أسئلة وأجوبة
Dispute between partners regarding transfer of shares
My husband was awarded shares in the company he works for. Now he is leaving and wants to sell them and the company refuses to acknowledge the fact that he holds shares even though it clearly states that he does in the 'Articles of Association'.
What advice can you give to us? Thanks.
Please note that my response to your question will be purely from an academic point of view based on the limited preliminary information that has been provided. Therefore, it should not be treated as a legal opinion for the want of adequate knowledge and review of relevant documents when read with the applicable laws.
There are certain restrictions in Federal Law No.2 of 2015 regarding the sale of shares. For instance, according to Article 10(1), 51% of the share capital of the company must be owned by UAE national(s) or a company wholly owned by UAE national(s), and Article 10(3) further goes on to state that any transfer of title to any share of a partner that will result in distorting the percentage requirement in Article 10(1) will be considered invalid. Moreover, there can be other restrictions in the Memorandum/Articles of Association and any shareholder agreements.
It is understood from the facts that the remaining partners are not acknowledging your husband as a partner of the company. However, we will need to understand the commercial arrangements and review the Memorandum/Articles of Association, any shareholder agreements and share certificates to determine whether your husband is a partner in the company, and what are the restrictions imposed on him for the transfer of shares.
We would encourage you to call/write to us to further discuss this matter.
