Limited Partnership Contract Template for the United Arab Emirates

A Limited Partnership Contract is a specialized legal agreement that establishes a business partnership in the United Arab Emirates where partners have different levels of liability and involvement. Under the UAE Commercial Companies Law, this structure allows you to create a partnership with both general partners who manage operations and bear unlimited liability, and limited partners who contribute capital but have restricted liability exposure.

When do you need this document?

You need a Limited Partnership Contract when establishing a business where some partners want to invest capital without taking on management responsibilities or unlimited liability. This structure is particularly valuable in family businesses where some members contribute funds while others handle operations, professional services firms seeking passive investors, or investment ventures requiring clear separation between active and passive participants. The contract is also essential when you want to attract external funding while maintaining operational control, or when structuring joint ventures where parties have different risk tolerances and involvement levels.

Key legal considerations

The contract must clearly distinguish between general and limited partners, with general partners assuming unlimited liability and management authority while limited partners face liability only up to their capital contribution. You must specify each partner's capital contributions, whether in cash, assets, or services, and establish detailed profit and loss sharing arrangements. Management structure requires careful definition, including decision-making authority, voting rights, and operational responsibilities. The agreement should address partner withdrawal procedures, transfer restrictions on partnership interests, and dissolution terms. Anti-money laundering compliance is crucial, requiring proper due diligence on all partners and beneficial owners. You must also consider economic substance regulations if the partnership conducts relevant activities, ensuring adequate physical presence and operations in the UAE.

Legal requirements in United Arab Emirates

Under the UAE Commercial Companies Law (Federal Law No. 2 of 2015), limited partnerships must have at least one general partner with unlimited liability and one limited partner. The partnership requires registration with the relevant commercial registry and must maintain a registered office in the UAE. Partnership capital must be clearly defined and documented, with limited partners' contributions fully paid before registration. The partnership name must include "Limited Partnership" or its Arabic equivalent and cannot include limited partners' names. You must comply with economic substance regulations if conducting relevant activities, demonstrating adequate employees, premises, and core income-generating activities in the UAE. The partnership must maintain proper accounting records and file annual returns with authorities. All partners must undergo anti-money laundering verification procedures, and foreign partners may require additional approvals depending on the business activities and ownership structure.