Dubai: The UAE Government legalises and facilitates various types of large and small businesses under specific terms and conditions that have been declared by the Federal Law No 8 of 1984 regarding commercial firms and according to Federal Law No 15 of 1998 amendment. All types of businesses, however, must be licensed with the Ministry of Economy and Commerce.
The authorised types of business will take the following legal terms:
Limited Liability Company
This type of business comprises a minimum of two and a maximum of 50 members. Shareholder liability is limited to the value of shares held in the company's capital. The minimum capital required to set up a limited liability company is Dh150,000 in Abu Dhabi and Dh300,000 in Dubai. Management is handled by no more than five designated managers, who are not necessarily members of the company. Non-UAE nationals may own up to 49 per cent of an LLC.
General partnerships are formed by two or more UAE nationals who are jointly and individually liable for its debts. Only the names of actual partners can be included in the company name, but the company may have a special trade name.
This business is composed of one or more general partners who are jointly and individually liable for all of its debts, and one or more limited partners who are liable for the limited partnership's debts only to the extent of their capital contribution.
Partnership Limited by Shares
A partnership limited by shares has both general partners with unlimited liability and partners whose liability is limited by their shares in the capital. General partners must be UAE nationals while participating partners may be non-nationals. The capital must be at least Dh500,000 and be divided into negotiable shares of equal value.
Private Shareholding Company
A private shareholding company must have a minimum of three shareholders. The minimum capital of a private shareholding company is Dh2 millions. Shares may not be offered to the public.
Public Shareholding Companies
A minimum of 55 per cent of the shares of a public shareholding company must be offered to the public. The minimum amount of capital for a public shareholding company is Dh10 million, of which a minimum of 25 per cent must be settled on subscription. A shareholder's liability is limited to the nominal value of his shares in the company's capital.
The PSC must have at least 10 founders, unless a government entity is involved, in which case the number of founders may be lower. The board of directors of this type of company must have a minimum of three and no more than 12 directors.
A joint venture is formed by agreement between two or more persons or legal entities, and its objectives and terms are governed by the joint venture contract. This agreement is not subject to registration in the Commercial Register.
A joint venture may be carried out only in the private name of one of the UAE national partners.