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Types of Companies

The UAE Company Law defines a company as "a contract in accordance with which two or more persons participate in an economic project by providing a share of the funds or effort required and to share the profits or losses resulting from such project". An economic project is defined as "any commercial, financial, industrial, agricultural, real estate or such like economic activity".

This definition is similar to that adopted for companies in the UAE Civil Code. A business established by an individual could not be considered as a company in accordance with the aforementioned definition in the Company Law. The conduct of business through individual establishments owned either by a UAE national, or by an expatriate, is quite common in the UAE. Foreign individuals establishing a business presence would be required to have a national sponsor. Thus, the provisions of the Company Law will not be applicable to such individual establishments. However, such establishments have to register in the Commercial Register and acquire the requisite Municipality licence in the Emirate where business is being conducted.

Companies incorporated in the UAE have to take the form of one of seven types.

1. General Partnership

2. Simple Limited Partnership

3. Joint Participation (Venture)

4. Public Joint Stock

5. Private Joint Stock

6. Limited Liability

7. Partnership Limited with Shares

The above types of companies may also be classified into two distinct groups and a third group which is a combination of the first two:

1. Personal Companies: which are normally established when there is a strong personal relationship and trust between the members, namely:

    1.1 General Partnership
    1.2 Simple Limited Partnership

    1.3 Joint Participation (Venture)
2. Capital Companies: incorporated by shareholders to participate in the capital of the company, with the personal relationship between the members being of less importance:
    2.1 Public Joint Stock
    2.2 Private Joint Stock
3. Combination of Personal and Capital: in which, as the description signifies, both the personal relationship and the capital provided is of importance:
    3.1 Limited Liability
    3.2 Partnership Limited with Shares.
This classification has some relevance in the registration procedures for the different groups as will be later detailed.

In addition to the provisions stipulated for these types of companies, the Company Law provides for the registration of branches and offices of foreign companies.

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For further information on UAE Company Law and Practice, it is recommended that the full text be referred to. Click on the link to obtain a copy. For specific legal advise, please contact Sabah M A mahmoud or other reputable Law Firm.

 

 
Types of Companies in the United Arab Emirates or UAE according to company law

 

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