4 business incorporation types in Sharjah that business owners should know about

Before you plunge into a business set up in Sharjah, you need to determine the kind of business incorporation that you'll delve into. The government authorities in Sharjah have defined several legal structures for business owners.

The rules for each type of company may differ, and the categorization depends on the ownership of the firm. And if you are a foreign national, and are seeking an opportunity for offshore company incorporation, you may want to go for a free zone license if you want 100% ownership of your business. So listed below is an overview of the types of business incorporation.

1. General partnership

This kind of business incorporation in Sharjah is exclusively for the UAE nationals. It is formed by two or more partners who are liable for the organization’s "profit-and-loss" performance, and also responsible (separately or together) for the debts incurred by the organization.

The names of the actual partners are allowed to be included as a company name. The individuals that are a part of the management team of the organization should be UAE nationals.

2. Shareholding company

A Public Shareholding Company is developed with a share capital split into tradeable shares. The liability of every partner is restricted by their share in the capital. Public shareholding organizations are not licensed unless there is a minimum of 10 founders, and the share capital of the organization is not less than 10 million AED.

In case of Private Shareholding Company, the same rules as a Public Joint Stock Companies will be applicable. The share capital should not be less than 2 million AED.

3. Limited liability company

This kind of business incorporation in Dubai is widely adopted in Sharjah. It can be formed by at least people, but not more than 50 people. In Sharjah, the required minimum capital for this type of company setup is AED. 150,000 (US$ 41,000). Foreign ownership of shares is allowed, which must not be more than 49% of the company’s capital.

4. Joint Venture

The joint venture is also known as ‘consortium’. The Joint venture should be owned by two or more legal entities or individuals.

The process of a joint venture can only be carried out under the private name of one of the partners, who should be a UAE national.

It must be highlighted here that in any of these four business incorporation categories in UAE, the participation UAE nationals must never go below 51%. However, in free zones, foreign nationals can own 100%.

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