A Sole Proprietorship is a business owned by an individual, not a company. This person will own 100% of the business, control all of its operations and keep 100% of any profits. He or she will also be 100% responsible for business debts and any other financial obligations.
A Civil Company is a business partnership for professionals in recognised fields such as doctors, lawyers, engineers and accountants. A Civil Company can only practice professional business and is 100% owned by professional partners.
A Limited Liability Company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC must have between 2 – 50 shareholders, each of whom is liable only to the extent of his or her share in the capital of the company. LLCs can conduct any industrial or commercial business, but not professional – except banking, insurance or investment. LLCs cannot practice law, auditing, accountancy or any other type of consulting service. The business name should be the same as the trade name or contain the names of one or more of its partners. The phrase “Limited Liability Company” must also be added to the business name. LLCs must appoint between 1 – 5 managers for the business. The managers may be selected from the partners. Unless the Memorandum of Association states otherwise, the manager has full powers of administration. Within the scope of his or her powers, the manager’s actions and commitments are binding to the business.
A Private Shareholding Company (Private Joint-Stock Company) is a partnership of at least three individuals. The partners must invest a minimum capital of AED 2,000,000 in the business. A Private Joint-Stock Company can be created for any commercial or industrial type of business. Professional activities are not allowed under this legal form. The company must have an appointed manager.
A Public Share Holding Company is a company whose capital is divided into transferable shares of equal value. It must have a minimum capital of AED 10,000,000. The business name cannot include the name of any of the shareholders, with the exception of patents registered in the name of a shareholder or if the business uses a store that has the name of a shareholder. The phrase “Public Shareholding Company” must be included in the business name.
A Simple Limited Partnership is formed between a minimum of two partners – one general partner and one limited partner. The general partners are liable for the company’s liabilities to the extent of all their personal and business assets; the limited partners are liable for a share of company liabilities equal to their share of the company capital. Each general partner and limited partner can own any share of the business. There is no minimum or maximum ownership level for any partner. A limited partner may not intervene in management or administrative issues related to the other partners. If he or she does so, that limited partner shall be responsible for all the business’s obligations. The name of the company should be that of one or more of the general partners, with an addition noting that this is a company name. The company can also have a special trade name. The name of any limited partner should not be mentioned in the name of the company.
A Partnership Company is a single business where two or more people share ownership. Each partner contributes to all aspects of the business and must administer the company unless a contract assigns administration to one partner or to another party. The owners of the partnership company are jointly and severally responsible for the company’s liabilities. This means that if the business is unable to pay its debts with the proceeds of its operations, the personal and business assets of one or all of the partners can be used to pay creditors. No agreement to the contrary can be made against third parties. The name of the business must contain the name of one or more of the partners, with the addition of a word signifying that it is the name of a business. If a non-partner is named in the business name, with his or her knowledge, that individual is jointly responsible for the business’s debts. The business can also have a commercial name.
A Branch of a Foreign Company must have a manager to represent the company and to open the branch, appointed by the Board of Directors. The branch will become the company’s Dubai headquarters, and its business shall be subject to the provisions of the laws of Dubai and the UAE. The branch can conduct selected commercial and professional activities, but cannot import goods into Dubai; this will be managed by a local trade or commercial agency. The branch office must have an independent budget, its own profit/loss statements and must appoint a UAE-accredited auditor. A Branch of Foreign Company also requires a Local Service Agent (LSA), who can be a UAE National or a company owned by one or more UAE Nationals. A Representative Office for Commercial Activities is not a business structure in its own right but it is a business activity that a branch can conduct. It has its own criteria, which includes the authorization to promote and market the parent company’s business – but not conduct business operations. A Representative Office requires a Local Service Agent (LSA), who can be a UAE National or a company owned by one or more UAE Nationals.