Understand what a UAE partnership means for your personal liability before you sign the memorandum. PROXPAT prepares the partnership documents and licensing file and coordinates legal review.
Page last updated: . Requirements, government fees and processing times are set by the relevant UAE authority and can change.
General and Limited Partnership Companies in the UAE
The UAE Commercial Companies Law recognises five company forms, and two of them are partnerships: the General Partnership and the Limited Partnership (Article 9). Unlike an LLC, a partnership has partners who are personally liable for the company's debts with all their own property.
A partnership can suit partners who know each other well and want simple, partner-led management, provided they accept that personal exposure. This page sets out the rules in Part Two of Federal Decree-Law No. 32 of 2021, Articles 39 to 70, together with the general accounting rules that apply to every company.
Please note: this is a summary of the Decree-Law, not legal advice. Licensing authorities set their own documents, activity rules and any ownership conditions.
General Partnership vs Limited Partnership
| Topic | General Partnership | Limited Partnership |
|---|---|---|
| Partners | Two or more natural persons (Article 39) | One or more general partners plus one or more limited partners; any natural or legal person can be a limited partner (Articles 62 and 63) |
| Liability | Every partner is jointly and severally liable for the company's obligations with all their property | General partners are fully liable; limited partners are liable only up to their capital contribution |
| Trader status | Every partner has the capacity of a trader, and bankruptcy of the company makes all partners bankrupt (Article 40) | General partners act as traders; limited partners do not |
| Management | All partners, unless management is delegated (Article 45) | Only the general partners (Article 66) |
| Name | Names of one or more partners with "and partners", ending with "General Partnership" (Article 41) | Names of one or more general partners plus the legal form; a limited partner's name may not appear (Article 64) |
How a General Partnership Is Formed
Step 1: Agree a memorandum of association (MOA) containing the details Article 42 requires.
Step 2: Submit the incorporation application and licensing documents to the licensing authority.
Step 3: Provide any missing information or MOA amendments the authority asks for.
Step 4: The authority decides within five business days of a complete application, and must give reasons for a rejection.
Step 5: On approval, the company is entered in the commercial register and a business licence is issued.
Step 6: Within five business days of the licence, send a copy of the licence and MOA to the Registrar for publication.
If an application is rejected or not decided in time, the applicant has 15 business days to file a grievance, and can then appeal to court within 30 business days (Article 43).
What the MOA Must Contain
- Each partner's full name, nationality, date of birth and place of residence.
- The company's name, address, any trade name and its objects.
- The headquarters and any branches.
- The capital, each partner's share, how shares are valued and when contributions fall due.
- The start date and any expiry date of the company's term.
- How the company is managed, its authorised signatories and the extent of their powers.
- The start and end dates of the fiscal year.
- The profit and loss sharing ratios.
- Any conditions for assigning shares.
If the MOA names the managers, it must also state each manager's full name, nationality, residence and powers. If the MOA does not set a partner's share of profits or losses, the share follows their capital contribution (Article 29).
Managing a General Partnership
| Rule | What the Decree-Law says |
|---|---|
| Who manages | All partners manage and act as agents of the company, unless the MOA or a separate contract delegates management to one or more partners or to an outsider (Article 45) |
| Decisions | Unanimous, unless the MOA provides otherwise (Article 45) |
| Non-managing partners | Do not take part in management, but may inspect the books and records and give observations to the manager (Article 45) |
| Competing business | A partner needs the other partners' written consent to compete with the company or be a general partner in another partnership, and must hand over profits made without it (Article 46) |
| Removing a manager | A partner appointed manager in the MOA can be removed only with the other partners' unanimous consent or by court judgment; other managers can be removed by majority (Article 47) |
| Resignation | At least 60 days' notice to the partners, unless the appointment contract says otherwise (Article 48) |
| Acts needing every partner's consent | Non-routine donations, selling property outside the company's objects, mortgaging company assets, guaranteeing third-party debts, and selling, mortgaging or leasing the business premises (Article 49) |
| Dealings with the manager | Contracts between the company and the manager or their relatives up to the second degree need all partners' written permission, case by case (Article 50) |
Joining, Leaving and Transferring Stakes
| Situation | Rule |
|---|---|
| A new partner joins | Becomes jointly liable with all their property for existing obligations disclosed to them and for all later obligations (Article 54) |
| A partner withdraws | By written agreement with the other partners or, failing that, by court case after at least 60 days' notice by registered mail (Article 55) |
| Liability after withdrawal | Continues for debts before the withdrawal, and for later ones until the withdrawal is recorded in the commercial register, announced in two local daily newspapers (one in Arabic) and 30 days have passed |
| Two-partner company | If one of two partners withdraws, the other has six months from recording the withdrawal to bring in a new partner, or the company is dissolved |
| Transferring a stake | Only with the consent of all partners and under the MOA's conditions; an agreement allowing unrestricted transfer is void (Article 56) |
| A partner dies | Unless agreed otherwise, the amount due for the deceased partner's stake becomes a debt from the date of dissolution or death, whichever comes first (Article 57) |
| Creditors | Can enforce against a partner's own property only after obtaining a writ of execution against the company and notifying it to pay (Article 60) |
Limited Partnership Rules
- Capacity: any natural or legal person can be a limited partner (Article 63).
- MOA: must name the general and limited partners. If it does not state their capacities, the company is treated as a general partnership and every partner as a general partner (Article 65).
- Contribution: a limited partner cannot contribute work instead of capital (Article 65).
- Management: only general partners manage. Changing the nature of the business or amending the MOA needs the consent of all general and limited partners (Article 66).
- Information rights: a limited partner can inspect the books and obtain information about the company, and can lend to or deal with the company with the general partners' consent (Article 68).
- Staying out of management: a limited partner who manages dealings with third parties, or leads them to believe they are a general partner, becomes liable with all their property (Article 69).
- Name: if a limited partner's name is added to the company name with their consent, they are treated as a general partner towards good-faith third parties (Article 64).
- Transfers: need all partners' consent or the MOA's terms, and take effect once registered with the licensing authority and notified to the Registrar (Article 70).
Records and Accounts
- A register of partners' names and addresses, kept at the headquarters (Article 44).
- A copy of the MOA and every amendment.
- A statement of the cash and assets each partner contributed, with their values and dates.
- Accounting records kept at the headquarters for at least five years after the end of the fiscal year (Article 26).
- Annual accounts, including a balance sheet and a profit and loss account, prepared under international accounting standards (Article 27).
Article 27 requires joint stock companies and LLCs to appoint an auditor, while other companies, which includes partnerships, may appoint one. Tax rules can still require audited statements. See accounting and record keeping.
Partnership or LLC?
| Topic | General Partnership | Limited Liability Company |
|---|---|---|
| Owners' liability | Unlimited, joint and several | Limited to each partner's share in the capital |
| Who can own it | Natural persons only | Natural or legal persons |
| Mandatory auditor | No, but one may be appointed (Article 27) | Yes (Article 27) |
| Management | All partners unless delegated | One or more managers |
If limiting personal liability matters to you, compare the LLC. For every legal form, see UAE company types.
Ownership and Activity Conditions
The Decree-Law lets the Cabinet define activities with a strategic impact and the controls for licensing them. It also lets each licensing authority set a ratio for UAE nationals' participation in the capital or boards of companies within its jurisdiction (Article 10). Check the licensing authority's current rules for your activity before choosing a partnership.
See business activity consultation and government approvals.
How PROXPAT Helps
Partnership or LLC comparison
Activity and licensing authority check
MOA preparation for legal review
Partner documents and attestation
Licensing application and commercial registration
Registrar filing within five business days
Partner changes and withdrawals
Establishment card, visas and renewals
Frequently Asked Questions
Choose the form that fits your partners.
Explore connected PROXPAT services that support the same client journey.
The licence is the start of the government work, not the end of it
Once the trade licence is issued, the sequence that actually lets you operate begins: the establishment card, the MOHRE and immigration files, your employee quota, then employee visas and work permits. After that it repeats every year — renewals, cancellations when people leave, and licence renewal and amendments.
Companies that would rather not build that function in-house put it on a monthly PRO retainer from AED 700, or use it per transaction. Government fees stay separate and itemised either way.
The first six months after incorporation
- Establishment card issued through immigration
- MOHRE file opened and e-signature completed
- Employee quota checked before hiring
- Offer letters, work permits and entry permits
- Medical, Emirates ID and visa stamping
- Corporate tax and VAT registration where they apply
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Set Up Your UAE Partnership
PROXPAT prepares the MOA for legal review, files the licensing and commercial registration, and handles the Registrar filing, visas and later partner changes.