DIFC General Partnership

Under the General Partnership Law, DIFC Law No. 11 of 2004[DIFC Legal Database], a prospective registrant may establish either a General Partnership (GP) or a branch of a pre-existing foreign general partnership (RP)[DIFC Registrar of Companies].

Formation requires two or more persons[DIFC Registrar of Companies] — a general partnership cannot have a single partner. A recognised partnership (the branch form) may only be set up by another existing partnership[DIFC Registrar of Companies], so it is not a route available to individuals or to a company.

The partnership is registered with the Registrar of Companies, which administers the General Partnership Law alongside five other statutes[DIFC Registrar of Companies], and receives a commercial licence in the ordinary way — the application for the certificate is treated as also being the application for the licence[DIFC Registrar of Companies].

DIFC draws an explicit line between two categories of entity. PLCs, LTDs, LLPs, LPs, NPIOs and Foundations are “incorporated” entities, having separate and independent legal status from their incorporator(s)[DIFC Registrar of Companies]. The General Partnership is not on that list.

That is the whole of the matter, and everything practical follows from it:

• The partners are the business. There is no corporate shield sitting between a partner and the partnership’s obligations in the way an LTD or LLP provides.
• Partners are exposed to each other’s acts in the conduct of the partnership, which is a very different risk from being a shareholder alongside someone.
• Personal assets are in scope in a way they are not in a limited-liability structure.

Our plain advice: if you are choosing between a GP and an LLP for a professional firm, and nothing external is forcing your hand, choose the LLP. The LLP exists precisely because partnerships wanted partnership economics without unlimited exposure, and DIFC lists LLPs among the incorporated entities with separate legal status[DIFC Registrar of Companies]. Read that sentence about liability again, and then take advice on your specific facts before forming a GP.

Three partnership forms, three different answers[DIFC Registrar of Companies]:

• General Partnership (GP) — two or more persons. Not among the incorporated entities. Simplest, and the most exposed.
• Limited Liability Partnership (LLP) — two or more persons, and a natural person must be the designated member. An incorporated entity with separate legal status. The standard choice for professional firms.
• Limited Partnership (LP) — two or more persons, an incorporated entity, and structured around general partners and limited partners. The workhorse of fund structures rather than of professional practices.

All three require two or more persons, so none of them is available to a sole founder — for that, see the private company, which may be established by one or more natural persons or bodies corporate[DIFC Registrar of Companies].

The honest list is short:

• Mirroring an existing partnership structure where a group or a professional body requires the same form across jurisdictions.
• Registering a branch of an existing foreign general partnership (an RP) — in which case the form follows the head partnership rather than being chosen[DIFC Registrar of Companies].
• Arrangements where the partners have deliberately accepted joint exposure, understand it, and have taken advice on it — this does occur, and it is a legitimate choice when made with open eyes.

If your reason is “it seemed simpler”, that is not a reason. The administrative difference between a GP and an LLP is marginal; the liability difference is not.

In a company, a great deal is supplied by default: the Companies Law fills gaps your articles do not address. In a partnership, the agreement between the partners carries far more of the load, and a thin agreement is where partnerships fail.

Cover at minimum:

• Capital and profit shares, and how they change when someone joins or leaves.
• Decision-making — what needs unanimity, what needs a majority, and what any partner may do alone. This last one matters enormously in a GP, because a partner acting alone can bind the others.
• Admission and exit, including what happens on death, incapacity, retirement and expulsion. Partnerships without an exit mechanism become disputes.
• Valuation on exit, agreed in advance rather than negotiated in anger.
• Restrictive covenants and what a departing partner may take.
• Dispute resolution. Disputes arising out of the DIFC and its operations sit with the DIFC Courts[DIFC Courts — Jurisdiction] — but the internal mechanics of how partners resolve disagreement before litigation should be in the agreement.

Have this drafted properly. It is the cheapest insurance in the structure.

Registration. Through the Registrar of Companies under the General Partnership Law, with the entity-specific checklist DIFC publishes alongside its handbooks and Table of Fees[DIFC — Handbooks & Fees]. See the documents required.

Premises. A registered DIFC address is required, as for any entity — see DIFC office space.

Licence renewal. Annually, no later than thirty days after the expiry date[DIFC Registrar of Companies].

Regulated activity. A commercial licence does not authorise Financial Services requiring a DFSA licence[DIFC Registrar of Companies]. If the partnership will carry on a regulated activity, that is a separate authorisation — see the DFSA explained.

Tax. Partnership treatment under the UAE corporate tax regime is a technical question that turns on the specific facts, and it is one to put to a tax adviser rather than to infer. See DIFC corporate tax.