What are the legal consequences of my partner's voluntary withdrawal from our company?

Hello,

According to UAE law, a partner can voluntarily withdraw from a company at any time, as long as the withdrawal is in accordance with the terms and conditions set out in the company's Memorandum of Association (MOA) and Articles of Association (AOA).

The MOA and AOA should outline the procedures for a partner's withdrawal, including the distribution of assets and liabilities.

If the company has not generated any income or revenue since its establishment, the partner's withdrawal may not have a significant impact on the company's operations. However, it is important to follow the proper procedures for the withdrawal to ensure that all legal requirements are met.

The partner who is withdrawing may need to provide a written notice to the other partners and the company's management, stating their intention to withdraw and the reasons for doing so.

The remaining partners may then have the option to buy out the withdrawing partner's share in the company.

If the withdrawing partner has invested any capital into the company, they may be entitled to receive a portion of the company's assets or profits, depending on the terms outlined in the MOA and AOA.

Hello,

If a partner voluntarily withdraws from a company in the UAE, this must be done in accordance with the terms agreed upon in the company's articles of association or partnership agreement.

If the procedures for partner withdrawal are not specified in these documents, the UAE Companies Law (in accordance with the UAE Commercial Companies Law) governs this matter.

Upon the withdrawal of a partner, the withdrawing partner must follow the necessary legal procedures related to terminating their participation, including amending the company's official records and notarizing this change with the Department of Economic Development or the relevant authority in the emirate.

If there are no revenues or income to date, this does not directly affect the legality of the partner's withdrawal, but it may affect how any dues or distribution of profits or losses (if any) are calculated.

The withdrawing partner must also determine how to settle their dues or share in the company, if any money is owed to them from their time in the company.

If there is no income or revenue from the company after its incorporation, the partners in the company may have to make decisions regarding the future of the company and restructuring, whether by closing or continuing operations based on future business plans.

Dear Inquirer,

Regarding your partner's voluntary withdrawal from the company, the legality and procedures depend on the terms outlined in your partnership agreement and the UAE Commercial Companies Law.

If no income or revenue has been generated, the situation will largely be governed by the agreement you both signed, which should address withdrawal, asset division, and liability for expenses.

Key Points:

- Withdrawal Procedure:

If your partnership agreement allows for voluntary withdrawal, the company’s legal structure and the responsibilities of the withdrawing partner should be followed. Her removal as Manager should be officially recorded with the relevant authorities.

- Expenses and Contributions:

If the agreement specifies shared costs (such as the AED 33,000 setup fees), your partner may be entitled to a refund, but only if clearly stated in the agreement. In the absence of a clear provision, the situation can be negotiated based on fairness and the company's financial status.

We recommend scheduling a consultation with our office to review your partnership agreement and guide you through the appropriate legal procedures.

Book your consultation with us today!

Dear Questioner,

Thank you for your inquiry!

In response to your partner’s voluntary withdrawal from the company, here are the key legal considerations:

- Review Partnership Agreement/MOA:

Check if the company’s partnership agreement or Memorandum of Association (MOA) outlines specific steps for partner withdrawal. If none, general UAE law applies.

- Amend Company Documents:

After the withdrawal, the company’s trade license and MOA must be updated with the Dubai Department of Economic Development (DED).

- Settlement of Financial Interests:

Even without income, any capital contributions or outstanding liabilities must be addressed and settled.

- Liabilities and Assets:

Ensure that all liabilities are cleared, and the distribution of any company assets is agreed upon.

Next Steps:

- Formalize the withdrawal in writing.

- Amend the MOA and shareholding structure.

- Update records with relevant authorities.

Please let me know how you'd like to proceed or if you require further assistance.

Best regards,

Mohammed Salah

Legal Consultant

Hello,

Since your company has not generated income or revenue yet, you may not have much to settle financially.

However, depending on the agreement, you may need to assess the company’s assets, liabilities, and any investments made to determine if there is any amount due to your partner for their share or ownership.

If your company is a Limited Liability Company (LLC) or other partnership structure, the company's MOA must be amended to reflect the change in ownership and remove the withdrawing partner.

If your company is being dissolved (e.g., if there is no income, no revenue, and no future plans), a liquidation process may be required. This involves settling any outstanding debts, if applicable, and formally dissolving the company.

Hello,

Thank you for reaching out! I hope you are doing well.

Regarding your situation, we can help you understand the legal aspects of your partner’s voluntary withdrawal from the company you established in Dubai.

Given that the company was established in July 2024 and has not yet generated any income or revenue, we can assist in guiding you through the process of formalizing the withdrawal, ensuring that all legal requirements are met, and advising you on any obligations regarding ownership, liabilities, or financial settlements.

Please feel free to contact us at [------------] or via email at [------------]. We are here to help!

Hello!

The legality of your partner’s withdrawal depends on your company’s structure and agreements. You’ll need to follow the formal withdrawal process, address any financial settlements, and update the relevant documents with the authorities to ensure everything is legally compliant.

You can reach out for further discussion and appropriate guidance at [----------].

Thanks!

Dear,

A partner's withdrawal from the company must comply with the terms of the company's articles of association. If it violates the articles of association, the remaining partners may seek compensation from the partner.

If anything else is required, don’t hesitate to contact us via email at [------------] or call our offices in Dubai at [------------] or Sharjah at [------------].

Under UAE law, if a partner voluntarily withdraws from a company established in Dubai, the legal procedures for documenting the withdrawal and updating the company's records must be followed.

If there is no income or revenue, some legal obligations related to the company may still apply.

Our legal center specializes in such cases, and you can contact us via WhatsApp for more details and legal support.