Limited Liability Company (LLC)

A Limited Liability company is a Company that consists not less than (2) two and not more than (50) fifty number of partners, and each of them shall only be liable only to the extent of his share in the capital. Requirement according to which 51% of the shares should be owned by UAE national was reived and excluded in the new Commercial Companies Law No.32 of 2021, thus, now foreigners can own 100% of shares of Limited Liability company. Also, the new Commercial Companies Law allows for one physical or legal entity to incorporate and own a Limited Liability company. In this case the sole owner also shall be liable only for the obligations of the company to the extent of the capital set out in its Memorandum of Association.

 

The UAE Companies Law doesn’t specify a minimum share capital for a Limited Liability Company (LLC). Instead, the LLC is expected to possess sufficient share capital to fulfil its intended purpose. The determination of this adequate capital is left to the discretion of the LLC’s shareholders, as there are no explicit guidelines or decisions outlining the required level of sufficiency or establishing a minimum share capital.

 

For practical purposes, it is common for a notary public to accept a minimum share capital of AED 100,000, divided into equal shares, each valued at a minimum of AED 1,000 for an LLC in Dubai. Importantly, public subscription for shares is not allowed, and the entire share capital must be fully paid up.

 

The company shall obtain all the approvals and licences required for the activity to be conducted by the company in the State before commencing to practice its activity.

 

An LLC is largely formed to carry out commercial business activities. Commercial business activities are defined in the Article 5 – 6 of the UAE Federal Decree-Law No. 50/2022 Issuing the Commercial Transactions Law Commercial Code and include the activities such as trading, import-export, real estate development, brokerage, facilities management, construction, manufacturing and others. LLC can also be formed to conduct certain professional activities such as restaurant, cafeteria, and some other activities professional in nature but categorized as commercial.

 

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