The UAE presents a dynamic and flexible business environment, offering a variety of opportunities for entrepreneurs to establish their businesses based on individual needs. Every company in the UAE operates under a specific trade license, which can be adjusted to accommodate changing requirements.
The process of adding or removing partners/shareholders from a business license in Dubai is commonly carried out by companies undergoing structural changes. However, this process requires the full consent of all partners involved before the modifications can take place.
In this blog, we explain all the necessary steps to add or remove partners from your trade license in Dubai. From selecting new partners or eliminating an existing one to navigating approvals and license updates, DMC’s business setup experts will ensure a smooth and hassle-free process.
How Do You Add a Partner/Shareholder to a Trade License in Dubai?
Adding a partner to your trade license is an easy process, which can be done by following the steps mentioned below:
1. Board/Shareholder Resolution: If a director doesn’t have the authority to approve a share transfer, the members must pass a resolution either granting that authority or allowing the transfer for that specific case.
2. Shareholder Agreement: A shareholder agreement is essential for defining the roles and responsibilities of each partner. It should consider key aspects like capital contributions, profit distribution, decision-making authority, and how to resolve any conflicts. For a legally binding and comprehensive agreement, it’s advisable to seek guidance from business setup experts in Dubai.
3. New Partner’s Documentation: When adding new partners to your business trade license, it’s essential to ensure all required documentation is submitted accurately. This may include personal identification documents, relevant approvals, and any necessary legal clearances, especially if the new partner is either an individual or another company.
4. Application Submission: Once all the required documents are collected, the next step is to complete the application form, and shareholder agreement, and include your new partner’s documents. These can be submitted online via the DED portal or in person at a service center. Make sure to verify that all documents are correct and meet DED standards for a timely process.
5. Fees & Approvals: After submitting your documents and application, you’ll need to pay the required fees, which vary depending on your business type and the number of new partners. The DED will then review and verify your application before approval. The processing time can differ, as it may depend on the specific details of the trade license and partners involved.
6. Addendum/Amendment to the MOA: Changing the ownership composition of your company involves revising the Memorandum of Association (MOA). This ensures the updated partnership or shareholder structure is legally recognized and aligned with Dubai’s regulatory standards.
7. Licensing and Registration: After the approval of your application, you’ll receive an updated trade license with your new partners listed. It’s important to inform the relevant government and tax authorities about the changes to ensure compliance and avoid any operational issues.
Documents Required to Add a New Partner/Shareholders to the Dubai Trade License
To successfully add new partners or shareholders to your trade license in Dubai, several essential documents are required. Below is a list of the necessary paperwork for both new and existing shareholders:
• MOA and Trade License: These documents are essential for adding shareholders or partners to a trade license in Dubai. The Memorandum of Association (MOA) outlines the company’s structure, while the trade license verifies the company’s legal operation within Dubai.
• Power of Attorney (POA): A notarized POA is required if a shareholder is appointing a representative to act on their behalf during the process of adding partners or shareholders to the trade license in Dubai.
• DED Approval Receipt: This document serves as proof that the Department of Economic Development (DED) has approved the request to add a shareholder or partner to the trade license.
• Passport Copy: For both new and current shareholders UAE Entry Stamp, Entry Permit, or UAE Residency Visa Copy – For both new and current shareholders (must be from the last 5 years).
• Visa & Emirates ID: Residents need to provide their Emirates ID and Visa copies, while non-residents should submit their passports. The DED might request entry stamps or an older visa as proof of your visit to the UAE.
How to Remove Partners/Shareholders from a Trade License in Dubai?
There are two ways to remove partners/shareholders from a trade license in Dubai.
1. Mutual Agreement: The removal of a shareholder requires full consent from all shareholders, which is documented through a signed agreement or a board of resolution.
The process for removing a shareholder from a trade license in Dubai by mutual consent includes the following steps:
All shareholders must mutually agree to remove a shareholder. This is typically done through a signed shareholders’ agreement or a resolution passed by the board of directors.
The company is required to apply to the Dubai Economy for the shareholder’s removal from the trade license. The application must include:
• A copy of the shareholders’ agreement or board resolution
• The shareholder’s passport or Emirates ID copy
• A copy of the shareholder’s share certificate
Once the Dubai Economy reviews and approves the application, a new trade license will be issued reflecting the updated shareholder details.
2. By Court Order: When a shareholder disagrees with their removal, the matter can be escalated to court. The court will review the evidence presented and determine the appropriate course of action.
Below are the steps to remove a shareholder from a trade license in Dubai through a court order:
1. The process of removing a shareholder begins with filing a case in the Dubai Court of First Instance.
2. The court will send a summons to the shareholder being removed, requiring their presence in court to respond to the case.
3. The court will review the case and deliver a verdict, which may include ordering the removal of the shareholder from the trade license.
4. A new trade license will be issued to the company, excluding the removed shareholder’s name.
DMC's Expert Assistance in Adding or Removing Partners/Shareholders
Adding or removing partners from your trade license in Dubai involves detailed procedures that require expert support. Decision Management Consultants is your go-to business setup partner, offering end-to-end services to help you manage the transition smoothly while adhering to regulatory requirements.
We manage the complete business setup process, taking care of everything from document preparation to submitting applications, while ensuring compliance with all DED requirements. With DMC’s expert assistance, you can rest assured that your setup will be smooth and penalty-free.
Reach us at +971 42624023 or enquire on WhatsApp for more information related to adding or removing partners/shareholders from your Dubai trade license.
Frequently Asked Questions
Can a Partner Be Removed from a Trade License Without Any Consent?
A partner cannot be removed without their agreement. All partners must agree to the removal, and once consent is obtained, the Department of Economic Development (DED) must be notified to proceed with the removal process.
How long does it take to add or remove a partner from a trade license in Dubai?
The time frame for adding or removing a partner from a trade license depends on several factors, including the complexity of the case and the preparation of the required documents. Typically, the process can range from a few days to a couple of weeks, as long as there are no complications.
Can I add a foreign partner to my trade license in Dubai?
Yes, a foreign partner can be added to your trade license in Dubai. The steps are similar to those for adding a local partner, including revising the Memorandum of Association (MoA) and securing approvals from the Department of Economic Development (DED). Make sure the foreign partner fulfills all the legal criteria for business ownership in Dubai.
Yes, a foreign partner can be added to your trade license in Dubai. The steps are similar to those for adding a local partner, including revising the Memorandum of Association (MoA) and securing approvals from the Department of Economic Development (DED). Make sure the foreign partner fulfills all the legal criteria for business ownership in Dubai.
How to remove a partner from an LLC in Dubai?
The removal of a partner typically requires their consent, and all partners must mutually agree to proceed with the process. Once an agreement has been reached, it is essential to inform the Department of Economic Development (DED) about the partner’s decision to exit the business and begin the necessary steps.
