If you are the sole owner of a UAE mainland company, your death dissolves it. Article 306(1) of the Commercial Companies Law says a One Person Company “shall be dissolved upon the death or termination of the founding natural or legal person”, and saves it only if the heirs decide to continue it and select a person to manage the company on their behalf within six months of the date of death. A company with two or more partners is in a completely different position: under Article 307 a partner’s death does not dissolve it at all.
This guide sets out what actually happens to a UAE company, its license and its shares when an owner dies, how the outcome changes with the legal form and with the free zone, what a memorandum of association can be made to say in advance, and what a business owner can put in place now so the entity does not stall while an estate is being settled.
The Outcome Depends Entirely on the Legal Form
There is no single answer to what happens to a UAE business on death. The Commercial Companies Law treats a sole-owner company, a multi-partner company and a partnership as three different problems, and free zone companies are carved out of the federal law altogether.
| Structure | Effect of the owner’s death | Article |
|---|---|---|
| One Person Company, mainland | Dissolved, unless the heirs decide to continue it after adjusting its legal position and select a manager within 6 months | Art. 306(1) |
| Limited liability company with partners | Not dissolved, unless the MOA says so. The partner’s share transfers to the heirs, and a legatee counts as an heir | Art. 307 |
| General partnership | The amount payable for the deceased partner’s stake becomes a debt, due at dissolution or at the date of death, whichever comes first, unless the partners agreed otherwise | Art. 57 |
| Free zone company | Governed by the free zone’s own rules wherever it has a special provision on the point | Art. 5(1) |
The Six-Month Clock on a One Person Company
This is the provision that surprises the most owners, because a One Person Company is the standard structure for a solo consultant, agency or trading business on the mainland, and its default outcome on death is dissolution rather than inheritance.
Read Article 306(1) closely and it does three things. It dissolves the company on the death of the founding natural or legal person. It then carves out an exception where the heirs decide to continue it, conditional on adjusting the company’s legal position in accordance with the decree law. And it puts a hard deadline on the surviving family: they must select a person to manage the company on their behalf within six months after the date of death.
Six months is a short window for a family that may be abroad, that may need a succession certificate from a UAE court first, and that may not even know the company exists. That is the practical case for keeping a current corporate file where the family can find it, alongside the personal documents covered in our UAE expat emergency document checklist.
Article 306(2) is worth noting in the same breath, because it cuts the other way: an owner who liquidates the company or suspends its activities in bad faith before its term expires becomes liable for its obligations from his own assets. Winding a company down quietly is not a costless option either, and the orderly route is set out in our guide to liquidating a mainland company in Dubai.
A Partner’s Death Does Not Dissolve an LLC
Article 307 provides that the death of a partner in a limited liability company, or his withdrawal by a judgment of interdiction, bankruptcy or insolvency, “shall not lead to its dissolution unless so provided for in the Company’s MOA”, and that the partner’s share transfers to his heirs, with a legatee treated as an heir.
Two things follow that matter to the surviving partners as much as to the family.
First, the heirs become your co-partners by operation of law. They may be several people, they may be minors, they may live in another country, and they inherit the voting rights attached to the stake. A two-partner business can find itself with four owners who have never met each other, which is where the disputes covered in our guide to shareholder rights and LLC disputes in the UAE usually begin.
Second, the words “unless so provided for in the Company’s MOA” are an invitation. The default can be changed, but only in the constitutional document, and only in advance.
What the Memorandum Can Be Made to Say in Advance
Article 14(4)(b), added to the Commercial Companies Law by the 2025 amendment, expressly lets partners in a limited liability company and shareholders in a private joint stock company include in the memorandum or articles “a provision regulating the mechanism for dealing with the stakes or shares of a deceased partner or shareholder, including granting the other partners or shareholders or the Company itself a pre-emptive right to purchase those stakes or shares at the price agreed upon with the deceased’s heirs”. Where there is disagreement on price, the same article sends the valuation to the competent court, which appoints one or more experts with technical and financial experience in the subject matter of the stake.
That is the single most useful planning tool in this area, and it solves the problem from both sides at once. The surviving partners get certainty that they can buy the stake rather than acquire unknown co-owners. The family gets a defined route to cash rather than a minority holding in a private company they cannot sell.
Two mechanical points. Article 14(1) requires the memorandum and any amendment to be drafted in Arabic and attested by the competent authority, failing which it is null and void, and where there is also a foreign-language version the Arabic prevails. And the provision has to be in the document before it is needed, which usually means amending the MOA at the same time as any other change, such as the share transfers described in our guide to adding a partner to an existing UAE company.
Free Zone Companies Follow Their Own Rules
Article 5(1) states that the Commercial Companies Law does not apply to companies established in the free zones of the State “with respect to matters for which a special provision is stipulated in the laws or regulations of the concerned free zone”. Succession on death is exactly the kind of matter a free zone regulates for itself.
So the six-month rule in Article 306 is a mainland rule. A single-shareholder company in a free zone may face a different default, a different deadline, or a requirement to notify the authority within a set period. The free zone registries do not publish consolidated succession policies in a form that can be retrieved and cited, so this is a question to put to the specific authority in writing, ideally while the owner is alive and can ask it himself. The cancellation route, if the family decides not to continue, is covered in our guide to free zone license cancellation and liquidation.
Who Actually Inherits the Shares
The Commercial Companies Law says the stake passes to the heirs. It does not say who the heirs are. That is decided by inheritance law, and for expatriates the answer changed materially in 2022.
For a Muslim owner, Sharia rules of distribution apply, as set out in our guide to Sharia law and property inheritance in the UAE. For a non-Muslim owner, Federal Decree-Law 41 of 2022 provides a default split and a right to opt for home-country law, which our guide to non-Muslim inheritance law in the UAE covers in full. Company shares are movable assets, so they sit inside that framework rather than in the real-estate carve-out that complicates property.
Whichever regime applies, the company registry will want proof of who the heirs are before it moves a stake, and that proof comes from a court. Expect the corporate step to wait on the estate step, which is the same sequencing problem families meet with a UAE bank account after death.
The DIFC Business Owners Will, and Its Built-In Trap
The DIFC Courts run a dedicated will for exactly this asset class. Their Wills FAQ states that the Business Owners Will “enables eligible Testators to cover up to five (5) separate shareholdings that they may own in any free zone and UAE onshore company situated within the UAE”. The requirements are that you are not Muslim and have never been a Muslim, and that you are at least 18 years of age. The DIFC Courts also confirm that you do not need to be a UAE resident to register one.
| DIFC Courts will | What it covers | Registration fee | Booking fee |
|---|---|---|---|
| Business Owners Will | Shares in up to five UAE companies, free zone or onshore | AED 5,000 single, AED 7,500 mirror | AED 500 single, AED 750 mirror |
| Full Will | All movable and immovable assets | AED 10,000 single, AED 15,000 mirror | AED 1,000 single, AED 2,000 mirror |
| Property Will | Up to five real estate properties | AED 7,500 single, AED 10,000 mirror | AED 750 single, AED 1,000 mirror |
| Modification of any will | Amending a registered will | AED 550 | AED 55 |
The trap is in the same FAQ, and it catches serial founders. A Property Will, Business Owners Will or Financial Assets Will “can only cover the specific assets that are listed in the Will at the time at which your Will is registered”, and if you acquire a new asset you must “modify your existing Will by preparing and registering a new one”.
In other words, the cheaper asset-specific will goes stale the moment you incorporate another company. An owner who sets up a new entity every eighteen months is either paying to re-register repeatedly, or is better served by a Full Will that catches everything. The comparison between the DIFC route and the local courts is in our guide to registering a will in Dubai, DIFC versus Dubai Courts, and the mechanics of the DIFC registration itself are covered in DIFC wills for expats in Dubai.
What you have to bring
The DIFC Courts require, for a Business Owners Will, “share certificate(s) or other ownership document(s) to demonstrate ownership of the shares or shareholdings included in the Will”, plus two witnesses aged at least 18 with government photo identification who are not beneficiaries or guardians, or the spouses of either. Assembling the share certificates is usually the part that takes the longest, particularly for older free zone entities.
The Practical Freeze Nobody Publishes a Procedure For
The law tells you what happens to the shares. It is much less forthcoming about what happens to the operating business in the weeks after a death, and this is a genuine gap rather than an oversight in this article.
What can be stated from the law is that the corporate entity’s fate is governed by the articles above, and that a sole owner’s death starts a six-month clock on the mainland. What cannot be sourced to any reachable official page is the licensing procedure that follows: no UAE economic department publishes a consolidated procedure for a license, an establishment card or employee visas where the owner has died. Anyone facing this in practice should expect the following sequence and should confirm each step with the relevant authority rather than with a general article:
- The bank will restrict the corporate account when it learns the sole signatory has died, on the same logic that applies to personal accounts.
- The immigration file sits under the establishment card, so the company’s ability to sponsor or renew staff visas depends on that file staying valid. Our guide to the establishment card and the UAE immigration file explains what it controls.
- Employees remain employees of the company, not of the deceased, where the company survives. Where it is dissolved, the employment consequences follow the closure route.
- Renewals of the trade license keep falling due on their own timetable regardless of the estate, as our guide to trade license renewal in Dubai sets out.
Owners who want to remove this uncertainty usually do it with the MOA provision in Article 14(4)(b), a registered will, and a second authorized bank signatory, rather than by relying on anyone at a service center knowing the answer on the day. The wider planning picture is in our guide to estate planning for Dubai investors, and the parallel problem for real estate is in what happens to Dubai property when the owner dies without a will.
Frequently Asked Questions
What happens to a One Person Company in the UAE when the owner dies?
Article 306(1) of the Commercial Companies Law dissolves it on the death of the founding natural or legal person, unless the heirs decide to continue it after adjusting its legal position under the decree law. If they do continue it, they must select a person to manage the company on their behalf within six months of the date of death.
Does the death of a partner dissolve a UAE LLC?
No. Article 307 provides that the death of a partner in a limited liability company does not lead to its dissolution unless the memorandum of association says so, and the partner’s share transfers to the heirs. A legatee is treated as an heir for this purpose.
Can the surviving partners buy out a deceased partner’s shares?
Only if the constitutional documents give them that right. Article 14(4)(b) allows an LLC or private joint stock company to include a provision granting the other partners, or the company itself, a pre-emptive right to purchase the deceased’s stake at a price agreed with the heirs, with the court appointing valuation experts if there is disagreement.
Do the free zone rules follow the six-month rule?
Not necessarily. Article 5(1) disapplies the Commercial Companies Law to free zone companies for matters where the free zone has its own special provision, and succession on death is one such matter. Ask the specific free zone authority in writing, because the registries do not publish consolidated succession policies.
Who inherits shares in a UAE company?
Inheritance law decides, not company law. Sharia rules of distribution apply to a Muslim owner. For a non-Muslim, Federal Decree-Law 41 of 2022 supplies a default split and a right to opt for home-country law, and company shares are movable assets sitting inside that framework rather than in the real-estate carve-out.
What is a DIFC Business Owners Will?
A dedicated DIFC Courts will that covers up to five separate shareholdings owned in any free zone or UAE onshore company situated in the UAE. It is available to a testator who is not Muslim, has never been a Muslim, and is at least 18 years of age, and UAE residency is not required to register it.
How much does a DIFC Business Owners Will cost?
The DIFC Courts fee schedule lists AED 5,000 for a single Business Owners Will and AED 7,500 for mirror wills, plus a booking fee of AED 500 or AED 750 respectively. Modifying any registered DIFC Courts will costs AED 550 plus an AED 55 booking fee.
Does a Business Owners Will cover a company I set up later?
No. The DIFC Courts state that these asset-specific wills only cover the assets listed at the time of registration, and that acquiring a new asset requires modifying the will by preparing and registering a new one. A founder who incorporates frequently should weigh the Full Will instead.
Can heirs run the business while the estate is being settled?
Where the company survives, as with a multi-partner LLC, it continues as a legal person and its managers keep managing it. Where it is a One Person Company, the heirs must decide to continue it and appoint a manager within six months. In both cases the registry will want court proof of who the heirs are before a stake is moved.
What happens to employees and their visas?
Employees are employed by the company, so where the company survives their contracts survive with it, and the company’s ability to sponsor and renew visas depends on the immigration file under its establishment card staying valid. No UAE economic department publishes a consolidated procedure for this scenario, so confirm the position with the licensing authority and the immigration authority directly.
Official Sources
- Federal Decree-Law No. 32 of 2021 on Commercial Companies, Articles 5, 14, 57, 306 and 307
- DIFC Courts, Wills Service frequently asked questions, including the Business Owners Will
- DIFC Courts, fee schedule for the Wills Service
Information current as of August 2026. Every article number was read from the official English text of the Commercial Companies Law published on the UAE Legislation portal, retrieved through an archived copy because the portal blocks automated retrieval, and the DIFC material from the DIFC Courts’ own live pages. Three limitations should be stated. First, the consolidated text does not name the decree that amended it, so Article 14(4) is described here as added by the 2025 amendment on the basis that it does not appear in the original 2021 text; verify the amending instrument before citing it in a document. Second, the English text of the decree law is a translation and the Arabic prevails, so check an article number against the Arabic where it is decisive. Third, no free zone succession policy and no licensing, establishment card or visa procedure for the death of an owner could be retrieved from any official page, so those points are published as an identified gap rather than as guidance.
Disclaimer: This guide is general information, not legal, tax or estate-planning advice. Succession to a business interest depends on the legal form, the constitutional documents, the applicable inheritance regime and the registry involved. Instruct a UAE-licensed lawyer to review the memorandum of association and any will before relying on either.
