Planning to start a business in Abu Dhabi but confused about which business structure suits your venture the best? You can consider setting up a limited partnership company, or LP. This model allows you to have both active and passive investors. This structure offers flexibility and clearly defines who is responsible for what. It is also an excellent option for business owners who want to involve investors without them being involved in daily operations. Let’s explore the details of limited partnership formation in Abu Dhabi.
What is a Limited Partnership Company?
A limited partnership formation is a business structure formed by two partners - a limited partner or a silent partner and a general partner. The general partner is responsible for managing daily business operations and is liable for the company’s debts and obligations. On the other hand, the silent partner contributes capital to the business but does not take part in its management. They are only responsible for capital invested in the business.
What are Limited Partnership Regulations in Abu Dhabi?
Understanding the limited partnership regulations in Abu Dhabi is essential for successfully launching your company. Here are some of the key requirements you should keep in mind before initiating the process of business setup in Abu Dhabi:
- The partnership contract must clearly mention the full name of both partners, nationality, date of birth, and capital share.
- A silent partner cannot indulge in administrative tasks, but can review balance sheets and financial reports for verification purposes.
- A limited partner can lose their status if they do not adhere to the set regulations. If rules are not followed, then they could be responsible for paying off all the company’s debts.
- If a limited partner helps manage the business, they may have to pay for any problems that happen because of it.
- A limited partnership company in Abu Dhabi can keep running even if a silent partner leaves or passes away.
How to Set Up a Limited Partnership in Abu Dhabi?
Starting a business in Abu Dhabi involves following regulatory steps and complying with local laws from the Abu Dhabi Department of Economic Development (ADDED). Let us have a look at the generic steps:
Step 1- Decide on the name for the limited partnership formation in Abu Dhabi and secure trade name registration.
Step 2 - Decide whether you wish to set up your company in Abu Dhabi free zones or on the mainland.
Step 3 - Prepare the required documents and complete the application for limited partnership formation in Abu Dhabi. Commitbiz business setup consultants will help you submit the following to the relevant authorities to apply for preliminary approval.
Step 4 - Based on your business activity, we will secure the appropriate permits and approvals for your limited partnership company in Abu Dhabi.
Which Documents are Required for a Limited Partnership Formation in Abu Dhabi?
Certain documents which are essential to starting a limited partnership company in Abu Dhabi are mentioned below.
- Emirates ID copy
- Copy of preliminary approval
- Copy of trade name certificate
- Passport copies of both partners
- No objection certificate (if required)
- Notarised founding agreement of the partners
For detailed information, reach out to business experts at Commitbiz. We can streamline all the documents, avoiding delays and penalties.
What is the Cost of Limited Partnership Formation in Abu Dhabi?
When forming a limited partnership in Abu Dhabi, your choice between a mainland or freezone setup will impact both the cost and structure of your business. Below is a comparison to help you understand the key differences and inclusions:
|
Abu Dhabi Mainland |
Abu Dhabi Freezone |
|
|
Starting Price |
AED 12,345 |
AED 12,075 |
|
License Type |
Commercial License |
Freezone Business License |
|
Key Inclusions |
|
|
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Best For |
Businesses which need physical presence and access to government contracts. |
For startups or foreign-owned businesses. |
How Can Commitbiz Help?
A limited partnership formation in Abu Dhabi requires careful attention to detail, compliance with local regulations, and thorough documentation to ensure a smooth setup process. With our assistance, entrepreneurs can easily glide through the company formation process and ensure full compliance with Abu Dhabi’s legal and regulatory framework. We also provide post-company incorporation services such as availing visas, opening a bank account, and more. Contact us for more information on limited partnership formation in Abu Dhabi.
What is the cost of setting up an LP in Abu Dhabi?
The cost of setting up a company varies based on jurisdiction, approvals required, business activity, and the type of licenses needed.
Why start an Abu Dhabi limited partnership company?
Establishing an LP has plenty of advantages. Some of them include access to international markets, tax benefits, and advanced infrastructure.
What is the difference between a limited liability partnership (LLP) and a limited partnership?
In an LLP, all partners share responsibility and have limited liability. In an LP, one partner manages the business and carries full liability, while others just invest money and have limited risk.
How long does it take for a limited partnership formation in Abu Dhabi?
Launching an LP in Abu Dhabi can take up to 4 weeks.
Do I need a local office to register a limited partnership?
Yes, having a physical office space is mandatory for setting up an LP in Abu Dhabi.