Q: A Company had issued us several cheques amounting to nearly 600,000 AED. All the cheques had bounced, and we lodged a complaint with the police station. The police after calling for the bank documents and details from the defaulter's bank issued a travel ban. All efforts of the police to trace the defaulter or contact over the phone have been futile. The police have now forwarded the case to the court and asked me to keep track of the dates on the portal. The cheques were signed by the Managing Director of the company. It is important to note that the defaulting Company had violated several terms in the contract, resulting in fraud and criminal conspiracy and breach of trust. Please advise what will be the consequences the defaulter may have to face and how should we go about it.

Q: Do the local sponsors have financial responsibility for bounced cheques from the company that they are sponsored? If I got cheques but they were bounced and the person who signed the cheques (managing director) left the country. Company is in labor zone, retail, 2 operating shops.

Q: I was employed with a company which ran into troubles and stopped paying salaries. I was an authorized signatory and I had endorsed cheques of a third party to a local bank as a signatory. The bank filed a legal case against me, the owner of my company and the person whose cheques they are. It has been 4 months since I resigned, cancelled my power of attorney and mentioned in the resignation to remove my names from all banks. I have moved on and looking for a new job. I have opened a case against my ex-employer for my salaries and gratuity of 7.2 years. I have also placed visa cancellation request and I found out about this case when I was moving to my father's visa. Please advise what I can do, the cheque amount is AED 250k. I need to prove my innocence as I haven't taken the amount nor do I have this kind of amount to pay. I am innocent in simple words. I was just a PA to the owner and was doing my duties while I was there.

Q: Our company account is closed due to cheque bounce. Can we open an account with any other bank?

س: أنا شريك في شركة مقاولات للبناء (فيلا). المدير في الشركة ذات المسؤولية المحدودة كتب شيك وهرب خارج البلاد وأنا شريك 51 ‎%‎. ما هو الإجراء المناسب لمنع حدوث هذا، هل يكتب في الوكالة - عدم كتابة شيكات أو التوقيع و يمنع أخذ قروض بإسم الشركة؟    

Q: I have a 5% partnership in a business (LLC) which is operated by another person who holds a partnership of 44% and the rest 51% is UAE National's share (as required by law). I also have a Partner's Visa from this company. As I am not involved in any decisions or operations of the company, how can I be safe without any risks if the company gets involved in any legal issues like any huge fines for any other irregularities? Will I be liable to pay if there are any fines? If yes, then how much would I be liable to pay? How much percentage would be my Share? Can I make some kind of contract to safeguard myself?

Q: I am working in a tourism company in Sharjah, the 100% ownership is with the sponsor. The company started in March 2019, after 3 years only, to change to LLC as per the license. The sponsor gave me power of attorney to open a bank account so I am signing on cheques and all is going perfectly. My company has 7 partners and they took various letters on the company letterhead and stamped for mutual agreement, and also my 2 blank cheques and one checkbook are with them. Please advise, is there any issue if I quit the company? I want to repay AED 50000 to the company because I paid credit to customers still not received, and I will pay but need few months time to repay the same. They threatened like talking more. Please advise and how can you help

Q: 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!

Q: Dear Sir/Madam, If an outside person is authorized by the board of directors to sign a company's cheque, what is the legal liability of the signatory if the cheque is dishonored, given that they are not an employee of the company?

In the UAE, cheque bounce is a very frequent problem faced by people during their span in the country. It is covered under the purview of Commercial Transactions Law, and legal implications/penalties can be financially severe and daunting for more “serious” offenses. Bounced cheque issues may arise in a variety of commercial transactions, including but not limited to, companies’ exchanges, bank loans, property rents or purchases, and individual transactions.

The provisions of this Law apply to the commercial companies established in the UAE and the foreign companies that have established in the UAE a base to conduct any activity therein or established a branch or representative office. The Law abrogates Federal Law No. (8) of 1984 Concerning Commercial Companies.

The provisions of this Decree by Law amend the Federal Law No. (18) of 1993 by replacing Clause (4) of Article (379) as well as Articles (600), (617), (641), (642), (643), (644), and adding new articles numbered (635) Bis, (641) Bis (1), (641) Bis (2), (641) Bis (3), (641) Bis (4), (643) Bis (1), (643) Bis (2), (644) Bis (1) and (644) Bis (2). The Decree-Law also repeals Articles (401), (402) and (403) of the Federal Law No. (3) of 1987.