Partnership agreement in the UAE: Template, Key Clauses and Local Law (2026)

What a partnership is under UAE law In the United Arab Emirates, a partnership is a business shared by two or more partners. The main forms on the mainland are: - General partnership (joint partnership): two or more partners who are jointly and severally liable in all their personal assets for the company's obligations. It is governed by the Commercial Companies Law.

• Limited partnership: like a general partnership but with one or more limited partners whose liability is capped at their contribution, provided they do not manage.
• Civil company: a professional partnership for licensed professionals such as doctors, engineers, lawyers, auditors and consultants, who practise together. Its focus is professional services rather than trade, and it is formed under civil law and licensed by the relevant emirate's authority. The right form depends on what you do. Traders usually look at a general or limited partnership (or more often a limited liability company); professionals usually use a civil company. ## What UAE law requires The Commercial Companies Law is the framework. Commercial companies, including general and limited partnerships, are principally governed by Federal Decree-Law No. 32 of 2021 on Commercial Companies, as amended. It covers management, partners, managers' responsibilities, accounts, transfers of interest and dissolution. Always read the current official text, because the law has been amended. Note too that the UAE updated its civil transactions framework with later legislation, so a civil company and partner-to-partner matters should be checked against current law. A written, usually notarised, constitutive contract is expected. A partnership is set up by a constitutive contract (the memorandum or partnership deed) between the partners, which in practice is notarised and forms the basis of the trade licence application. The deed sets the partners, their contributions, profit and loss shares, management and the firm name. A trade licence is required from the emirate's authority. A mainland partnership must obtain a commercial or professional licence from the Department of Economic Development (DED) of the emirate in which it operates (for example, Abu Dhabi's ADDED). Each emirate has minor variations in process and documents. The business also registers with the relevant authorities for tax, including UAE corporate tax and, where applicable, VAT. Foreign ownership was liberalised in 2021. Reforms to the Commercial Companies Law removed the general requirement for 51 percent UAE national ownership of an onshore company for most activities, with restrictions kept only for certain strategic sectors. For a civil company, expatriate professionals can generally own 100 percent, though a local service agent may be used. Confirm the current rule for your specific activity and emirate, as eligibility can vary and some sources conflict. Free zones are a separate track. Each free zone has its own registrar and rules, and offers its own partnership or company forms. If you set up in a free zone, follow that zone's framework rather than the mainland DED process. ## The clauses that differ under UAE law - Liability: in a general partnership, partners are jointly and severally liable with all their personal assets, so the deed must be clear about internal profit and loss shares.
• Management: management can rest with all partners, named partners, or a manager who need not be a partner; state this expressly.
• Transfer of interest: a partner's interest can usually be assigned only with the consent of all partners, subject to the deed. Build the consent rule and any pre-emption rights in.
• Firm name: a general partnership's name is typically based on the partners' names; follow the naming rules of the emirate.
• Nationality and ownership: record each partner's status and confirm the activity is open to the intended ownership structure. ## A usable template (adapt with advice) This is a skeleton for a general partnership deed. Replace every [bracketed] field. It is not legal advice. ``` PARTNERSHIP DEED (GENERAL PARTNERSHIP) 1. Parties: [full name, nationality, passport/Emirates ID, address of each partner].

2. Name and form: The partnership trades as [firm name] and is a general partnership under the Commercial Companies Law.
3. Licensed activity: [describe], under licence from [the relevant emirate DED].
4. Registered address: [address, emirate].
5. Term: It begins on [date] and runs [indefinitely / until date].
6. Capital and contributions: Total capital AED [amount]; [Partner A] contributes AED [amount] / [asset]; [Partner B] contributes [...].
7. Profit and loss: Shared [ratio], irrespective of capital [or in proportion to capital].
8. Management: The partnership is managed by [all partners / named partner(s) / an appointed manager], with authority to [scope]; decisions above AED [amount] require [unanimity / a majority].
9. Partners' decisions: Ordinary matters by [majority]; the following need unanimity: admitting or removing a partner, transferring an interest, changing the activity, [others].
10. Transfer of interest: A partner may assign its interest only with the written consent of all partners; remaining partners have a right of first refusal.
11. Liability: The partners are jointly and severally liable with all their personal assets for the partnership's obligations.
12. Withdrawal, death, incapacity: On these events, the partnership [continues] among the remaining partners, who settle the leaving partner under clause 13.
13. Settlement: The departing interest is valued at [method] and paid over [period].
14. Accounts: Kept per UAE law; audited where required; corporate tax and VAT obligations met.
15. Dispute resolution: [mediation, then the competent UAE court / arbitration seated in the UAE].
16. Governing law: The laws of the UAE and the Emirate of [emirate]. Signed and notarised by all partners at [place] on [date].

- **Clause 8 (management)**: UAE law allows management by all partners, named partners or an outside manager. Set it clearly, with a value threshold above which decisions need wider agreement.
- **Clause 10 (transfer of interest)**: an interest can usually be transferred only with all partners' consent. Add a right of first refusal so a partner cannot be forced into business with a stranger.
- **Clause 12 and 13 (continuation and settlement)**: provide for a partner leaving, dying or losing capacity, and set a valuation method so the payout is not a fresh dispute. ## Red flags - Choosing a general partnership without the partners grasping joint and several personal liability.
- Assuming 100 percent foreign ownership is available without checking the activity and emirate rules.
- Mixing up mainland and free-zone requirements, which follow different registrars.
- No notarised constitutive contract behind the trade licence.
- Silence on transfer of interest, exit, death or valuation.
- Overlooking UAE corporate tax and, where applicable, VAT registration. ## One workspace for the deed and everything after it A partnership deed is only the start in the UAE. The trade licence has to be renewed, a partner wants to transfer an interest and the consent rule has to be applied, corporate tax and VAT filings fall due, a new partner joins and the deed must be amended and re-notarised. Normally the deed sits in one folder, the licence in another, and the obligations in a partner's memory. When a question arises, nobody can find the clause. This is what an AI contract workspace is for: drafting the deed, reading it back in plain language, tracking the renewals and filings that flow from it, and keeping every version tied to the partners. [Adira](https://adiralaw.com) is built around Indian corporate law first, and depth for the UAE is on its roadmap rather than live today, so a UAE partnership still needs a UAE lawyer and the relevant emirate's licensing authority. The idea worth keeping is modest: the deed and the work that follows it belong in one place, not scattered across folders and memory. This guide is general information, not legal advice. Confirm the current position with a UAE lawyer and the relevant emirate's authority before you sign.