LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Company Registration in Sharjah |

Overview of Company Registration in Sharjah

After Dubai and Abu Dhabi, Sharjah is regarded as one of the emirates with the highest population. The Dubai-Sharjah-Ajman metropolitan area includes this emirate. Between Dubai, Ajman, Umm Al Quwain, and Ras Al Khaimah is Sharjah. As a result, it becomes a popular destination for investors to go for Sharjah company registration. The Persian Gulf is accessible from this emirate.

Overview

Due to Sharjah's affiliation with the UAE, neither businesses nor people are subject to any kind of capital gains tax or withholding tax. Different import and export kinds are not subject to taxes. Consequently, it would be a wonderful place to launch a business. A Sharjah-incorporated firm must have at least 51% of its shares owned by local Emirati citizens. However, the corporation would be the sole one to choose the profit sharing ratio. This gives the client the freedom to launch a business in Sharjah.

Sharjah is renowned as an industrial hub that draws many global manufacturers. Sharjah is where more than 80% of manufacturing takes place. Setting up a manufacturing or production business in Sharjah would therefore be excellent. Sharjah is regarded as one of the top ten business-friendly cities in the United Arab Emirates. Investors can effortlessly incorporate a business here. In Sharjah, there are various types of free trade zones that let a company to have 100% foreign ownership. In addition to this, Sharjah free trade zones offer a variety of benefits for business incorporation. These free trade zones include Hamriyah Free Trade Zone and Sharjah Airport International Free Zone.

The low cost of manufacturing facilities in Sharjah is a result of the abundance of resources, including water and energy. Therefore, manufacturing organizations can use the aforementioned resources to provide the product they need. An investor may find it appealing to proceed with the Sharjah company registration process due to all the perks listed above.

Advantages of Sharjah Company Registration

Exceptional Infrastructure- The third most populous city in the UAE after Dubai and Abu Dhabi is Sharjah, which is a part of the United Arab Emirates. This well-known area may be found close to Dubai. Due to the government's extensive support for businesses, incorporation is fairly simple here. Either Sharjah non-free trade zones or Sharjah free trade zones are available for incorporation by investors. The government might offer greater perks and incentives if they register a business in the Sharjah free trade zones.

Existence of Resources- In Sharjah, manufacturing facilities are inexpensive due to the city's abundance of resources including water and energy. Therefore, manufacturing organizations can use the aforementioned resources to provide the product they need. More than 60% of the costs associated with the resources utilized in routine industrial activities are borne by the government.

Zones of Free Trade- In Sharjah, there are several free trade zones, including the Hamriyah Free Trade Zone and the Sharjah Airport International Free Zone. A free trade zone would permit 100 percent foreign ownership of a company. Along with this, the government also provides a variety of advantages and incentives.

Enormous cargo hub- Sharjah is one of the world's biggest freight hubs since it is located in the middle of four emirates. This is because the Sharjah International Free Trade Zone is present.

Eligible Corporate Structures for Sharjah Company Registration

The business structures listed below can be used to register a company in Sharjah:
Limited Liability Companies (LLC)- One of the most popular business structures used for Sharjah company formation is this one. In this type of business, the partners' liability is constrained. An LLC established in Sharjah must have a minimum of two participants in order to comply with the Second Federal Company Law. The maximum number of partners, however, cannot exceed 50. An LLC in Sharjah may have foreign residents as managers. The minimum investment required to form a limited liability company in Sharjah is AED 150,000.

Branch Office- Sharjah's branch office is only an outgrowth of the international parent firm. Either a Sharjah Free Trade Zone or a Non-Sharjah Free Trade Zone may be chosen as the location for the branch office. Foreign ownership would be subject to limitations, nevertheless, if the business was established outside of the Sharjah Free Trade Zone.

Joint Stock Companies- Sharjah allows for the registration of joint stock companies. Similar to a public corporation that lists its shares on a public limited stock exchange is a joint stock company.

Company of the Sharjah Free Trade Zone- In Sharjah, there are numerous free trade zones. In the Sharjah Free Trade Zone, a branch office of a foreign company may be established. The corporation can be incorporated here for a variety of reasons. The business may have just foreign ownership.

Minimum Requirements for Sharjah Company Registration

The following eligibility requirements must be met in order to register a business in Sharjah:
Ownership- If a firm is established in a non-free trade zone, the required ownership percentage for a Sharjah company registration applicant is merely 49%. A native Emirati citizen must be chosen by the company to hold a 51% ownership stake. Therefore, no foreign ownership of this type of company is permitted. 100% foreign ownership is permitted if the business is registered in the Sharjah Free Trade Zone.

Capital- Each firm has a unique minimum capital requirement for Sharjah company registration. The minimum amount of capital needed to form an LLC is AED 150,000.

Foreign Directors- A foreign management or director may be appointed by an LLC. The applicant must confirm that the directors meet Sharjah's requirements for corporate registration. The acquisition of suitable visas for the foreign directors would be one such need.

The Sharjah Company Registration Process

In Sharjah, the following process is necessary for company registration:

Type of Business- An applicant must first choose the kind of business that qualifies for Sharjah company registration. The Sharjah free zone company would be the best business structure if the applicant wanted a corporation in Sharjah with 100% foreign ownership. However, a limited liability company would be the best option in Sharjah if the applicant wants some level of independence and oversight by international managers.

Local sponsor- According to UAE law, a foreign business must locate a local sponsor. A majority shareholder in the business is required for the local sponsor. Accordingly, the local sponsor would have to control more than 51% of the company. Up to 49% of the company's shares must be owned by the foreign corporation. However, choosing a free zone business would be appropriate if the applicant for company registration in Sharjah seeks 100% foreign ownership.

Become a Department of Economic Development registered business- The applicant would need to register with the Department of Economic Development following the selection of a suitable structure and the identification of a local sponsor (DED). In addition, the applicant can complete the company registration process by visiting the Sharjah Chambers of Commerce website.

Submission for a relevant license- The applicant would submit an application for the relevant license after registering the business. Trade licenses, industrial licenses, and professional licenses are the three categories of licenses that can be requested.

Registration of Trade Names- The applicant would need to register the trade name after obtaining the trading license. The corporate name would be the trade name. The public must not know about another name like that. The name you choose must not violate someone else's intellectual property. The name ought to stand out from all other names.

Municipal endorsement- The applicant would next need to obtain municipal approval in the following phase.
Memorandum of Association drafting- The memorandum of association would need to be written by the applicant. Here, the applicant would need to offer accurate information about the business. The memorandum must be notarized in front of the appropriate notary after it has been written.

Lease agreement- Beginning in 2019, the Sharjah government will mandate that businesses employ locals and have actual offices there. If the applicant needs office space in Sharjah, office space security must be done. The leasing agreement needs to be notarized after everything is concluded.

Make a license fee payment- The appropriate license fee must be paid by the applicant. Once this is done, the company needs to obtain the name board's blessing. This marks the end of the Sharjah company registration process.

Requirements for Sharjah company registration

When registering a business in Sharjah, the following requirements must be met:

Taxes- There is no corporate tax in Sharjah. Even personal income tax is not levied on earnings made in Sharjah. Since 2018, a 5% Value Added Tax (VAT) has been imposed. The Sharjah subsidiary would not be subject to withholding tax if dividends were paid. This would only be the case, though, if the overseas parent firm received the dividend payments.

Annual General Meeting- Under Articles 92 and 171 of the UAE Commercial Firms Law of 2015, all UAE companies are required to have an Annual General Meeting (AGM) within four months of the end of the fiscal year.

Sanctions for failing to have an AGM- A punishment of AED50,000 to AED100,000 is imposed on the firm if an Annual General Meeting is not held as required by law.

Board Meetings- If such a clause is present in the memorandum of association, a board meeting must be held at least once each year.

Documents Needed

In Sharjah, the following papers are necessary for company registration:

Application for registering a business

A copy of the contact's business card

Business plan sample

Attested and notarized Memorandum of Association (MOA)

Articles of Association with Notarization and Attestation (AOA)

Copies of the partners' and managers' passports

Original bank reference letters and, if required, a license for the partner's current business

Lease agreement

Bank Positions taken by the parent company (Last three months)

Authority of Attorney (For representative)

Resolution of the Board of the Foreign Parent Company

The project's feasibility report, which will be implemented.

How to Contact Estabizz for Sharjah Company Registration

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FAQs

Concept of LLP

LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.

Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Structure of LLP

LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

Advantages of LLP

LLP form is a form of business model which:

(i) is organized and operates on the basis of an agreement.

(ii) provides flexibility without imposing detailed legal and procedural requirements

(iii) enables professional/technical expertise and initiative to combine with financial risk-taking capacity in an innovative and efficient manner

Other Countries where this form is available

The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

Difference between LLP & ‘Traditional Partnership’

Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct

Difference between LLP & Company

A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.
The management-ownership divide inherent in a company is not there in a limited liability partnership.
LLP will have more flexibility as compared to a company.
LLP will have lesser compliance requirements as compared to a company.

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