Matters related to limited liability companies
Dubai Economy clarified that the Limited Liability Company is the company in which the number of partners may not exceed 50 partners nor less than two, and each of them is only liable to the extent of his share in the capital, and the shares of the partners in it are not represented by negotiable instruments.
It showed the most important matters related to this type of company as follows:
With the exception of insurance and banking businesses, the Limited Liability Company has the right to engage in any legitimate activity.
■ The company may not resort to public subscription to form its capital, increase it, or obtain the necessary loans for it, nor may it issue shares or negotiable bonds.
■ The company shall have sufficient capital to achieve the purpose of its incorporation, which shall be determined by the partners in it and shall consist of equal shares, and the shares shall be indivisible.
■ Profits and losses shall be distributed equally among the shares, unless the contract stipulates otherwise.
■ Each partner's share passes to his heirs, and the testator's ruling shall be the rule of the heir.
■ A limited liability company shall be managed by one or more managers chosen from among the partners or from others, provided that their number does not exceed 11.
■ Managers are appointed in the articles of association of the company or in an independent contract for a specific period or without specifying a period.
■ Unless the company’s articles of incorporation specifies the authority of the director, the company’s manager has full authority in his management, and his actions are binding on the company, provided that they are accompanied by a statement of the capacity in which he deals.
The Dubai Economy added that the category eligible to establish a limited liability company includes:
Nationals of the United Arab Emirates and the Gulf Cooperation Council countries.
■ Citizens of other countries may establish a limited liability company to practice one of the commercial, industrial, or some professional or tourist activities, provided there is one or more partners who are citizens of the Emirates, whose share is not less than 51% of the capital.