One-person company in Abu Dhabi - FHS Law Firm

    You are currently here!
  • Home
  • Law One-person company in Abu Dhabi

One-person company in Abu Dhabi

What is a one person company in the UAE?

You cannot establish a company unless there is mutual trust with your partners. Otherwise, you’d better set up a company on your own This option was not available according to UAE law before, but after the law allowed the establishment of a one-person company, we found many ambitious and successful businessmen establishing their own companies, that is, consisting of only one partner, providing So: a one person company is a company established by one person

its capital, and being solely responsible for its debts to the extent provided from its capital.

There are many reasons for establishing such companies with one partner, such as:

  • Encouraging investments and preventing any economic activities that take place secretly.
  • Some resort to establishing a company with fictitious partners, because it is not. Their desire to partner with someone, and therefore allowing the establishment of one-person companies was in their interest, to spare them from doing illegal procedures, by bringing in fictitious partners.
  • Encouraging small projects and local industrialists to . Doing their own work and developing it with their personal efforts.

A one-person company is a type of limited liability company

What is the legal article that talks about the one-person company in the UAE law?

Article 71 of the UAE Companies Law issued by Federal Decree Law No. 32 of 2021 stipulates in the second paragraph how to establish a one-person company.

  • Any natural or legal person may establish a company. Limited liability is asking about the company’s liabilities as much The capital he provided
  • The provisions and laws of limited liability companies apply. The one-person company, and it differs in terms of the number of partners. The one-person company is made up of only one partner, while the limited liability company does not have less than two partners, and according to the Companies Law, the partners must not exceed fifty partners.

How to establish a one person company:

We can distinguish two ways to create a one person company.

A person establishes his own one-person company (initiation)

 What is meant by starting?

That is, he provides the company’s capital and is responsible in the event of a loss for an amount equal to the capital he put in it, and thus avoids losing all his money, as he is responsible for the company’s loss only in relation to the capital and has nothing to do with the rest of his money while claiming any loss for the company.

This method is flawed because it causes a problem for legalists, in how to separate the person’s money that he put in the company’s capital, and his other money that has nothing to do with the company, and which can overlap with each other, and here the creditors demand their money from the money of the owner of the company, if it is proven to overlap. With his capital, which he put into the company

The second method: establishing a one-person company

The multi-partner company with limited liability) can turn into a one-person company because the rest of the partners withdraw repeatedly so that only one partner remains, and here There are two possible possibilities, the first possibility is the dissolution of the company, and the second possibility is the continuation of this sole partner in the company, and its conversion from a limited liability company to a one-person company, and this is permitted under the current UAE law.

Is there a minimum capital for a one-person company?

The UAE Companies Law issued by Federal Decree Law No. 32 of 2021 did not stipulate a minimum capital for a limited liability company or a personal company the one

It was stated in Article 76 of this law that:

  • At the time of its incorporation, the company must have sufficient capital. to achieve its purpose.
  • This capital must consist of equal shares. the value
  • The Council of Ministers may, based on the proposal of the competent minister, issue a decision specifying the minimum capital for a company. per person

We can say here that the criterion in determining the capital of companies in general is the nature of their activity. There are companies that require large capital to achieve the purpose for which they were established, such as industrial companies, and there are companies that do not require large capital to carry out their activities, such as financial and electronic services companies.

If you have any question or inquiry about any aspect of the corporate law of all kinds, whether a one-person company, limited liability companies, or any other company from what kind

Do not hesitate to consult the most famous legal consultants, at FHS Legal Consultants, the best law firm in Abu Dhabi

The best lawyer for corporate cases, establishing companies, resolving disputes, cases and settlements in Abu Dhabi

Connect with us

Office No. 402, Al Reem Plaza Tower, Electra Street – Abu Dhabi 025658768 Abeer_Muhammad_Bassam_Tehrani# F_hs_for_legal_consultations#


leave a comment