Agreement Drafting Dubai
Draft Partnership Agreement in UAE – Dubai, RAK, Abu Dhabi, Ajman, Sharjah
A Partnership Agreement is a formal legal document. It defines how two or more persons or firms work together in the UAE. It often forms a part of the Memorandum of Association (MoA). The agreement provides how your business partnership will be run, how the profits will be distributed and how to resolve a dispute between the partners (if they arise). The UAE partnership agreement must be written and notarized for most types of mainland businesses as per UAE Federal Decree Law No. 32 of 2021 on Commercial Companies.
At HHS Lawyers, our Drafting services include:
- Drafting Partnership Agreements as per the UAE Commercial Companies Law which best suits the circumstances of your business.
- Revising and modifying the existing agreements following changes in the ownership and management.
- Giving you the legal advice on the appropriate legal structure of your business such as LLC and General Partnership.
- Facilitating the notarization before the UAE Public Notary as well as all the Economic Departments.
- Planning exit strategies, sharing the profit ratio and drafting clauses that ensure dispute resolution for protecting your rights.
What Is a Partnership Agreement?
A Partnership Agreement in the UAE is a legally binding contract between partners who agrees to share in capital, skills and/or assets for a common project with the expectation of sharing in the profits and losses.
It is simply referred to as a Memorandum of Association (MoA) for Limited Liability Companies (LLCs). And, it is essentially the “rulebook” that governs how the company is run and the interactions between the partners. In the UAE, a Partnership Agreement is a legally binding contract that provides the terms, responsibilities, and profit-sharing structure between two or more parties.
Importance of Drafting a Partnership Agreement Properly
A Partnership Agreement is primarily needed to provide certainty and legal protection of all parties involved:
- Compliance: For issuance of a trade license the UAE Ministry of Economy and local DEDs require notarized agreement.
- Prevention of Conflict: By laying down clearly the roles, voting powers and the division of profit this agreement avoid future conflicts between partners.
- Liability: Whether a partner has “limited” (personal assets are protected) or “unlimited” liability is stated in the agreement. This is a key for controlling financial risk.
- Continuity: In case of death, bankruptcy of a partner or a partner’s desire to exit from the business, the agreement provides continuity of the business.
Who Requires This Service?
- Entrepreneurs: Persons looking to start a new mainland or free zone business with one or more partners.
- Existing Business Owners: Persons looking to formalise a verbal MoA or amend their existing MoA to reflect new terms.
- Foreign Investors: Companies from abroad that are looking to enter the UAE market via partnership with a local partner individual or entity.
- Professional Firms: Doctors, engineers, consultants etc. looking to set up a professional civil company.
Mandatory Requirements and Documents
In order to prepare and register a Partnership Agreement in the UAE the following are the usual requirement.
- Name Reservation Certificate from DED: DED issues a Trade Name Reservation Certificate which confirms that a specific trade name has been reserved for a particular business activity.
- Initial Approval Certificate: Initial approval certificate from the competent authority regarding the specific business activity being set up.
- Partner ID: Passports copies of the partners, copies of Emirates IDs and copy of residency Visa in case the partner is an UAE Resident.
- Ejari: Registered lease agreement showing proof of address.
- Power of Attorney: In case a representative of a partner is signing the Partnership agreement on his behalf, he has to produce a Power of Attorney certified by notary public.
Key Sections of a UAE Partnership Agreement
When we draft your agreement, we ensure it covers these essential areas:
Name & Purpose of the Partnership
This section states the name of the partnership and its purpose of work.
Information about all Partners
This section should list your partner’s name and address.
Investment (Money or Property Contributions)
This section determines how much money or property each partner contributes to the partnership.
Profit and Loss Distribution
This section determines how the profits and losses will be distributed among the partners.
Management, Duties & Decision Making
This section determines:
Who will take care of what
Who has the right to make a decision
How decisions will be made
Dispute Resolution
This section includes what the partners will do if they can’t agree on something. For example: negotiating, mediation and arbitration.
Dissolution or Cessation of the Partnership
This section states what will happen if a partner decides to leave the partnership. Or, if the partnership ceases to exist.
Legal Considerations (Rules of UAE Law)
Under UAE law:
All agreements must be written in accordance with the UAE Commercial Companies Law.
There are certain types of partnerships which require a UAE national to own 51% of a partnership unless it is a special type of partnership.
All agreements need to be notarized and must be translated into Arabic by a certified translator.
Process for Drafting Partnership Agreement in UAE
The legal steps must be followed to formalise a partnership in UAE:
- Activity selection – identify the business activities that allow for a partnership structure.
- Drafting– Drafting lawyer will assist you with drafting of all clauses of the partnership agreement in accordance with the Federal Decree – Law No. 32 of 2021.
- Legal translation – if the agreement is drafted in English, it must be translated into Arabic by a certified legal translator.
- Notarization – To sign the agreement, the partners should be present physically (or via digital notary).
- DED submission – the agreement must be submitted to the Department of Economic Development (DED) as part of the final license filing.
Legal Requirements for Notarization
A partnership agreement is not considered to be fully operational until it has been notarized in the UAE. All partners need to be present and sign the document before a Public Notary (or private notary service) in front of the governmental authority. Typically it involves:
- Drafting: A lawyer writes the agreement in English and Arabic.
- Initial approval: The business activity is reviewed by the DET
- Notarization: The partners sign the document at the Notary Public.
- Licensing: The notarized agreement is submitted to obtain the final Trade License
New Changes in UAE Law
The UAE laws are changing as per the needs of the people. Here are two major changes you must be aware of:
- Age of Majority:
From June 2026, anyone who is 18 years old can sign contracts and run a business (before, the minimum age was 21) .This means young people can legally manage and lead business partnerships.
- Pre‑Contractual Liability:
Under the new UAE Civil Transactions Law (which is effective from June 1, 2026) there is a requirement to negotiate in good faith and fairness.
This means that where a person says he wishes to do business with you but has no such intention; or provides false information; or induces you to believe the contract is concluded, only to withdraw from negotiations without justification. Such a person may be held liable to compensate for the damages suffered as a result.
In short: If you conduct negotiations unfairly, you may be liable to the other party for compensation.
FAQs – Partnership Agreement in UAE
What do you mean by partnership agreement?
Partnership agreement is a legal manual that defines the terms and conditions in which the relation between two or more business partners is maintained. It highlights the responsibilities, rights and duties of every partner in the business.
The importance of a partnership agreement?
A partnership agreement eliminates confusion and wrangles among partners by investing the ownership arrangement, division of profits, roles and duties of management and decision making.
What is to be put in a partnership agreement?
Typically, a partnership agreement contains the following information: partners name, contribution of capital, profit and loss distribution, partners roles and responsibilities, the decision making process, dispute resolution methods, and departure.
Does a partnership agreement exist to commence a partnership business in the UAE?
Although there are certain requirements that might differ, according to the business structure, it is strongly suggested to create a written partnership agreement that will define the relations between partners in a legal manner and will safeguard their interests.
Is it possible to amend a partnership agreement once the agreement has been signed?
Yes. The partnership agreement is modifiable in case all the partners concur with the changes. The new deal must also be in writing and signed by partners.
What is the case in case the partners lack a partnership agreement?
In case partners work without a written partnership agreement, they can be confused in sharing the profits as well as in making the decisions in management or the responsibilities of the partners. In these instances, an issue might require to be solved in business laws.
Is it possible to have a partnership agreement with profit-sharing arrangements?
Yes. Profits and losses can be equally shared between partners in a partnership agreement, and the manner in which this will happen can be clearly spelt out depending on the contributions of partners or agreed terms.
Does a partnership agreement in the UAE need notarization?
Partnerships can in certain instances be required to be notarized or legally authenticated in accordance to business structure and requirements of the law through a notary public in Dubai.
Is it possible to leave the business when a partnership agreement is signed?
Yes. A majority of partnership agreements will contain terms that govern how the partner may get out of the business, sell the business or end the business.
Is it possible to use lawyers to help write a partnership agreement?
Yes. Corporate lawyers in Dubai will be able to create partnership agreements that are legally binding, maintain the rights of all the partners, and assist in arranging the agreement based on the existing UAE business legislation.
Contact HHS Lawyers Today
Don’t leave your business future to chance. A clear and well written partnership agreement safeguards your business relationship and keeps things smooth. Call HHS Lawyers for a consultation, we’ll handle the legal paperwork so you can concentrate on expanding your business in the UAE.
