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Limited liability in the Abu Dhabi Global Market is the English-law default, and it is defeasible not by a closed statutory list but by a developed body of statutory and common-law routes that the jurisdiction imports and enacts together.
Limited liability in the Abu Dhabi Global Market is the English-law default, and it is defeasible not by a closed statutory list but by a developed body of statutory and common-law routes that the jurisdiction imports and enacts together.
A company incorporated under the Companies Regulations 2020 is a body corporate from registration (Companies Regulations 2020, section 13(1), current as at 5 July 2026), and its members’ exposure is capped by the form chosen: liability limited to the amount unpaid on their shares if limited by shares, limited to the amount they undertake to contribute on a winding up if limited by guarantee, and uncapped if the company is unlimited (section 2). That much mirrors the federal position and every general treatment. The operative content is where the cap gives way, and in the ADGM it gives way through three routes rather than a schedule of triggers: the directors’ duties the Regulations codify and the provision that voids any attempt to contract out of them (sections 160 to 167 and 219); the English common law, including the doctrine on when a court will look behind separate personality, which applies as ADGM law in its own right (Application of English Law Regulations 2015, section 1(1)); and the statutory liability for wrongful and fraudulent trading that attaches when a company is run into insolvency (Insolvency Regulations 2022, sections 252 and 251).
The contrast with the federal Commercial Companies Law is the point of this piece, and it is a contrast of method, not of destination. The federal statute caps liability by form and returns it through specific enumerated conditions, and it leaves open whether a court can reach a member beyond those conditions, a question its civil-law setting answers, if at all, through the Civil Transactions Law’s abuse-of-rights doctrine. The ADGM reaches a similar set of destinations, personal liability for a director’s own wrong, personal liability for trading a company on into insolvency, and disregard of the company in cases of abuse, but it reaches them by transplanting English company and common law wholesale. The residual question the federal piece had to leave open is, in the ADGM, largely answered.
The Regulations set the caps in one section and confer personality in another, and a reader should hold the two apart.
Section 2 defines the liability worlds. A limited company is one whose members’ liability is limited by its constitution, either by shares, where liability is limited to the amount unpaid on the shares, or by guarantee, where it is limited to the amount the members undertake to contribute to the assets of the company in the event of its being wound up (Companies Regulations 2020, sections 2(1) to 2(3), current as at 5 July 2026). A company with no limit on members’ liability is an unlimited company (section 2(4)). The guarantee cap repays attention because it is contingent by design: the guarantee member pays nothing while the company is a going concern and owes the guaranteed amount only on a winding up, so the “cap” is a deferred contribution rather than a paid-in buffer. A company cannot be both limited by guarantee and have a share capital, and a constitution that tries to divide a guarantee company into shares is read as creating share capital, turning the company into one limited by shares (section 4). The private, public and restricted-scope distinctions sit in section 3; the restricted-scope company, available only to a subsidiary of a group that publishes consolidated accounts, a subsidiary of a body incorporated by UAE federal or Emirate law, or a wholly owned family or single-founder vehicle (section 3(4)), carries reduced disclosure rather than any change to the liability cap.
Separate personality is conferred by section 13. On registration the members are a body corporate by the company’s name, capable of exercising all the functions of an incorporated company (sections 13(1)(a) and (b)). This is the statutory footing for the separation between a company and those behind it, and in the ADGM it is reinforced by the common-law principle in Salomon v A Salomon & Co Ltd, which applies as part of ADGM law under the Application of English Law Regulations examined in Section III. The Regulations also mark their own boundary against the federal regime: they disapply the federal companies statute to companies formed under them, and as of the 2025 amendment that disapplied instrument is Federal Decree-Law No. 32 of 2021, the Commercial Companies Law, replacing the reference to the older Federal Law No. 8 of 1984 (Companies Regulations 2020, section 1, as amended by the Companies Regulations (Amendment No. 1) 2025, item (5), current as at 5 July 2026). The same federal statute the companion article analyses is the one the ADGM expressly switches off for its own companies, which is the first marker of the cross-framework seam Section VII returns to.
The feature that reorganises the whole question is that the ADGM did not draft a self-contained private law. It transplanted English law.
The common law of England, including the principles and rules of equity, as it stands from time to time, applies and has legal force in, and forms part of the law of, the ADGM, so far as applicable to the ADGM’s circumstances and subject to any modifications those circumstances require (Application of English Law Regulations 2015, section 1(1), current as at 5 July 2026). Two qualifications sit on that transplant and both matter. First, it is subject to any contrary provision in Abu Dhabi law or an ADGM enactment, and on any conflict the Abu Dhabi law or ADGM enactment prevails (sections 1(2) and 2(2)). Second, where common law and equity conflict, equity prevails (section 3(1)). The practical effect is that the entire, continually updated body of English common law is ADGM law, subject only to being overridden by a specific ADGM enactment, and the ADGM Court of Appeal has confirmed, in the reported AC Network Holding v Polymath Ekar proceedings, that ADGM judges are bound to apply it.
Two points of precision follow, and both are drawn from the loaded text rather than assumed. First, the transplant of English common law is not a transplant of English statutes. The Application of English Law Regulations apply named English Acts only to the extent set out in their Schedule (section 2(1)), and that Schedule lists older commercial statutes such as the Partnership Act 1890 and the Limited Partnerships Act 1907; it does not list the UK Companies Act 2006 or the UK Insolvency Act 1986. The ADGM instead enacted its own Companies Regulations and Insolvency Regulations modelled on those Acts, so the UK statutes are the template rather than applied law, while the common-law doctrines, including the doctrine on separate personality and its limits, apply directly. Second, because the common law applies “as it stands from time to time,” a later development in the English authorities becomes ADGM law without any local re-enactment, which is a live refresh mechanism built into the system rather than a periodic amendment. The consequence for this article’s question is that the English doctrine on when a court may look behind a company, examined in Section VI, is available in the ADGM as a matter of ADGM law, not as a foreign comparator.
The Regulations put a set of duties on directors, owe them to the company, and then forbid the company from contracting them away. This is the first route by which a person behind the cap answers in person.
The general duties are codified in sections 161 to 167: to act within powers, to promote the success of the company, to exercise independent judgment, to exercise reasonable care, skill and diligence, to avoid conflicts of interest, not to accept benefits from third parties, and to declare interests in proposed transactions. They are owed by a director to the company (section 160(1)), and the Regulations state that they are based on, and are to be interpreted with regard to, the common-law rules and equitable principles they replace (sections 160(3) and 160(4)). The drafting is, in places, verbatim English law. The duty to promote the success of the company requires a director to act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, having regard to the six listed factors (section 162(1)); that wording matches the UK Companies Act 2006, section 172(1), word for word. The one divergence worth marking sits in the next subsection and is not cosmetic: the ADGM duty is subject to “any rule of law applicable in the Abu Dhabi Global Market” requiring directors in certain circumstances to consider the interests of creditors (section 162(3)), where the UK provision refers to “any enactment or rule of law.” The ADGM version routes the creditor-interest duty through a rule of law, and the rule of law that supplies it is the English common law brought in by the Application of English Law Regulations. That routing is what connects this section to Section V.
The anti-avoidance provision is section 219. Any provision that purports to exempt a director, to any extent, from liability for negligence, default, breach of duty or breach of trust in relation to the company is void, whether it sits in the articles, in a contract, or anywhere else (sections 219(1) and 219(3)), and an indemnity by the company for such liability is void except for insurance and the two qualifying indemnity categories (section 219(2)). This is the ADGM twin of the federal position the companion article set out, where the Commercial Companies Law voids any clause relieving an officer of personal liability and the Civil Transactions Law voids any condition exempting liability for a harmful act. Three regimes, one rule: the liability that attaches to the role is not disposable by agreement. Nor is it escaped by staying off the register: a shadow director, a person in accordance with whose directions or instructions the directors are accustomed to act (section 147(1)), is caught by the general duties to the extent the underlying common-law rules apply (section 160(5)), though a holding company is not a shadow director of its subsidiary merely because the subsidiary’s directors act on its directions (section 147(3)). The person who runs the company from behind the board answers as the board does.
The second route is the one the federal piece had to leave open, and in the ADGM it is answered by statute. It turns on the moment a company’s interests stop being the members’ interests and become the creditors’.
Section 162(3) is the hinge. While a company is solvent, the duty to promote its success runs to the benefit of the members; as it approaches insolvency, a rule of law requires the directors to consider the interests of creditors, and the Regulations expressly subordinate the members-facing duty to that rule (Companies Regulations 2020, section 162(3), current as at 5 July 2026). The content of that creditor-facing rule is English common law, imported under the Application of English Law Regulations, and its statutory teeth are in the Insolvency Regulations. Wrongful trading is the central provision. Where a company has gone into insolvent liquidation or administration, and at some time before that a person who was a director knew or ought to have concluded that there was no reasonable prospect of the company avoiding insolvent liquidation or administration, the Court may on the office-holder’s application declare that person liable to contribute to the company’s assets (Insolvency Regulations 2022, sections 252(1) and 252(2), current as at 5 July 2026). The standard is both objective and subjective: the facts a director ought to have known, the conclusions he ought to have reached and the steps he ought to have taken are those of a reasonably diligent person having both the general knowledge and experience reasonably expected of someone carrying out his functions and the knowledge and experience that director actually has (section 252(4)). There is a defence, and it defines the safe conduct: no liability if, after the director first knew or ought to have concluded there was no reasonable prospect of avoiding insolvent liquidation, he took every step to minimise the potential loss to creditors that he ought to have taken (section 252(3)). Shadow directors are within the section (section 252(6)).
Fraudulent trading sits alongside it and reaches wider in who it catches and higher in what it requires. Where any business of the company has been carried on with intent to defraud creditors or for any fraudulent purpose, the Court may declare that any persons who were knowingly parties to carrying on the business in that manner are liable to contribute to the company’s assets (Insolvency Regulations 2022, section 251, current as at 5 July 2026). Wrongful trading catches only directors and turns on unreasonable optimism; fraudulent trading catches anyone knowingly party to the fraud and turns on dishonest intent. Both are statutory contributions to the estate for the benefit of creditors rather than enforcement of a pre-existing debt, and both have been litigated in the ADGM: the widely reported NMC Healthcare administration produced wrongful and fraudulent trading claims of this kind against former directors. This is the concrete sense in which the ADGM answers the federal open question. Where the Commercial Companies Law leaves “conduct in the vicinity of insolvency” to be argued through the Civil Transactions Law’s general principles, the ADGM supplies a purpose-built statutory liability keyed to the moment a reasonable director should have stopped.
The third route is the one that most resembles what the federal piece called the residual question: whether a court can set aside separate personality itself. In the ADGM the answer is a body of English case law that applies as ADGM law.
The starting point is Salomon: a company is a distinct person from its members, and the cap in section 2 and the personality in section 13 are the statutory expression of that separateness. The limit on the principle is the doctrine on when a court may disregard the company. In its leading modern English statement the doctrine distinguishes cases where a company is interposed to conceal the true actor, where a court looks at the reality without disturbing the company’s separateness, from the narrower cases where a person under an existing legal obligation interposes a company to evade it, where a court may look behind the company to hold that person to the obligation (the concealment and evasion distinction drawn in the leading English authority, Prest v Petrodel Resources Ltd). Because English common law applies as ADGM law under section 1(1) of the Application of English Law Regulations, this doctrine is available to the ADGM courts directly, and the courts have engaged with veil arguments in practice, including in the reported AC Network Holding proceedings, where a shareholder was said to have acted through a corporate veil to expropriate shares.
The distinction to hold, and it is the same distinction the federal piece drew, is between reaching a person for his own wrong and disregarding the company. The directors’ duties in Section IV and the trading liabilities in Section V do not disregard the company at all; they impose a personal liability on an individual for his own conduct while the company’s separateness stays intact. Only the veil doctrine in this section actually sets separateness aside, and English law keeps it narrow, confined in its evasion form to the enforcement of existing obligations that a company was interposed to defeat. So the ADGM reader arrives where the federal reader arrived, at a distinction between personal liability for wrongdoing and true disregard of the company, but with a developed and continually updated body of authority filling the space the federal text left open.
Two questions remain that the liability architecture alone does not answer: who is behind the company when the register and the reality diverge, and which regime governs when a structure straddles the ADGM and onshore.
On the first, the ADGM does not leave the gap the federal analysis had to flag. The Beneficial Ownership and Control Regulations 2022 require every ADGM person to ascertain and record its beneficial owners, meaning in the ordinary case any natural person who owns, directly or indirectly, 25 percent or more of the shares, or who otherwise controls the company, with a fallback to the senior officer where no such person is identified (Beneficial Ownership and Control Regulations 2022, Schedule 1, paragraphs 1(1) and 1(1A), current as at 5 July 2026). The nominee is addressed head-on: a director under an obligation to act in accordance with another’s directions or wishes is a nominee director, and the company must identify and record the person on whose behalf the nominee acts (section 3, as renumbered by the 2026 amendments). Shares held by a nominee are treated as held by the person for whom they are held, not by the nominee (Schedule 1, paragraph 10), and a company may not register a share transfer without a statement identifying any new beneficial owner it produces (section 4(8)). So where the federal analysis could only note that whose name sits on the register and who bears liability are distinct questions, the ADGM instrument forces the true party onto a maintained record and gates the share transfer on disclosure. The full architecture of that regime, its filing duties, the Registrar’s powers, the trust and foundation tests and the offences, is the subject of the companion article on the Beneficial Ownership and Control Regulations; the point here is only that the nominee seam the liability rules leave open is closed by a dedicated disclosure regime rather than left to inference.
On the second, the conflict is real and should be named rather than resolved. An ADGM company takes its incorporation, its personality and its internal liability architecture from the Companies Regulations and the English law behind them, not from the federal Commercial Companies Law, which the Regulations expressly disapply (Section II). The federal law reattaches when such a company operates onshore through a branch or establishment, on the seam the companion article identified in the Commercial Companies Law. Where a creditor or an office-holder can sue, and therefore which regime’s rule reaches a controller, turns on the forum and the law of incorporation, and the ADGM’s own case law shows the stakes: the continuation of a company into the ADGM has been treated as a change of the law of incorporation rather than a transfer of assets, so that the ADGM’s trading liabilities could reach conduct pre-dating the continuation, as in the reported NMC proceedings. A structure that places an operating company onshore and a holding or financing entity in the ADGM therefore sits under two liability regimes at once, a civil-law one with enumerated triggers and an English-law one with duties, trading liabilities and a veil doctrine, and the two are satisfied on different terms. Naming that divergence, rather than assuming one regime governs throughout, is the analysis a cross-border structure actually requires.
Most of this architecture is settled, and it is settled in the primary text. The caps and the personality are settled (Companies Regulations 2020, sections 2 and 13). The codified duties, their being owed to the company, and the voiding of any attempt to contract out of them are settled (sections 160 to 167 and 219). The wrongful and fraudulent trading liabilities are settled and have been applied in the ADGM courts (Insolvency Regulations 2022, sections 252 and 251). The transplant of English common law, including the doctrine on looking behind a company, is settled at the level of the enabling provision (Application of English Law Regulations 2015, section 1(1)). And the disclosure regime that closes the nominee seam is settled (Beneficial Ownership and Control Regulations 2022).
What is open is narrower than in the federal analysis, and it is open in a different way. The veil doctrine is available, but whether a court will disregard the company on a given set of facts is a question of judicial application of a deliberately narrow doctrine, not of the enabling text, and it should not be assumed resolved in either direction. The creditor-facing content of section 162(3) is English common law, which means its precise boundaries move with the English authorities rather than sitting fixed in an ADGM enactment. And the two case-based points this article relies on, the ADGM courts’ treatment of veil arguments and of the trading liabilities, are drawn from practitioner reporting of the relevant litigation and should be pinned to the judgments before they are relied on.
What is moving is the frame around the architecture rather than the architecture itself. The Companies Regulations were amended in 2025: the amendment repointed the disapplied federal instrument to the Commercial Companies Law, reformatted the fines regime onto the Administrative Regulations 2025 scale, and deleted the enforcement-notice provisions in sections 251 to 260 of the Companies Regulations, moving that procedure to the Administrative Regulations; none of these touches the liability architecture, and the deleted Companies Regulations sections are the Registrar’s notice procedure, not the wrongful and fraudulent trading sections of the same numbers in the Insolvency Regulations, which remain in force. The Beneficial Ownership and Control Regulations have been amended repeatedly through 2025 and 2026, most recently on renumbering and on the treatment of branches and trusts. And because English common law applies “as it stands from time to time,” the single largest moving part is one no ADGM instrument controls: a development in the English authorities on directors’ duties, on the creditor duty, or on the corporate veil becomes ADGM law when it is decided. A maintained analysis of ADGM liability is therefore, in part, a maintained watch on English case law.
The answer to the question in the title is accordingly the mirror of the federal one. Limited liability under the ADGM Companies Regulations is limited until a director breaches a duty he cannot contract out of, until a director trades a company on past the point where a reasonable person would have stopped, or until a person interposes the company to evade an existing obligation. It is granted by section 2 and section 13, and it is withdrawn by codified duty, by statutory trading liability, and by a common-law veil doctrine that the ADGM imports whole. Where the federal regime leaves the last of these open, the ADGM answers it; and where a structure spans both, the two regimes must be read together rather than one assumed to govern.
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