Starting a business in the UAE involves many decisions, including choosing between private limited company registration and limited company registration as two popular registration types for entrepreneurs. We will explore their differences here in this blog post.
Registration of Private Limited Companies in UAE
Private limited companies (PLCs) are an increasingly popular business structure used by entrepreneurs in the UAE. A private limited company provides limited liability protection to its shareholders, ensuring their personal assets do not become vulnerable in case the company encounters financial difficulty or legal trouble.
One key difference between a private limited company and other forms of company registration is that its shareholders are limited to no more than 50. Furthermore, its shares cannot be publicly traded. Furthermore, such a company has its own separate legal identity which allows it to enter contracts, acquire assets, sue or be sued independently from its shareholders.
Registration of Limited Companies in UAE
A limited company, on the other hand, is a type of business structure which offers limited liability protection to its shareholders. Although similar to private limited companies in many respects, limited companies differ significantly by being open and accessible for public investment as they can have any number of shareholders and issue public shares.
One key difference between a private limited company and a limited company lies in their shareholders being held personally liable for debts and liabilities of a limited company, due to having its own legal identity distinct from those who share its shares, similar to a private limited company.
LLC Companies in the UAE
A popular business structure in the UAE is the limited liability company (LLC). An LLC offers all the advantages of both corporations and partnerships while still giving members control over the day-to-day operations of their business.
An LLC Companies in UAE must include between two and 50 shareholders; their shares cannot be publicly traded. Furthermore, at least one director and manager must be appointed – these positions may even be filled by one person. One additional benefit of an LLC in this jurisdiction is being able to take advantage of one of UAE’s free zones that offer tax breaks as well as other advantages to businesses.
Deciding upon the appropriate company registration type for your business is an important decision that requires careful thought. Though the private limited company and limited company registration share many similarities, each offers distinct advantages and disadvantages which entrepreneurs must understand prior to making their selection. LLC registration in UAE also comes with its own advantages and disadvantages that should be carefully considered before making your choice. For additional help deciding between these forms of company registrations, it would be beneficial to consult an expert such as Emirates Advocates and Legal Consultants for advice.