–A PJSC divides its capital into equal, negotiable shares that it may offer to the public, while an LLC is a closed company that cannot
Federal Decree-Law No. 32 of 2021 on Commercial Companies governs both forms on the UAE mainland. Under Article 105, a public joint stock company is a company whose capital is divided into equal and negotiable shares. Under Article 32, no company other than a public joint stock company may offer securities for public subscription. An LLC can have between one and 50 partners, and its membership interests are transferred privately, subject to the other partners’ pre-emption rights.
The difference decides what the company can do. An LLC suits a closely held business, a joint venture or a subsidiary. A PJSC is the form for a company that wants to raise money from the public or carry on banking or insurance. It is also the form for a listing on the Dubai Financial Market or the Abu Dhabi Securities Exchange. The price of that access is a higher capital floor, a mandatory board and supervision by the Capital Market Authority.
- Only a PJSC can offer shares to the public. Article 32 reserves public subscription to public joint stock companies.
- Only a PJSC can carry on banking and insurance. Under Article 11(3), these activities are open only to public joint stock companies, subject to the special laws that govern them.
- The capital floor is higher. The law sets a minimum issued capital of AED 30 million for a PJSC, against no fixed minimum for an LLC.
- A board is mandatory. A PJSC must have a board of three to eleven members elected by cumulative voting, while an LLC is managed by one or more managers.
- Shares are freely negotiable. PJSC shares can be traded once listed, while LLC interests are subject to pre-emption and the terms of the memorandum.
- The regulator changed in 2026. The Capital Market Authority replaced the Securities and Commodities Authority on 1 January 2026.
Who this applies to
This applies to founders and shareholders of growing UAE companies considering a public offering, family businesses planning to list, and investors deciding which vehicle to use for a joint venture or acquisition. It concerns boards and CFOs of companies in financial services, real estate and energy, where public capital and regulated activities favour the PJSC form.
Our corporate lawyers in the UAE advise on the choice of company form, conversion from LLC to joint stock company and preparation for listing. This article covers the PJSC and its differences from the LLC. Our guide to the limited liability company in Dubai covers LLC formation in detail.
The legal framework
- Federal Decree-Law No. 32 of 2021 on Commercial Companies. The Commercial Companies Law governs LLCs, public joint stock companies and private joint stock companies on the mainland. It was amended by Federal Decree-Law No. 20 of 2025, which took effect in October 2025.
- Federal Decree-Law No. 32 of 2025 on the Capital Market Authority. The CMA Law took effect on 1 January 2026. Under Article 2, the Capital Market Authority replaces the Securities and Commodities Authority as its legal successor.
- Federal Decree-Law No. 33 of 2025 on the regulation of capital markets. It governs securities offerings and trading alongside the CMA Law, which repealed Federal Law No. 4 of 2000.
- The Authority’s governance and listing rules. Under Article 6 of the Commercial Companies Law, the Authority issues the governance rules for public joint stock companies.
The administering bodies:
- The Capital Market Authority. It supervises issuers, their boards and executive management, and regulates public offerings of securities.
- The Ministry of Economy and Tourism and the economic departments of each emirate. They register LLCs and private joint stock companies and maintain the commercial register.
- The Dubai Financial Market and the Abu Dhabi Securities Exchange. DFM and ADX list and trade the shares of public joint stock companies.
The supervising courts:
- The onshore courts of each emirate. They hear shareholder disputes, claims against directors and applications concerning general assembly resolutions.
What a PJSC is
A PJSC is built to raise capital from the public. The law sets its structure from incorporation onwards.
Founders and incorporation
Under Article 107(1), five or more persons may incorporate a public joint stock company. Under Article 105, the Council of Ministers may set the minimum and maximum percentage of shares that the founders must subscribe. Under Article 117, the founders subscribe within the limits stated in the prospectus and may not subscribe to the shares offered to the public.
Capital
The law sets the minimum issued capital of a PJSC at AED 30 million. The shares are equal in value and negotiable, and they can be listed on a UAE exchange after the offering.
Banking and insurance
Under Article 11(3), only public joint stock companies may carry on banking and insurance, subject to the special laws that govern those sectors. A bank or insurer must therefore be incorporated as a PJSC or convert before it is licensed.
How a PJSC differs from an LLC
The two forms differ in who can invest, how the company is managed and how shares change hands. The table sets out the main points, including the private joint stock company, which falls between them.
Ownership and transfer
An LLC has between one and 50 partners under Article 71. Under Article 80, when a partner wants to sell to a third party, every other partner may ask to buy the interest within 30 days of notice of the agreed price. PJSC shares are negotiable and, once listed, change hands on the exchange without that restriction.
Management
Under Article 83, an LLC is managed by one or more managers named in the memorandum of association. A PJSC must have a board. Under Article 143, the board has between three and eleven members, each serving a term of up to three years. Under Article 144, the general assembly elects the board by secret cumulative voting, so each shareholder has votes equal to the number of shares held.
Investor rights
The 2025 amendments to the Commercial Companies Law allow LLCs to issue different classes of shares, with different voting, dividend and liquidation rights. That narrows one gap between the two forms. Our article on the Commercial Companies Law amendments covers share classes, drag-along and tag-along rights in LLCs.
Disclosure and supervision
A PJSC is subject to the Authority’s governance rules, disclosure obligations and supervision of its board and executive management. An LLC files with the economic department and must appoint an auditor under Article 27, but it has no public disclosure regime. The cost of compliance is a real part of the decision.
The private joint stock company as a middle step
The private joint stock company has a board and shares like a PJSC, but it cannot offer securities to the public. For a growing LLC, it is the step between a closed company and a listed one.
Capital and structure
The law sets a minimum issued capital of AED 5 million for a private joint stock company. Its shares are held privately, and transfers follow the articles of association. Under Article 32, it may not offer securities for public subscription.
When it fits
A private joint stock company fits a business that wants a board, a share structure familiar to institutional investors and a cleaner path to a later listing. It also suits a family business that wants to separate ownership from management before inviting outside capital.
Converting an LLC into a PJSC
A UAE company does not have to start as a PJSC to list. Conversion is the route open to a business that has grown as an LLC.
The legal route
The Commercial Companies Law has a chapter on the conversion of companies. Under Article 107(3), a company converting into a public joint stock company is exempt from the minimum number of founders. The conversion requires a resolution of the partners, a valuation of the company’s assets and liabilities, a capital that meets the PJSC minimum and the approvals of the Authority and the economic department.
The offering
After conversion, the company offers part of its shares to the public through a prospectus approved by the Authority. The prospectus must disclose the company’s business, financial statements, risks and governance. Our article on private equity exits in the UAE covers the IPO as an exit route for investors.
Preparing the company
A company planning conversion should align its accounts, board, related party arrangements and shareholder agreements with PJSC rules before it applies. Shareholder agreements that give a partner a veto or a guaranteed board seat may not survive conversion in the same form. Our article on shareholder agreement pitfalls in UAE LLCs covers the clauses that cause disputes.
Free zone and financial centre alternatives
The Commercial Companies Law governs mainland companies. Companies in the free zones and the two financial centres follow their own company regimes.
DIFC and ADGM
The DIFC and ADGM have their own companies laws, with private and public company forms based on common law models. A public company in either centre can offer shares to the public under the centre’s own markets rules. A group may use a DIFC or ADGM holding company above a mainland operating company to combine a familiar legal system with onshore activity.
Free zones
Free zone companies follow the rules of their free zone authority, and their ability to trade on the mainland is limited. A free zone company planning a public offering on a UAE exchange should take advice on whether it must restructure first. Our article on holding company structures in Dubai compares mainland, free zone and financial centre vehicles.
Common mistakes when choosing between an LLC and a PJSC
Using an LLC for a business that will need public capital. An LLC cannot offer securities to the public, so a business planning a listing will have to convert first.
Underestimating the compliance cost of a PJSC. A PJSC carries disclosure, governance and supervision obligations that an LLC does not, and these continue every year after listing.
Ignoring the private joint stock company. A private joint stock company gives a board and a share structure without the obligations of a public company.
Keeping LLC-style vetoes in a converting company. Rights that suit a closed LLC may conflict with PJSC rules on board elections and equal treatment of shareholders.
Relying on outdated regulator references. Since 1 January 2026 the Capital Market Authority has replaced the Securities and Commodities Authority, and documents should refer to the new body.
What founders and shareholders should do next
- Decide whether public capital is part of the plan. If a listing or public offering is likely, plan the route from LLC to joint stock company early.
- Check the activity. Confirm whether the business needs to be a PJSC for banking, insurance or another regulated activity.
- Compare the capital requirements. Assess whether the company can meet the AED 5 million or AED 30 million minimum.
- Review the constitutional documents. Align the memorandum, articles and shareholder agreements with the target form.
- Prepare the accounts and governance. Put audited financial statements, a board and related party controls in place before applying.
- Engage with the Authority early. Discuss the conversion and offering timetable with the Capital Market Authority and the exchange.
Should a UAE business be an LLC or a PJSC?
An LLC is the right form for a closely held business, a joint venture or a subsidiary that does not need public capital. It can have one to 50 partners, no fixed minimum capital and management by one or more managers. A PJSC is the form for a business that wants to offer shares to the public, list on DFM or ADX, or carry on banking or insurance.
The main trade-off is control against access to capital. A PJSC can raise money from the public, but it must meet the AED 30 million capital floor, elect a board by cumulative voting and accept supervision by the Capital Market Authority.
The commercial consequence is that the choice of form shapes the company’s future. A business that chooses the right form at the start, or plans the conversion path early, can raise capital when it needs to. A business that does not may face a restructuring at the moment it is ready to grow.
For founders and shareholders, our corporate and commercial team advises on the choice of company form, conversion to a joint stock company and preparation for a public offering.
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