Sole Establishment

A sole establishment is a business owned by one individual who trades under a licence in their own name — the simplest and cheapest onshore structure in the UAE. Its critical feature is the absence of a corporate veil: the owner and the business are legally the same person, so business debts are personal debts, enforceable against the owner's personal assets, salary and bank accounts. Professional licences for individuals work similarly for service activities. This makes the form attractive for low-risk consulting or trades but dangerous for ventures carrying credit, inventory or contract exposure, where an LLC's liability shield is usually worth the extra cost. Converting a successful sole establishment into an LLC later is possible and common. It matters because many small business owners discover the unlimited liability point only when a dispute or debt arrives. You meet it when choosing your first licence structure, or as a creditor realising the 'company' you contracted with is actually a person.