Add Or Remove Partners

Adding or removing partners in a Mainland business setup in the UAE involves specific legal and procedural steps, as regulated by the Department of Economic Development (DED) and other relevant authorities. Here’s a detailed guide:

Steps to Add a Partner:

Amend the Memorandum of Association (MoA):

1. • Modify the MoA of the company to include the new partner’s name and their shareholding percentage.
   • This requires the consent of all existing partners.

Draft the New Shareholding Agreement:

1. • Outline the new distribution of shares among partners.
   • Ensure this document is signed by all existing and new partners.

Obtain Necessary Approvals:

1. • Submit the updated MoA and shareholding agreement to the DED for approval.
   • Additional approvals may be needed if your business operates in specific sectors.

Payment of Capital Contribution:

1. • The new partner must contribute the agreed capital amount (if applicable).

Notarization:

1. • Visit a Notary Public with all partners to notarize the amended MoA.

Apply for a Trade License Amendment:

1. • Submit an application to amend the company’s trade license to reflect the new partner and shareholding structure.
   • Provide the following documents:
     • Amended MoA
     • Passport copies of all partners (new and existing)
     • Emirates IDs of UAE residents
     • Copy of the trade license
     • Ejari (tenancy contract for the business premises)
     • NOC (No Objection Certificate) for the new partner (if they are employed in the UAE).

Pay Fees:

1. • Pay the applicable fees for the trade license amendment and partner addition.

Receive the Updated Trade License:

• • Once approved, the DED will issue the updated trade license reflecting the new partner’s details.

Steps to Remove a Partner:

Amend the MoA:

1. • Update the MoA to reflect the removal of the partner and redistribution of their shares.
   • All partners must consent to the amendment.

Buyout Agreement:

1. • Draft a buyout agreement if the departing partner is selling their shares to another partner or a new investor.
   • This agreement must specify the terms of the sale and be signed by all parties.

Obtain Necessary Approvals:

1. • Submit the updated MoA and buyout agreement to the DED for approval.
   • Additional approvals may be required depending on the business activity.

Notarization:

1. • All partners must visit a Notary Public to notarize the amended MoA.

Pay Fees:

1. • Pay the applicable fees for the trade license amendment and partner removal.

Receive the Updated Trade License:

• • The DED will issue the updated trade license without the departing partner’s details.