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Partnership Limited with Shares Abu Dhabi

Article (256) of Federal Law No. (B) of 1984 defined a partnership limited with shares as being the company formed of general partners who are jointly liable to the extent of all their assets for the company liabilities, and participating partners who are only liable to the extent of their shares in the capital, whereas all
general partners should be holders of the UAE nationality.

Accordingly, this type of company is considered a general partnership for all general partners, because they will be liable up to the extent of all their assets for the company obligations. However, the general partner in such type is considered a merchant even if he did not have such capacity before joining the company.

The capital of a partnership limited with shares should not be less than (Dhs 500,000) divided into equal value negotiable shares. However, the provisions concerning shares in the public joint stock company type should be applicable to those of a partnership limited with shares whose name must, also be formed of the name(s) of one or more general partner(s), whereas an innovated addition derived from the company purpose may be introduced to the original name.

This means, that the name of a participating partner may not be mentioned in the company name. If it so happens with the knowledge of such a participating partner, he will be considered a general partner vis-à-vis any bona tide third party.

In all cases, the term's partnership limited with shares " should be added to the company name, and the provisions concerning the incorporation of a joint stock company shall be effective in the case of a partnership limited with shares, with consideration to the following:
 
1- All general partners and other incorporates should sign the company memorandum and articles, whereas they all must be considered as incorporates of a public joint stock company as far as liability for the company obligations is concerned.
 
   
2- The names; surnames; nationalities and domiciles of all general partners should be mentioned in both the company memorandum and articles.

On another scale, the law provided that the company management should be entrusted to one or more general partner(s). The company memorandum and articles should provide for the names and powers of those to whom management is entrusted.

The law also prohibited a participating partner from interference in the company management operations involving any third party, even if such interference has occurred upon authorization. However, a participating partner may take part in internal management functions within the limits specified in the company articles.

If a participating partner acts in contravention to such prohibition, he should be liable to the extent that absorbs all his assets for the obligations incurred by what management functions he has performed. In case such functions were performed upon an authorization by general partners, those who issued such authorization will be liable for the obligations incurred by his actions.

The law also provided that a partnership limited with shares must have a supervisory board formed of, at least three members to be appointed by the general assembly from among participating members or other third parties. The board's term in office should last for one year, renewable in accordance with the provisions provided in the company articles. The general partners may not have a vote for the appointment of the supervisory board.

A partnership limited with shares should, also have a general assembly comprising all shareholders, and should be subject to the provisions made on the general assemblies of public joint stock companies.

According to the law, the general assembly of a partnership limited with shares may not take decisions involving any third party unless upon approval by the company managers.