Key Takeaways
- The memorandum and every later amendment have to be in Arabic and authenticated. If there's also an English version, the Arabic one wins (Article 14 of the Commercial Companies Law, 2021 text).
- Under Article 73, the memorandum must say how disputes are settled, both between the company and its managers and between the partners.
- For a one-person LLC in Dubai, dubai.ae says no articles of association are needed (October 2026).
- Since Federal Decree-Law 20 of 2025, an LLC can have more than one class of quotas if its memorandum allows it. A Cabinet decision is still to set the detailed rules.
- LLC articles can now include drag-along and tag-along clauses, although the partners' statutory right to buy first may limit them in practice.
When two co-founders register a mainland LLC, the licensing office or the setup provider usually hands them a standard memorandum of association to sign. Mainland means anywhere in the emirate outside a free zone, and an LLC is a limited liability company. The memorandum of association (MoA) is the founding contract between the owners, and a standard form may or may not suit the deal the two of them have made.
Read it closely before the signing appointment. Once a UAE memorandum has been authenticated, the only way to change it is another authenticated amendment. Before that point, a change is just an edit to a draft.
What the memorandum covers and what it leaves out
The memorandum is the LLC's founding document, and the licensing authority enters it in the Commercial Register, the official record of companies (Commercial Companies Law, Article 15, 2021 text). It gives the company's name together with its legal form, as Articles 12 and 72 require. It normally lists the partners as well. Article 71 allows between 2 and 50 of them, or a single owner. Then come the capital, under Article 76, and the rules for the managers who run the company.
Share capital means the amount the owners commit to the company. The law sets no fixed minimum for an LLC. Article 76 only asks that the capital be sufficient and paid in full when the company is set up. Cash goes into a UAE bank account, and the bank releases it to the managers once they show proof of registration.
A Dubai LLC with a single owner doesn't need articles of association, according to dubai.ae (October 2026). As soon as there are two or more partners, the memorandum is where their arrangement gets written down.
Bringing a new partner into a one-person LLC changes the number of shareholders. Article 15 says that kind of change has to be notified within 15 working days. The company name changes too, because Article 72(1) puts the words Sole Proprietorship in the name of a single-owner LLC. Check with the authority which documents it wants. A memorandum may suddenly be required where the company never had one.
Then there are the questions partners tend to argue about later. Who does what day to day? How does a funding round work? What happens when someone leaves, and how do you break a deadlock, where the partners' votes cancel each other out? Those answers go in the clauses below or in a separate shareholder agreement.
The six clauses that do most of the work
Most of the protection in a memorandum comes from six clauses. Each one ties back to an article of the law or an official statement you can look up yourself.
- Capital and contributions. Some partners put in assets such as equipment instead of cash. These are called contributions in kind, and the 2025 amendment to the law brings in standards and requirements for valuing them (Ministry of Economy and Tourism, January 2026).
- Management. Name the managers. Then say what each of them can sign alone and what needs a vote of the partners. Banks read this clause when they take the board resolution or power of attorney. The 2025 amendment also allows interim management for up to 6 months once a manager's term has ended (Ministry of Economy and Tourism, January 2026).
- Profit. Write down how profits are shared and whether anyone's share differs from the capital they hold. By law, 5% of net profit goes into a statutory reserve every year. That's a fund the company has to build up, and the partners may decide to stop adding to it once it reaches half the capital (Article 103).
- Transfer. Quotas are an LLC's version of shares. Assigning them needs an authenticated document, and the transfer only counts against the company and outsiders once it's entered in the commercial register (Article 79).
- Disputes. Article 73 says the memorandum must set out how disputes are settled, between the company and its managers and between the partners. Name the court or arbitration forum and the language the proceedings will use.
- Records. The partner register goes to the authority and the registrar every January (Article 74). A change of name, address, capital, number of shareholders or legal form has to be notified within 15 working days (Article 15).
Here's a made-up case. Two partners split the company 60 and 40. The minority partner runs the business and the majority partner supplies the money. Their memorandum should answer four things: who signs for the company, whether the 40% partner can commit it alone, how each of them gets paid, and what happens if the majority partner wants to sell. A form that says nothing on these points leaves each answer to the statute, and to a negotiation held under pressure.
Setup advisers say generic templates are often thin on disputes, transfers and what the managers may do. When the partners disagree, the statute is then all they have to go on. The bank wants to know who may sign. And every correction is an authenticated amendment that has to be registered again.
Why the Arabic text prevails and how to read a translation
Many memoranda are drawn up in Arabic and English side by side. Where the two versions say different things, the Arabic one governs (Article 14, 2021 text). The English text is there to help you read it, and that's all.
Get both versions well ahead of the authentication appointment. A lawyer who reads Arabic should then compare five points: the capital figure and its currency, the managers and their powers, and the clauses on profit, transfer and disputes. A difference on any of these hurts most when a partner leaves.
Some authorities supply their own memorandum form, and a template downloaded from a website may not match it. Find out which form applies to your licence and legal form before anyone starts drafting.
How a memorandum is authenticated and amended
Authentication means the licensing authority officially confirms the document. The memorandum and every amendment must be in Arabic and authenticated by the authority, either in person or by e-signature. Otherwise the document is deemed null and void, although the partners can't rely on that nullity against third parties (Article 14, 2021 text). In the cases the authority names in a decision, a notary does the authenticating instead.
Partners who live abroad can often sign from where they are. In Dubai, Executive Council Resolution 5 of 2024 accepts e-signature without attending in person. How notarisation and e-notary work differs by authority and by activity, and your authority can tell you what it accepts. If someone else will sign for you, the guide to attested documents and powers of attorney explains how that works.
A name change needs a special decision of the general assembly, the meeting of the partners, plus the authority's approval (Article 12(2)). Other changes go through the 15 working day notification in Article 15. Each amendment must again be in Arabic and authenticated. That's why fixing a memorandum later takes longer than getting the draft right.
Federal Decree-Law 20 of 2025 amended 15 articles of the law. The article numbers on this page follow the 2021 text published by the Ministry of Economy and Tourism. The decree-law enters into force the day after it appears in the Official Gazette, and the Gazette text is the place to confirm any date. Your licensing authority can tell you whether an existing memorandum needs amending, and by when.
What partners put in a shareholder agreement
A shareholder agreement is a private contract between the partners. The memorandum is the document the authority registers. Some terms have to be in the memorandum, either because the law puts them there or because they need to bind outsiders. Others fit better in the agreement, and your lawyer can sort each clause into the right one.
The usual topics are funding obligations, leaver terms, deadlock, reserved matters that need every partner's vote, a non-compete and the way out of the business. For deadlock, lawyers commonly draft one of a few options. One partner can get a casting vote, which decides a tie. There can be a mediation step before anyone goes to the forum named in the dispute clause. Or there's a buy-sell mechanism, a set procedure for one partner to buy the other out. Check with the lawyer which of these will hold up for your structure.
Without exit terms, a partner who wants out can only sell through the transfer clause and the statute. The other partners may also have pre-emption rights, meaning the right to buy first. A deadlock has no agreed answer either. The partners must negotiate or go to the forum in the dispute clause, and a bank account that needs two signatures stops working in the meantime. For how banks read signing authority, see the guide to rejected bank accounts.
Share classes, drag-along and tag-along since 2025
An LLC may now issue more than one class of quotas if its memorandum allows it (Ministry of Economy and Tourism, January 2026). The detailed rules still depend on a Cabinet decision. Before you draft classes into the memorandum, find out whether your authority can register them today. The amended Article 76 describes classes that can differ in value, voting, redemption and priority when profits are paid out, with each class recorded in the Commercial Register.
Drag-along and tag-along clauses deal with a sale of the company. According to the Ministry, a majority shareholder that decides to sell can require the minority partners to sell their stakes too. That's drag-along. Tag-along works the other way round, and lets minority partners join that sale on the same terms. The law firm Clyde & Co notes that the statutory pre-emption rights in LLCs may limit these clauses in practice (December 2025).
Investors in a funding round may ask for share classes and for drag and tag clauses. A memorandum written for two founders would then need an amendment. If you expect to raise money, it's simpler to draft the clause now.
A checklist for the lawyer review
Sooner or later a bank, the authority or a departing partner will test every point below. Take the draft memorandum, the Arabic text and any shareholder agreement to the lawyer and go through the list together.
- The name, legal form and capital match the licence application.
- The managers, their powers and their signing limits are clear enough for a bank to follow.
- Profit shares and the statutory reserve are written out.
- The steps for a transfer, for pre-emption and for valuing the quotas are stated.
- The dispute clause names the forum and the language, as Article 73 requires.
- Both language versions say the same thing on each of these points.
- Classes of quotas and drag and tag clauses are either included or left out on purpose.
- The amendment steps are listed, with the 15 working day notification in mind.
For a one-person LLC in Dubai, where dubai.ae lists no articles of association, doing this yourself is reasonable. With partners it's a different matter. Having a lawyer look at the form before authentication takes one conversation. Changing it after authentication means authenticating and registering the memorandum all over again. A lawyer who drafts the agreement and checks the Arabic text can spare you that later amendment.
Ownership and liability are explained in the guide to the LLC. For the full order of steps, see how to open a company in Dubai, step by step, and the registration timeline shows when the signing happens.
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