All you should know before forming a General Partnership Company in Dubai

All you should know before forming a General Partnership Company in Dubai

Starting a business in Dubai is a dream for many entrepreneurs. For a long period of time UAE has been helping investors and business owners to launch and expand their businesses. Establishing a business in Dubai has become a very profitable proposition now.

For the past few years, there has been widespread development in the infrastructure of the UAE leading to rapid economic growth. To set up a business in Dubai it is important to first decide on the structure of the business entity whether it will be a Sole Proprietorship, Partnerships, Limited Liability Company (LLC), or a Joint Stock Company. One of them is a General Partnership Firm.

General Partnership In Dubai

A General Partnership is an agreement between two or more partners whereby each of the partners is jointly and severally liable to the extent of their assets for the company’s liabilities. This type of company can be opened by UAE nationals only.

General Partnership Company Formation

Every partner has the right to participate in the management and control of the business. A partnership may dissolve in the event of withdrawal, bankruptcy, insanity, or a partner's death. The partnership may, however, continue if the rest of the partners agree to the same. In that case, a new partnership agreement must be created among the remaining partners who would like to continue and any new partners who will be added.

Starting a business: A guide to company formation in the UAE

1. All the individuals share an equal amount of risk and rewards in the business.
2. Partners are severally responsible in all their money for the company's obligations.
3. The company administration shall be undertaken by all partners unless the company contract or an independent contract assigns the administration to a partner or to a non-partner party.
4. There is no minimum or maximum level of ownership for any partner. Each partner may own any share of the business.
5. Partners have the right to make decisions that affect the business or the business assets.
6. A partnership company can appoint one manager as per the DED business regulations.
7. A general partnership company in Dubai can have more than one branch. Each may undertake one or all of the activities included in the main business license.

General Partnership Company setup in Dubai

For starting a General Partnership Business in Dubai the following step needs to form a general partnership company in Dubai.

A. The foremost thing to keep in mind is the selection of the name of the company.

B. The company name should include all the names of the partners or be limited to one or more partners.

C. The partners must apply to the Registrar through an application for the registration form, duly filled in and signed by each partner. The application must include:-

1. The General Partnership name end with the word ‘Partnership’
2. The registered office address of the General Partnership
3. Nature of business to be conducted

D. Name and address of each of the partners of the General Partnership Firm

E. When the application is submitted, the authority can ask to submit extra information reasonably required for him to determine the application

F. After everything is reviewed, the registrar will approve the application and the person can move forward to start the business.

Documents Required for Establishing a Business  

Below are the Documents needed to start a General partnership Company in Dubai.

1. Passport copies and valid ID proofs of the partners and managers.
2. Certificate of initial approval from the DED.
3. Company name registration certificate.
4. NOC from all the partners.
5. The official address of the company.

Things You Want to Learn Before Starting a Business in Dubai

Pros of Forming a General Partnership company in Dubai

Below are the pros of forming a General partnership company in Dubai.

A General Partnership or formation of a partnership business is easy to establish and the paper works are also easy to maintain. The simplified tax filing is the most important benefit of a general partnership business because no corporate forms or double taxation is required. Each partner files a U.S. Return of Partnership Income. This form dictates the partner’s responsibility for the profits and/or losses of the General Partnership, which are then claimed by the partner on his or her U.S. Individual Income Tax Return.

Cons of forming a General Partnership company in Dubai

Below are the pros of forming a General partnership company in Dubai.

The General Partnership does not have any separate entity from the partners as it lacks corporate structure. This means that the partners are totally unprotected from any litigation against the business, and their assets can be seized at any time to cover the unmet obligations of the business. So if one partner comes to an agreement without informing other partners, then each partner has the right to obligate to the terms of the agreement. Even the same goes for credit. If any partner gets any credit in the business then all the partners would become equally obligated to the terms of that debt.

Conclusion 

Danburite Corporate offers a wide range of highly reliable business management services that can help you understand your business initiatives in Dubai. Our team of consultant experts will guide you in setting up a business in Dubai. If you want to start up your own business then Contact Us. We’ll be happy to help you!