Understanding Limited Liability Company

To start an own company is a dream of every individual, there should be a strong will and hardworking mentality by the Entrepreneur to make the dream alive. There are different kind of business you can start with, the best among is to start a Limited Liability Company (LLC).

What is a Limited Liability Company?

It is a very common form of business entity formed for business activities. A Limited Liability Company can be formed by a minimum of two partners and the maximum number should not be more than 50. The liability of each person is limited to the number of shares owned by him in the total share capital of the company.

There should be a minimum of 51% equity participation by local partners.

Another main thing related to LLC is that the name of the Company should reflect its purpose and the phrase “LLC” shall be added to the name of the entity. The shares of LLC are not opened for public subscription.  As per the commercial companies Law LLCs may be licensed to engage for a number of activities except for banking, insurance and business investments in others’ name. The profit or loss generating out of the business will be shared equally between the share holders as per their share holding pattern in the company.

Process of starting a LLC Company:

–          The first step is to obtain an initial approval for name and the activity you are going to start from the Economic Department.

–          Prepare the MOA and get it approved from the notary public.

–          Obtain an office tenancy in a commercial building and have it attested by RERA

–          After fixing out tenancy, submit applications and initial approval along with copy of MOA, tenancy contract etc. to Economic Department.

–          After verifying all the documents by legal department, the name of the company will be entered in the commercial register and the MOA will be published in the Ministry of Economy Bulletin.

Then the Economic Department will issue the license.

–          After getting the License then register the Company with Ministry of Labor and Department of Immigration.

What are the costs involved to set up a LLC?

–          The initial approval fee is AED110

–          The trade name reservation is AED 210

–          Activities Fee+ the market fees (5%) + other entities fees.


The major chunk of the business enterprise in UAE happens to be LLC because of the ease of operation model of LLC. The cost factor and the easiness in starting the business makes LLC type of company a major attraction for the budding entrepreneurs in UAE.


For more guidance, you may always feel free to get in touch at Emirates Chartered Accountants Group, Dubai. Send us a mail at info@emiratesca.com and we shall be happy to answer you at the earliest.

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