Questions & Answers
Can partners jointly sign a security cheque?
Dear Ibrahim,
I have an LLC company in Dubai. I have added another person as a partner. It is mentioned In the memorandum of association that we can "jointly and severally" open and close bank accounts in the name of the company and operate such bank accounts and sign cheques.
Does that mean we are authorized to sign on cheques jointly and singly?
I have signing authority in the bank. Now, he wants to take a business to the company. We both will share the loan. My questions are:
A) If I sign the security cheque and it will be bounced in the future, may I be liable for that loan or we both are liable?
B) Can he take a loan without my permission?
C) Can we both sign a security cheque? Is it possible?
I want the liability to be on both of us if we fail to repay the loan.
Please advise me!
Dear Questioner,
if you are signing the security cheque then you have a liability in criminal case, but in criminal case the company as well as both the partners are liable to pay the amount.
for question (b) & (c) - it depends who has signing authority in that perticular bank
kindly contact us at +971 547 929 803 for a detailed discussion or write us at maryamewejdanlawyers@gmail.com for further assistance
Yes, both of you have the right to sign cheques. You have to submit the memorandum to the bank.
If you sign the security cheque, you will be responsible. Any loan for the company has to be a joint decision.
When the words are "jointly and severally", it means that either one person or both can sign the cheque.
Regards,
