Which company in your group should sign this?

A founder with a UK company and a Dubai entity signs whatever arrives. Which entity signs decides where the money lands, which law governs, who can be made to pay, and whether the covenant behind the deal is worth anything.

The UK–UAE corridor · Part of Legal Counsel Dubai: Outsourced General Counsel for UAE Businesses

A founder with a UK company and a Dubai entity signs whatever arrives. The customer's contract says the supplier is the UK limited company because that is the name on the website. The Dubai office signs the DIFC lease because the landlord asked for the licensed entity. The reseller in Riyadh has an agreement with whichever company the salesperson copied last time. Each decision is sensible on the day. Together they produce a group where the money, the obligations and the assets sit in different places from each other, and nobody planned it.

The choice of signing entity is not administrative. It decides four things: where the revenue lands and how it gets to where you want it, which law governs the deal, which court or tribunal can actually be made to do something, and whether the covenant standing behind the contract is worth anything at all. Getting it wrong is rarely fatal and is almost always expensive to unwind, because unwinding it means asking a counterparty to re-sign something they are happy with.

Which company in the group should sign a contract?

That rule sounds obvious and it is broken constantly, usually in one of two directions. A group signs with the parent because the parent has the balance sheet, and then the parent has obligations it has no staff to discharge and no licence to perform. Or a group signs with the newest and smallest entity because that entity is the one operating locally, and gives a counterparty a promise backed by a company with paid-up capital of very little.

Both are fixable at the drafting stage. A performing entity with a thin balance sheet can sign with a parent guarantee attached, which gives the counterparty the covenant it needs without moving performance to the wrong company. A parent that has the covenant but not the capability can sign and subcontract to the operating entity, provided the contract permits subcontracting and the customer knows. What does not work is choosing one entity and hoping the mismatch never surfaces.

What changes when one of the entities is in the UAE?

The licence point is the one that catches UK founders first, because there is no equivalent in England. A UK company can do almost anything its directors decide to do. A UAE entity does what its licence says it does, in the place its licence covers. A DIFC or ADGM company is licensed for activities inside that financial free zone; a mainland company licensed by the relevant emirate's economic department operates onshore; and a free zone company outside the financial free zones has its own scope again. A contract signed by the wrong entity for the activity described in it is not merely untidy. It is a contract to do something that entity is not licensed to do, which is a poor footing for enforcing it and a worse one for explaining it to a regulator.

The forum point matters because a judgment is only useful where the assets are. A dispute with a UAE counterparty decided by a court in London gives you a judgment that still has to be recognised and enforced where the money sits, and that is a separate exercise with its own requirements. This is why the financial free zone courts are written into so much corridor paperwork. The DIFC Courts apply their own common-law procedural rules and operate in English, and since Dubai Law No. 16 of 2011 parties may agree in writing to submit a dispute to them even where the dispute has no other connection to the DIFC. Arbitration seated in the region is the other common answer. Which of the two is right depends on the counterparty and the value, and it is a decision worth making once for the group rather than repeatedly at the end of each negotiation.

Getting the execution right

Whoever signs, the signature has to bind the company. Under English law the requirements are set out in the Companies Act 2006:

That is the position for a deed. Most commercial contracts are not deeds and can be signed by one person with authority, which is where the real risk lies: the question is not the formality but whether the person had authority at all. In a two-jurisdiction group the answer is often unclear, because the UAE entity has a general manager named on the licence, the UK company has directors, and the person who actually negotiated the deal may hold neither position.

UAE practice adds its own requirements. Powers of attorney are used far more widely than in England, they are notarised, and they are read narrowly: a power to sign leases is not a power to settle a dispute. Corporate documents produced for use in the UAE frequently need attestation and legalisation, which takes time nobody has allowed for. None of this is difficult. It is simply a set of steps that has to be started earlier than a UK founder expects.

The practical rule for a two-jurisdiction group

Write it down once, and make it short enough that a salesperson will follow it.

Customer contracts follow delivery. The entity whose people do the work signs, and invoices. Where the customer needs a stronger covenant, the parent guarantees rather than signs.

Supplier contracts follow use. The entity that consumes the service signs it, so the cost lands where the revenue it supports lands. A single group-wide software licence signed by the parent, used by everyone, is a transfer pricing question waiting to be asked.

Anything touching real property or a licensed activity follows the licence. Leases, permits, regulated activities and anything with a local filing requirement go to the locally licensed entity, with no exceptions.

Intellectual property sits in one place, licensed out. Holding the brand and the code in the entity that happens to have employed the first developer is a problem that grows with the business. Deciding where it lives, and papering the licence to the operating companies, is much cheaper now than at a funding round.

Every flow between entities has a written agreement behind it. Management services, cost sharing, secondments, the IP licence, and any intra-group loan. These are the documents that turn a group into something explicable, and their absence is the single most common finding in corridor diligence.

Holding that list, and the register of which entity signed what, is the ordinary work of an outsourced General Counsel. It is also the reason corporate structuring and the contract register belong together: a structure decided properly and then not followed by the people signing the paper is the same problem as no structure at all. Where the estate is already large, putting every counterparty, value and renewal date in one place through a contract register is usually the first step, because the entity question cannot be answered contract by contract until somebody knows what the contracts are.

Fixing contracts already signed by the wrong entity

Most groups discover this during diligence or during a dispute, which are the two worst moments. The work is not glamorous and it does go quickly once somebody owns it.

Start by listing every material contract against the entity that signed it, and marking the ones where the signatory is not the performer. Then sort those into three piles. The ones that can be left alone, because the mismatch has no consequence and the contract is nearly at its end. The ones that can be fixed at the next renewal, which is most of them, and which cost nothing because a renewal is a negotiation anyway. And the small number that need a novation or an assignment now, usually because they hold the customer relationship that a buyer or an investor will care about, or because the licence point is live.

For the third pile, a novation needs the counterparty's agreement, so the approach matters. A request framed as internal tidying, sent with the document already drafted and nothing else changed, is usually agreed without comment. A request that arrives during a dispute, or alongside other proposed amendments, invites a negotiation you did not want. Where a counterparty refuses, a parent guarantee or a deed of assumption can often achieve enough of the same effect.

Where a specialist is needed

The tax consequences of where revenue lands, of any intra-group charge, and of moving an asset between entities are confirmed by regulated tax advisers in both jurisdictions before anything is executed, and Dinmore Bell coordinates them. Licensing applications and filings in the UAE are made through licensed local advisers. Litigation and arbitration are conducted by instructed solicitors, counsel or UAE-registered advocates. The decision about which entity signs, the drafting, the negotiation with counterparties, and the register that keeps the answer true afterwards are what Dinmore Bell owns. The UK government's overseas business risk guidance for the UAE is a reasonable place for a founder to start on the wider commercial picture.