Some people are confused with the concepts and regulations of commercial companies and the differences between a Sole Proprietorship Company and a One Person Company. The One Person Company is a company with limited liability in its capital and does not extend to the personal capital of its founder. It is established by only one person and shares characteristics with financial companies, meaning that the owner of the capital is liable only up to the capital stated in the Memorandum of Association.
The United Arab Emirates has legislated and regulated through Cabinet Resolution No. 66 of 2022, the terms and management of a One Person Companies, where the legislator allows the creation of this type of company only in the form of a private joint-stock company or a limited liability company.
The procedure to establish a One Person Company varies depending on whether it takes the form of a private joint-stock company or a limited liability company. The UAE legislator, through this resolution, has defined all the necessary procedures for establishing a Single Person Company
Any person, whether normal or juridical, is permitted to establish the One Person Company and own its entire capital as a sole shareholder. This legislation was enacted to encourage individuals and very small projects and entrepreneurial ventures to establish companies that provide them with opportunities to obtain financing from various sources and ensure their continuity and growth. They can benefit from incentives and guarantees granted by the law to other investment companies, which are considered limited liability companies.
We at ILS CONSULTANCY, with our specialized legal and consulting team in the laws and regulations of commercial companies in the UAE, are ready to assist and support all investors within or outside the UAE in establishing the One Person Company and provide them with legal advice and guidance to ensure their sustainability and progress in the business world.
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