Prerequisites for Starting up a Business

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For starting up a business there are two forms of executing an organization. One can start from the scratch and then building upon resources and achieving targets of growth and profitability in every passing year. This form of growth is called organic growth. The second form of starting a business requires a certain company which can be named as Acquisition Company who acquires the other company which is known with the name of a target company. The form or mode of the business also requires to be agreed upon in advance. It means the owners of the company or those persons who have stake in it need to agree in advance as to whether the form of the company would be limited company, a partnership firm or in some cases it can be worked upon simply by a single owner in the form of sole proprietorship. The limited company means that the liability of the owners of the company will be limited. This is the exact wordings of the legislature that describes the very nature of a limited liability company. If this definition is further explored, it means that the members or the owners of the company are only responsible to contribute to the company, in the event of winding up of the company, to the extent of their investment share in the company. “Winding up” means that the company will no longer be operational and lose its existence. The forms of winding up are different and each form is due to some unique reasons. Not paying the creditors on time with no probable chances of payment in the near future is one of the reasons which trigger the winding up process. The company has certain primary documents which are required for the confirmation of existence of the company and includes articles and memorandum of association. If a certain object clause in mentioned in the said documents and the same is no longer be practicable then the company is wound up.


In order to start a business in Dubai, some extensive legal requirements must be fulfilled.  These requirements are made up in part to reflect the nature of documentation which includes preparing the rules and regulations of the Business. In order to get the Business registered the services of a legal expert must be sought. It is very necessary to have some experienced lawyer or such other company as a part of the panel for such purpose. In case it is decided that the company would be a limited liability company, further complications arise when it is to be decided whether the company would a private or public with further questions and queries regarding as to whether the public company would be listed or unlisted. The most complicated and detailed requirements for establishing a UAE free zone company would be in case of a public listed company. Listing of a company means that its shares would be listed on stock exchanges and will be dealt on a daily basis there. In order to start a business in Dubai one must keep in mind that it requires huge cash outflows at the start with no or very limited cash inflows for the next year or two till the business picks up momentum and is started to recognize in the commercial circle. Specially in case of a Business setup in Dubai the cash flows pose a real problem and the company must have guaranteed and secured amount of long term funding in order to succeed and excel.

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