LLC formation

Limited-Liability Company (LLC)

In a limited-liability company, the minimum number of shareholders is two and the maximum is fifty. The liability of shareholders is limited to their shares in the capital. The company may carry on any type of activities except insurance, banking, or money investment. In UAE, the minimum capital requirement law was abolished on 10th August 2009.

The memorandum of association must include the following:

Trade name of the company, its objectives, head office, duration, names of shareholders, their nationalities, addresses, and places of residence; and Amount of capital, share of each shareholder, and a statement of capital paid in kind (if any), names and nationalities of the company managers, distribution of profits and losses which may not necessarily be in the same proportion as the capital, and the adopted method of notification.

In Dubai, Capital Deposit rule has been cancelled. i.e. Limited Liability Company can be formed without Bank Deposit Certificate and Auditor Certificate. In Abu Dhabi, minimum capital requirement is Dh150,000. The manager of the company will be allowed to operate the account as soon as the incorporation is completed. The Manager of the company can be more than one and he/they shall have all administrative and financial powers. A shareholder may transfer his share in the company or part of it to another shareholder or to a third party. 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.

In distribution of profit and loss, foreign investor can have 80% and 20% for thelocal UAE sponsor.

It is imperative that each limited-liability company appoints auditors to satisfy the requirements of the Commercial Companies Act. The law does not permit this form of company to issue share certificates. Evidence of ownership in the company is related and evidenced by the percentage contributed, assigned, or transferred in the share capital.

Silent Partner
A larger portion of Dubai Limited Liability Companies use the local UAE sponsor as a "silent partner." In this arrangement, the local UAE sponsor is usually paid an annual "sponsorship fee" in return for giving up management control of the company to the foreign investor.


Preparing Memorandum of Association (LLC Agreement)

Attestation of Memorandum of Association from Notary Public. As per the new rule, the court agreement must be typed by legal translator or get seal and signature of the legal translator on the agreement if it is typed from normal typing centre.

Submit Initial approval, Name reservation certificate, Attested Memorandum & Tenancy Contract at Department of Economic Development.

The Payment voucher will be issued at the same time or can be printed from DED Website after two days.

Special approval required for certain business activities from the concerned authorities.


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We are always welcome you to get free advice from us :: Five "DOs"when you open a new Business in Dubai, UAE.