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1. HOME ABOUT US WHAT WE DO NEWS & ARTICLES CONTACT US All Posts business consultancy tncconsultantsdxb Feb 23, 2023 3 min read Limited Partnership Company in UAE A limited partnership is a legal entity, which comprises one or more active partners who contract one or more other limited partners to do an economic activity, this form of partnership is called limited partnership. Status of partners in limited partnership company In this form of the partnership contract, the active partner is considered a trader with his joint and personal liability for the company obligations while the limited partner is liable for company obligations extent of the share in the capital and has no capacity of trader. Who can be a limited partner in a company? Any natural or legal person may be a limited partner in a limited partnership company. Which activities can be performed in a limited partnership Company? All the industrial, commercial and professional activities can be practised under the umbrella of a limited partnership company. Memorandum of Association in Limited Partnership Company The MOA of a limited partnership shall contain all the details about the business, partners, purpose, managers capital of the company, share division and incidental and intended rights and duties of partners in a limited partnership company albeit it is pertinent to mention here, in the MOA of the limited partnership company, the name of limited and active partners shall be mentioned specifically. Otherwise, all the partners of limited partners are treated as active partners in the company. Management of Limited Partnership Company The management of the company shall rest with active partners and decisions shall be taken by unanimous consent of the partners or by majority votes if provided in the MOA of the company. Any substantial change in the company’s activity and MOA need the consent of all active and limited partners. Rights of Active Partners And Company’s liability in Limited Partnership Company The active partners shall observe all the rights, restrictions and liabilities which they actually have in a general partnership and any loan or any other obligation availed by the active partner for the company shall be binding upon the limited liability company. Rights and liabilities of Silent/Limited Partner in Limited Partnership Company The silent partner has the same rights as the active partner in the following conditions The silent partner can enter into transactions and lend money to the company with the consent of all active or limited partners. Although he cannot manage the company’s business yet he can inspect all the records and accounts of the limited partnership company as an active partner can do in the business, to get accurate and complete information about the business. But he can inspect the record during the working hours of the company only. It is pertinent to mention here the silent partners’ participation in the internal business affairs of the company shall not make them liable to the third person for the company’s debt jointly.

2. Restriction on the limited/Silent partner 1. The silent partner cannot interfere in the company’s management work related to a third person but he may check and verify the company’s accounts personally or through his representative from partners and a third person. But his act must not cause damage to the company. 2. The silent partner cannot assign his share, wholly or partly, to a third person in the limited partnership company except with the consent of all the partners or as well as it is stipulated in the MOA of the limited partnership company. The assignee shall be deemed the silent partner upon the ‘registration and notification of the assignment with the registrar. Silent Partner’s liability in the case of violations of terms of Limited partnership Company If any damage incurs to the company in the aftermath of the silent partner’s prohibited act he shall be liable with all his funds for ramifications arising from that prohibition. The silent shall be held liable with all his funds for the obligations of the company if he exercises the management work of the company and third parties assume that he is an active partner of the company. If the limited partner either with the express or implied consent of active partners performs the management work of the limited partnership company these partners shall jointly liable for the obligations arising from that work. 1,893 views 0 comments 2 Recent Posts See All Setting Up business in Mainland of United Arab Emirates General Partnership Company’s Management Partners of General Partnership Company Status of partners in General Partnership Company All active partners are considered traders in a general partnership and an… The companies require legal sanctity before doing business in United Arab Emirates. For conventional businesses in UAE… Appointment of manager in General Partnership Company As a general rule, the partners of the general partnership company a… 2 2 2 738 0 345 0 331 0 Comments Write a comment... CHAT WITH US © 2021 by TNC Management Consultants. Proudly designed by Luxe Agency