As a 51% local sponsor (LLC), can my partner force me off the license?

Dear Client,

Thanks for your question, I hope you are doing well. I will definitely assist you in this matter.

In a UAE LLC with a 51% local sponsor, the local sponsor cannot arbitrarily force the foreign partner off the license.

The partnership is governed by a written agreement, and any attempt to remove a partner would require valid legal grounds and may involve mediation or legal action.

UAE laws protect the rights of foreign investors, and the specific terms of the agreement and circumstances will determine the options available to both parties. Consult with us for guidance based on the specific situation.

For any further legal assistance, you can WhatsApp us. We have an extensive team of knowledgeable and experienced lawyers to provide the legal assistance you need.

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Thanks & Regards

ABDUL WAHIED

No. As a 51% local sponsor in an LLC, your shareholding and presence on the license cannot be removed without your consent.

The UAE Commercial Companies Law does not grant the majority shareholder (your partner) the right to unilaterally remove a minority shareholder.

If you need further clarifications we will provide you the service.

Hello,

As per your query, please note that there are options to liquidate the company and other powers as per the memorandum of the company.

Please email or call us.

Dear Questioner,

Thanks for your inquiry.

Regarding the above, we would like to inform you that, according to UAE law, a 51% local sponsor (LLC) cannot force their partner off the license without a valid reason and proper legal procedures.

The partner has the right to challenge any attempt to remove them from the license and can take legal action if necessary.

If the partner wants to exit the business, they have the following options:

1. Negotiate a buyout: The partner can negotiate with the local sponsor to buy out their share in the company. This can be done through a mutual agreement, and the buyout terms should be clearly stated in a written contract.

2. Transfer their share to another party: The partner can transfer their share to another party, subject to the approval of the local sponsor and the relevant authorities. This can be done through a share transfer agreement and the new party will become the new partner in the company.

3. Sell their share in the company: The partner can sell their share in the company to a third party, subject to the approval of the local sponsor and the relevant authorities. This can be done through a share purchase agreement and the new party will become the new partner in the company.

4. If you want you can appoint us as your lawyer in order to file a case in court against him: If the local sponsor is trying to force the partner off the license without a valid reason, the partner can file a case in court to protect their rights. The court will review the case and make a decision based on the evidence presented.

Please feel free to contact us by email.

Regards,

Under UAE law, a 51% local sponsor in a Limited Liability Company (LLC) has the right to remove a partner from the license.

This can be done through a resolution passed by the company's board of directors or through a court order. The partner may have the following options:

1. Negotiate with the local sponsor: The partner can try to negotiate with the local sponsor and come to a mutual agreement on the terms of their exit from the company. This could include buying out the local sponsor's shares or finding a new local sponsor.

2. File a case in court: If the local sponsor is trying to force the partner off the license without a valid reason, the partner can file a case in court to challenge the decision. The court will review the case and make a decision based on the evidence presented.

3. Transfer the shares to a new local sponsor: If the local sponsor is willing to transfer their shares to a new local sponsor, the partner can negotiate with the new sponsor and transfer the shares to them. This will require the approval of the relevant government authorities.

4. Sell the shares: If the partner is unable to find a new local sponsor or negotiate with the existing sponsor, they can sell their shares in the company to a third party. This will require the approval of the local sponsor and the relevant government authorities.

It is important for both parties to follow the proper legal procedures before taking any action.

Dear Inquirer

We are pleased to serve you and address your inquiries.

Upon reviewing your query, you can refer to the Economic Development Department regarding its administrative procedures in this matter.

Judicially, there are legal reasons stipulated by the law for the termination of companies, such as the fulfillment of their purpose, capital depletion, and other reasons as outlined in the legal texts.

If you require any further clarification and detailed explanations, we offer to provide complimentary consultations to assist you with your legal matters. This can be facilitated through a 15-minute online consultation session.

To schedule your consultation, kindly contact us via email or contact our offices in Dubai or Sharjah.

Please input the code "AE" When requesting the appointment to streamline the booking process.

We appreciate your understanding.

Jasim Al Haddad Law Firm Legal Counsel and Consultations