of company, the shareholders are limited and do not have the right to offer its shares for public subscription.
  • One of the basic conditions for establishing a private joint stock company is that there must be at least three shareholders. This condition aims to ensure that the company has a diverse shareholder base.
  • One of the advantages of a private joint stock company is the freedom to work and expand without being bound by the public disclosure requirements imposed on public joint stock companies. However, the limited liability of shareholders may be considered a disadvantage for some investors.

Commercial Licenses

Includes several types, such as:

  • Commercial licenses that allow companies to practice the commercial activities specified in the license.
  • Commercial licenses that allow the provision of specific services clearly stated in the license.
  • Commercial licenses that allow the practice of general trade not restricted to a set of activities.
  • Licenses designated for operating businesses in free zones.
  • Licenses designated for organizing special events, such as organizing conferences and meetings12.

The cost of a commercial license varies by type and region There are some basic points that you should take into consideration when obtaining a commercial license in the United Arab Emirates:

  1. Complete all required documents:
    • The required documents and papers must be complete and correct, such as copies of passports, ownership certificates, etc.
    • The required documents may vary depending on the type of license and region.
  1. Determine the location and address:
    • Make sure that the address you have chosen for your business is permitted and complies with local laws and regulations.
    • You may need the approval of the property owner or the authority responsible for the area.
  1. Obtain the necessary approvals:
    • Additional approvals may be required from other entities, such as civil defense or municipality, depending on the type of activity.
    • Make sure that all requirements are met to obtain these approvals.
  1. Pay the required fees:
    • Find out the cost of the commercial license appropriate for your activity and the region in which you wish to operate.
    • Fees may vary depending on the type of license and additional services required.
  1. Renewal and Continuous Compliance:
    • Remember that the commercial license needs to be renewed on its specified dates.
    • Ensure continuous compliance with the applicable laws and regulations to avoid any future problems.

By adhering to these basic steps, you will be able to obtain the appropriate commercial license for your business activity in the United Arab Emirates

dissolution and liquidation the company

The company shall be dissolved by a decision issued by the Executive Council, in any of the following cases:

  1. The expiry of the specified term of the company, as stipulated in these regulations.
  2. The end of the purpose for which the company was established.
  3. Issuance of a special decision by the General Assembly to terminate the term of the company.
  4. Merging the company into another company.
  5. The loss of all or most of the company’s funds, such that it is impossible to invest the remainder in a profitable investment, as decided by the General Assembly pursuant to the special decision.

Finally, in light of what has been presented, it becomes clear to us the importance of seeking the assistance of professional legal experts to protect your rights and avoid any potential legal problems. Our law firm has extensive experience in various legal fields, and our team includes a group of the most prominent lawyers in the country with more than 25 years of experience. We are committed to providing reliable and effective legal advice to help you overcome any legal challenges you may face. Do not hesitate to contact us today to benefit from our expertise and obtain the legal solutions appropriate for your situation.