Can an LLC partner sell their shares to a third party without other partners' consent?

Hello dear questioner,

Firstly, a partner cannot sell their shares without approval or informing the rest of the company of the sale unless there is an agreement in the articles of incorporation allowing it.

Secondly, if you want to leave the company and have sent a notice but did not receive a response, we can file a withdrawal lawsuit.

For further discussion, please share your WhatsApp number.

The consent of all parties is necessary.

Dear Client,

In a Dubai Mainland LLC, a partner cannot sell their shares to a third party without the consent of the other partners, as stipulated by the UAE Commercial Companies Law.

If a partner wishes to exit and the other shareholders are unresponsive or withholding permission, the exiting partner can escalate the matter by issuing a formal notice via registered mail or a notary public.

For more details, kindly contact me at [--------].

Regards,

Jui Dongare

Senior Legal Manager

MBG Legal Service

Dear Questioner,

According to UAE law, a partner in an LLC company can sell their shares to a third party without the consent of other partners, unless there is a specific clause in the company's articles of association that states otherwise.

However, the other partners have the right of first refusal, meaning they have the right to purchase the shares before they are sold to a third party.

If one partner wants to exit the company and the other shareholders are not responding or giving permission, the first step would be to try and negotiate with them and come to an agreement on the sale of the shares.

If this is not possible, the partner who wants to sell their shares can file a case with the court to force the other partners to buy their shares or allow the sale to a third party.

Hello Sir,

According to UAE law, a partner in an LLC company (Dubai Mainland) cannot sell their shares to a third party without the consent of the other partners in the company.

This is because an LLC company is a joint venture between partners and all partners have equal rights and responsibilities in the company.

If one partner wants to exit the company and the other shareholders are not responding or giving permission, the first step would be to try and negotiate with the other shareholders and come to an agreement on the sale of shares.

If this is not possible, the partner who wants to sell their shares can file a case with the court to request the dissolution of the company or the sale of their shares.

In this case, the court will appoint a valuator to determine the value of the shares and the other shareholders will have the right to purchase the shares at the determined value.

If they do not exercise this right, the shares can then be sold to a third party.

It is important to note that the process of selling shares in an LLC company can be complex and it is recommended to seek legal advice.

Feel free to contact us via phone or WhatsApp at [--------] to discuss this in detail.

Warm Regards,

Dear Questioner,

According to the Commercial Procedures Law, you must send a notice to hold a shareholders or partners meeting.

Then a resolution must be issued by the board of directors and after that, you must go to court to request a court order to exclude him as a partner.

Dear Questioner,

As a specialized lawyer, here is the professional advice according to the UAE Commercial Companies Law (Federal Law No. 2 of 2015 and its amendments):

A partner in a Limited Liability Company (LLC) in Dubai cannot sell their shares to a third party without the consent of the other partners.

If a partner wishes to exit the company and the other partners are neither responding to this request nor giving permission, the following steps can be taken:

- Formal Notice:

Send a formal notice to the other partners via registered mail or through a notary public, informing them of the intention to sell the shares.

- Right of First Refusal:

If the partners do not respond within the stipulated period (usually 30 days from the date of the notice), the partner has the right to offer the shares to the other partners under the same terms as offered to the third party.

- Mediation:

Attempt to resolve the issue through commercial mediation to reach an agreeable solution for all parties involved.

- Legal Action:

If there is still no response and the partner is unable to sell their shares, they may proceed with legal action in the relevant courts to enforce their rights.

If you need further clarification, kindly share your WhatsApp number.

Dear Questioner,

Thanks for your inquiry!

Regarding the above, we would like to inform you that:

1. Share Transfer Rules:

- Consent Needed: Typically, selling shares in an LLC requires the approval of other shareholders, as outlined in the company’s Articles of Association and UAE Companies Law.

2. If Other Shareholders Are Unresponsive:

- Review Documents: Check the Articles of Association for procedures on share transfers and dispute resolution.

- Formal Request: Ensure your request to sell is documented and sent according to company procedures.

- Seek Mediation: Consider mediation or arbitration if informal attempts fail.

3. Legal Action:

If needed, file a complaint with the Dubai Courts, with guidance from a lawyer.

Kindly do not hesitate to contact us via email in order to help you understand your options and take appropriate action regarding the sale of your shares.

Greetings,

Thank you for reaching out with your inquiry regarding the sale of shares in an LLC in Dubai Mainland!

In an LLC, the transfer of shares to a third party typically requires the consent of the other partners, as outlined in the company's Memorandum of Association (MoA).

If a partner wishes to exit the company and the other shareholders are not responding or providing the necessary consent, there are legal steps that can be taken to resolve the situation.

Firstly, it is essential to review the MoA to confirm the procedures and requirements for share transfers.

If the MoA is silent or unclear on this matter, Dubai's Commercial Companies Law provides that existing partners generally have the right of first refusal, meaning they have the opportunity to purchase the shares before they can be sold to an external party.

Given that the other shareholders have not responded to your notification, the next step would be to formally follow up and, if necessary, take legal action to enforce your rights.

This could involve notifying the relevant authorities or seeking mediation or arbitration, depending on the specifics of your MoA and the situation.

I can assist you in reviewing your company's MoA, advising on the best course of action, and representing you in any legal proceedings if required.

To discuss this matter in more detail and explore how I can help you, please feel free to reach out to me via WhatsApp, phone, or email.

Looking forward to assisting you further.

Best regards,

Suhail Rana