LLC AUDIT- DUBAI, SHARJAH, ABUDHABI
Limited Liability Company Audit
Limited Liability Company is the most common and easy to establish form of partnership business. According to the rule for LLC company formation in Dubai and other six Emirates, it can be formed by a minimum of two and a maximum of fifty people whose liability shall be limited to their shares in the company’s capital. Furthermore, being a flexible form of company, differential profit sharing arrangement among the partners is also possible in an LLC. The company must have 51% participation for a UAE national while the rest 49% can remain with the investor(s).
Internal auditing is performed by professionals with an in-depth understanding of the business culture, system, and processes, the internal audit activity provides assurance that internal controls in place are adequate to mitigate the risks, governance processes are effective and efficient, and organizational goals and objectives are met.
Hence, the formal shareholding pattern for an LLC is as follows:
● Local Partner (UAE sponsor) – 51%
● Foreign Shareholder(s) – 49%
Moreover, either the UAE national or the foreign partner must be granted the authority of managing the operations of the organization.
Compliance procedures are tests designed to obtain reasonable assurance that those internal controls on which audit reliance is to be placed are in effect.Substantive procedures are designed to obtain evidence as to the completeness, accuracy and validity of the data produced by the accounting system. The substantive tests include:
At present, the minimum capital requirement for a LLC company in UAE is three hundred thousand dirhams which can be in cash or in kind. It is also important to note that the capital must be divided into equal shares with the value of each not being less than thousand dirhams. Furthermore, as stipulated in the Companies Law, LLC can engage in any kind of business activity except to activities relating to banking, money investing on behalf of others and insurance.
Forming a LLC in Dubai gives foreign investors a host of advantages, thus making LLC the most popular of the legal forms of entity in Dubai. Though the foreign equity of the company cannot exceed 49 %, but the profit and the losses incurred in the operations are shared in a ratio that is different than that of the share capital ratios, and the day to day activities can easily be undertaken by the foreign investors without the interference of the local UAE partner.
A limited liability company in UAE offers wide access to the Emirates economies. The following are benefits of establishing LLC in UAE: –
● 100% tax free
● 49% of foreign ownership. However, the profits and losses can be shared in a ratio different from shared capital
● 100% repatriation of profits and capital
● Investor becomes partner in the company
● Liberal bank account opening and operating
● Easy to open global corporate bank accounts
● The investor can commence branches
● LLC offers UAE residence visa to the investors
● The company is eligible to hold limitless offices or properties in UAE
How to form LLC in Dubai?
In order to establish a LLC in Dubai, six basic steps must be followed: –
● Choose a company name which will be used to conduct business activities and apply for an approval from the Licensing Department of the Emirates you plan to setup a company in.
● Prepare a Memorandum of Association (MoA) of the company and duly get it attested by a Notary Public.
● Get an approval of the Economic Department along with the entry in the Commercial Register.
● Once the approval has been granted, a formal entry of the company is made in the Company Register followed by publication of company’s MoA in the Bulletin of the Economy and Commerce Ministry.
● A license is then issued by the Economic Department to the company.
● Finally, the company is registered with the authorized industry and commerce department.
The Licensing Authorities
● Dubai: Department of Economic Development
● Sharjah: Economic Development Department
● Other Emirates: Municipality/ Chamber of Commerce
Company Incorporation Which Require Special Approvals and Licenses
● Tourism activities
● Health Care activities
● Architectural and engineering consultancy
● Shipping, freight forwarding and logistics activities
● Companies in Dubai World Communities (Trakhees)
Accounting Records 1- Every company shall keep accounting records showing its transactions to accurately reveal at any time the financial position of the company and enabling the partners or shareholders to confirm that the accounts of the company are properly kept in accordance with the provisions of this Law. 2- Every company shall keep its accounting books in its head office for a period of at least 5 (five) years from the end of the financial year of the company. 3- The company may keep an electronic copy of the original of the documents and records kept and deposited therein in accordance with the controls issued by a Ministerial Decision.
Accounts of the Company 1- Every Limited Liability Company shall have one or more auditors to audit the accounts of the company every year. 2- The company shall prepare annual financial accounts including the balance sheet and the profit and loss account. 3- The company shall apply the International Accounting Standards and Practices upon preparing its periodical and annual accounts, to give a clear and accurate view of the profits and losses of the company.
The Legal Reserve: A Limited Liability Company shall set aside in every year 10% of its net profits to form a legal reserve. The partners may decide to stop such deduction if the reserve reaches half the capital.
What we offer
Our Audit & Assurance practice is the core of our services. Our vast experience in the profession for more than two decades helps us to offer the best of the industry services to all our clients.
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