Questions & Answers
Suing a partner after closing the company due to mutual losses
Dear all,
First of all, thank you for providing help and support to us on these legal matters.
My question is:
Our company had two partners, and we decided to close it a few months ago (certification of deregistration has already been obtained). There were not any special agreements (No cheques, letters, loans, etc.) whatsoever.
After we closed everything, the other partner is claiming that he has lost money and is threatening to sue me. There were not any notifications or special conditions made before closing the company.
Can he come back and ask for compensation for his loss?
We both lost different amounts, and in the end, we both agreed to close the company and we did. So would it be possible that he can ask for anything now?
Thank you in advance for your help!
Kind regards,
Dear Sir,
Many thanks for your inquiry. The response to your question will depend on where the company was formed; in a free zone or the mainland.
The liability of the partners for the company's losses and debts will be determined by local UAE law and any agreements that they have signed between them.
For mainland companies, unless the agreements between the parties show otherwise, the partners will be liable for the company's losses in the same portion as they share the company's profits.
With free zones, I will have to look into the specific free zone regulations where the company was set up.
It is best if you give me a call to discuss the detail further. I would like to see your company's documentation to advise you further.
Kindly contact me via phone or email.
Thank you!
