Business organizations can take one of seven forms, namely Public Shareholding Companies, Private Shareholding Companies, Limited Liability Companies, General Partnerships, Limited Partnerships, Partnerships Limited by Shares, Professional Company, and Shareholding Companies.
Partnerships come in several forms, namely limited partnership, limited liability partnership, and general partnership. A limited partnership (LP)—not to be confused with a limited liability partnership (LLP). According to Article (47) of Federal Law No. (8) of 1984 LP has defined a simple limited partnership as being a company formed by one or more general partners liable for the company liabilities up to the extent of all their assets, and one or more limited partners liable for the company liabilities up to the extent of their respective shares in the capital only. All general partners in a simple limited partnership should be holders of the UAE nationality.
Rules of Limited Partnership
The limited partnership is a partnership for all partners, and is subject to all partnership rules, based on the following.
- In addition to the other details, the simple liability contract shall include the name of every partner, his surname, date of birth, country, nationality, the portion paid out, and capital share.
- The limited partner is only responsible, with its capital share, to the borrowers of the company.
- A limited partner does not interfere in other-related matters relating to the company's administration even though, after authorization, he will request a copy of the loss/profit reports and the balance sheet and verify the authenticity of the data. If the limited partner breaches the previously mentioned ban, he will be responsible for all the obligations arising from his business in all companies.
- The limited partner may be held accountable in all his money for all obligations of all the corporation.
- If the limited partners carried out any of the banned administration business based upon an explicit or implicit authorization from the partners, such partners should be held responsible with him for the obligations resulting from such acts.
- A limited partnership shall issue resolutions in the consensus of all partners and limited partners unless the contract states a majority, and the majority in number shall be considered unless otherwise stated.
- Resolutions to amend the company contract shall not be passed unless duly approved in the consensus of all partners and limited partners.
Termination of Partnership
The termination of a partnership occurs when the following four things take place.
- Withdrawal of a partner
- A bankruptcy of a partner
- The insanity of a partner
- Death of a partner
However, the relationship can continue if the rest of the partners agree unanimously on it. In this case, such a decision must be properly registered in the register of commerce.
Steps to Setting Up a Company in Abu Dhabi
Here are a few steps involved in setting up a Limited Partnership Business in Abu Dhabi.
- Approved trade name - see our guide on trade names
- Approval from the General Directorate of Residency and Foreigners Affairs for any foreign investor
- You will also have to seek provisional approval, which is a certificate that enables you to apply for a business license.
- You may also need to obtain authorization from other relevant authorities; this will depend on the nature of your business. For example, if your company operates in the insurance sector, you may need to get approval from the insurance authority, similarly, if your company operates in the healthcare sector, you may need approval from the health ministry.
- You may apply for a business license via the website of the Department of Economic Development (DED), or in person at a DED customer service centre.
When you submit a commercial license issuance application form, you will also need to provide the following documents.
- Certificate of Trade name
- Certificate preliminary approval
- UAE identification card (and visa, if applicable) of the applicant
- The registration extract for each concerned who is a citizen of the Emirates
- The lease arrangement for your place of business
- If you have a representative presenting your application for a license, a power of attorney approved by a notary public.
- A representation, e.g. photo or photocopy, of the business sign, carrying the calligrapher's seal and signature and the measurements of the board
- A no-objection certificate issued by the appropriate authority if your business needs permission to carry out its economic activity
- The approval from the General Directorate of Residency and Foreigners Affairs for any foreign investors
- The partnership's founding agreement, authenticated by a notary public
- Proof that the partnership's founding agreement has been published in the Ministry of Economy bulletin
- The registration certificate from the Economy Ministry
Costs Involved in the LP Registration Process
The following fees vary according to business activity.
- Commercial license issue fee-AED 100
- Commercial register fee-AED 100
- Signboard fee-AED 150 per square meter
- Operation fee, commercial operation value + 25 per cent service enhancement fee
If you are looking forward to setting up a business in Abu Dhabi, then we at Commitbiz have time-tested options of registration and establishment of a modern and profitable business. All you need to do is contact us today and get a free consultation. We assist with issues regarding business registration, visa registration, licensing of business and many other incorporation services.