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Limited Partnership Contract for United Arab Emirates

Limited Partnership Contract Template for United Arab Emirates

A Limited Partnership Contract under UAE law establishes a partnership between one or more general partners who have unlimited liability for partnership obligations and manage the business, and one or more limited partners whose liability is restricted to their capital contributions. This document, governed by UAE Commercial Companies Law (Federal Law No. 2 of 2015), outlines the partnership structure, capital contributions, profit-sharing arrangements, management rights, and obligations of all parties. It provides essential legal protection for limited partners while ensuring clear operational guidelines for general partners who maintain control over day-to-day operations.

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What is a Limited Partnership Contract?

The Limited Partnership Contract is a crucial legal document used in the United Arab Emirates when establishing a business partnership where certain partners wish to maintain limited liability while others take on full management responsibility. This contract type, regulated under the UAE Commercial Companies Law, is particularly useful for businesses seeking to attract passive investors while maintaining clear operational control under general partners. The document details capital contributions, profit-sharing arrangements, management structures, and partner obligations, while ensuring compliance with UAE commercial regulations. It's commonly used in family businesses, professional services, and investment ventures where some partners prefer to limit their exposure while contributing capital to the enterprise.

What sections should be included in a Limited Partnership Contract?

1. Parties: Identification of all partners, distinguishing between general partners and limited partners, including their full details and legal status

2. Background: Context of the partnership formation, business objectives, and partner relationships

3. Definitions: Definitions of key terms used throughout the agreement

4. Partnership Formation: Declaration of partnership formation, partnership name, and registration details

5. Business Purpose: Detailed description of the partnership's business activities and scope

6. Capital Contributions: Details of initial and any subsequent capital contributions by each partner

7. Profit and Loss Distribution: Framework for sharing profits and losses among partners

8. Management and Control: Management structure, rights, and responsibilities of general partners

9. Rights and Obligations of Limited Partners: Scope and limitations of limited partners' involvement

10. Partner Meetings: Procedures for partner meetings, voting rights, and decision-making processes

11. Accounts and Records: Requirements for maintaining partnership accounts and financial records

12. Transfer of Partnership Interests: Rules governing the transfer of partnership interests

13. Term and Termination: Duration of partnership and circumstances for termination

14. Dissolution and Liquidation: Procedures for partnership dissolution and asset distribution

15. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction details

What sections are optional to include in a Limited Partnership Contract?

1. Non-Competition: Restrictions on partners engaging in competing businesses, used when partners have other business interests

2. Intellectual Property Rights: IP ownership and usage rights, included when the partnership involves significant IP assets

3. Confidentiality: Provisions for protecting partnership confidential information, essential for partnerships with sensitive information

4. Islamic Finance Compliance: Specific provisions ensuring Shariah compliance, included when partners require Islamic finance principles

5. Branch Offices: Provisions for establishing branch offices, included when geographic expansion is planned

6. Partner Death or Incapacity: Specific procedures in case of partner death or incapacity, important for family businesses

7. Dispute Resolution: Alternative dispute resolution mechanisms, included when partners prefer arbitration or mediation

What schedules should be included in a Limited Partnership Contract?

1. Schedule 1 - Capital Contributions: Detailed breakdown of each partner's capital contributions, including valuation of non-cash contributions

2. Schedule 2 - Business Plan: Initial business plan and projected financials

3. Schedule 3 - Management Procedures: Detailed procedures for day-to-day management and decision-making

4. Schedule 4 - Partner Details: Complete partner information including addresses, contact details, and appointed representatives

5. Schedule 5 - Profit Distribution Formula: Detailed calculations for profit and loss allocation

6. Appendix A - Partnership Registration Documents: Copies of official registration documents and licenses

7. Appendix B - Partner Resolutions: Initial partner resolutions and authorizations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Publisher

Ƶ

Cost

Free to use

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