Questions & Answers
Am I legally liable for my partner’s fraud if he misused company invoices and took money from clients?
Hello,
My partner, without my knowledge, has been taking money from people on behalf of the company and issuing company invoices to them without completing their work.
I own 50% of the company shares, and he owns the other 50% and is listed as the manager on the license. It is an LLC company.
Am I responsible for his fraudulent transactions with those people? What is the legal way to protect myself?
Hello, dear.
In this case, the best legal solution is to file an accounting case. You can legally protect yourself, as you are responsible as a 50% partner.
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In a UAE LLC (Limited Liability Company):
Each partner’s liability is limited to their share in the company’s capital, not personal assets — unless there is fraud or negligence proven against you personally.
However, since your partner used company invoices, victims may initially hold the company responsible — even if you weren’t aware.
As a legal step and to protect yourself, you may, through your lawyer, notify the affected clients that you were not involved in the issuance of the invoices or in the related work process.
You should also formally notify your partner that he acted without your knowledge or authorization.
For accurate and appropriate legal advice, please contact us at: [-------------].
Be advised that in a UAE LLC, each partner’s liability is generally limited to their share. Since your partner acted without your knowledge, you are not automatically personally liable for his fraudulent actions.
To protect yourself, document all evidence, file a police report stating your non-involvement, notify clients and banks of unauthorized transactions, and consider updating the company’s internal approvals to prevent future issues.
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Yes, you will be held liable, and if your partner's bad faith is proven, the liability will extend to your personal financial liability.
