One of the seven emirates that make up the United Arab Emirates, Dubai is the second largest and is popular with tourists and business people alike. Ideally located at the crossroads of trade and commerce, Dubai can service and access markets that span the Middle East, North and South Africa, the Indian Subcontinent and the CIS. Further more, Dubai is blessed with a time zone that gives it the benefit of connecting the USA and Far East markets. The high-tech infrastructure, air connections and port facilities makes Dubai a well associated city and this controls its strategic position in the UAE

General Partnership

A general partnership firm consists of two or more partners who are jointly and severally responsible for all the firm's liabilities. This type of firm is confined to only UAE nationals because partners are responsible towards the liabilities of the firm to the extent of their assets, which cannot be applied to foreigners.

Partnership in-commendams (Limited Partnership):

A Limited Partnership firm consists of joint partners, who are liable to the extent of their assets, and in-commendams partners who are not responsible for the liabilities of the firm except to the value of his share in the capital. According to the law, all joint partners in such type of firms should be nationals of the U.A.E.

Limited Liability Company:

A Limited Liability Company should have a minimum of two and a maximum of fifty shareholders. Such company shall not conduct the business of insurance, banking or investment of money for others. The total capital amount of a limited company shall not be less than three hundred thousand dirhams divided into equal shares and the value of each share should not be less than thousand dirhams. These shares should not be represented by negotiable instruments.

If a body corporate forms a shareholder in a Limited Liability Company under incorporation, then the capital of the Limited Liability Company should be double the capital of the body corporate.

If non-nationals hold shares in a Limited Liability Company, the U.A.E. nationals should hold shares not less than 51% of the capital (taking into consideration the business activities confined to nationals).

Public Shareholding Company:

Public Shareholding Company is a company with a capital divided into equal negotiable shares. In such companies, the shareholder's liability will be limited to the number of shares held by him. It is provisional that the capital must be sufficient to carry out the objectives of the company; however, it shall not be less than ten million dirham. As such the company may issue negotiable shares, but it shall be subject to control procedure required in this regard.

The incorporation of a public shareholding company involves lengthy and complex procedure detailed by the law. For instance, the shareholders have to prepare memorandum and articles of association, the minimum number of shareholders shall be ten etc. Only after obtaining approval for incorporation by the Department of Economic Development that subscription of the shares may begin. Subscribers shall then be invited to a General Meeting where Board of Directors are elected and declare the incorporation of the company. Following which the promoters shall submit an application to the Minister of Economy and Commerce to declare formally the incorporation of the company, in addition to other procedure.

Private Shareholding Company

Private Shareholding Company is incorporated with a minimum number of three members. Such company cannot invite the public for subscribing in its shares. The shareholders subscribe in full the paid-up capital which should not be less than one million dirham. All provisions of the public shareholding company including the aforementioned shall apply to the private shareholding company. The incorporation of the company also shall be in accordance with the procedure and conditions followed for the public shareholding company except for the public subscription of its shares.

Partnership Limited by Shares:

Partnership Limited by Shares is a firm which consists of partners, who are jointly & severally responsible for all the liabilities of the company, and shareholding partners, who are not liable for the liabilities of the company except to the extent of pro rata of their subscribed shares in the capital. The following provisions along with the provisions applicable for the incorporation of pubic shareholding company apply to the partnership limited by shares are taken into consideration

• A partnership deed has to be signed between all the joint and several partners and other founding shareholding partners of the firm, which shall be considered, as for their liability.
• The name, title, nationality and country of origin of the joint and several partners has to be mentioned in the memorandum and article of association.
• The capital of the company should not be less than Dhs. 500,000

The Joint Venture (Consortium Company)

A Joint Venture is a partnership made between two or more partners who share the profit and loss of the business conducted by one (or more) of the partners in his own name. The firm shall be confined to the relationship between the partners and it shall not apply to third parties. A Joint Venture is not inscribed in the Commercial Register, and its incorporation deed is not published or declared.

In fact, a Consortium Company or a Joint Venture is a concealed company confined to the relationship between the partners for the execution of specific projects in the name of one partner (e.g. one partner will be the owner of the license while the other partner undertakes the management of the company). No special license will be issued in the name of the company, but the license can belong to the original partner for the execution of the project with the association of the other partner who participates in the running of the company. Although the name of the company is not entered in the Commercial Register and not declared to the public, the Joint Venture operates as per proper agreement legally binding to the concerned partners and may be attested before the Notary Public.

Professional Companies

A professional firm is an agreement made between two or more people who concur to serve each other against a consideration as to whether they are equal or unequal in distributing the work, provided that the works are unified or carried out concurrently. Therefore, a professional company is any firm which practice a profession as its main objective and the partners rely for their livelihood on this intellectual effort they exercise more than on profiting from the business.

On this basis, the professional companies are set up between professionals or partisans who carry out non-commercial activities. Federal Law No. 18 of 1993 in respect of issuing the Commercial Transactions Code expressly stipulates in article (15) that "The word 'Merchant' is not applicable to Ministries, Government Departments, Public Institutions, Corporations, Public Benefit Organizations, Societies, Clubs and Professionals who carry out non-commercial activities. However, any kind of commercial activities conducted by the above parties shall be subject to the provisions of this law unless those specifically stipulated to be exempted".

Activities permitted to be practiced by professional firms

Firms that are registered as professional companies or firms which practice only specific activities and not extend that to commercial business render the following services:

Legal practice and consultancy, auditing, organizing and keeping accounting records and books, civil engineering and architecture consultancies and services, managerial and economic consultancies and studies, technical services, medical and curative services, educational services and other similar services.

Provisions Regulating the Activities of Professional Companies or Firms

Each partner of a Professional firm is bound to perform the work which he has accepted and undertook, and each partner has the right to collect the fee agreed upon and the owner of the work is relieved of his liability after the payment to the partners. If the partner is unable to carry out the work which he has agreed to do by himself, he may assign the same to his partner or anybody other than the partners, unless the owner of the work has made it conditional that the task may not be delegated. Otherwise, Delegates Non Potest Delegare is inapplicable.

The profit shall be distributed between the partners in the manner agreed upon. It is possible that the distribution of profits be unequal even if it was conditional that the work shall be carried out equally, and each of them shall be entitled to his share of profit even if he did not work, but for an acceptable excuse.

A professional company or firm can also be registered on the basis that the premises are provided by some partners, the machines and tools are provided by other partners and the work is carried out by some other partners. In such cases, the partners are jointly responsible for executing the work.