Q: I guaranteed a bank loan for my company although I'm not a shareholder. The owner guaranteed too but he resides in South Africa. The South African business owes the UAE business AED 850k and the bank loan outstanding is AED 880k. I am owed AED 1000k in unpaid wages/personal loans to the company. Can the bank come after me for loan settlement (payments are currently up to date) if there is a default even though I'm owed more than they are?

Q: I’m a 50% shareholder and director in an FZ-LLC company in Dubai Development Authority. One of our employees made an unpaid salary case against us and won it in court. We have appealed the decision. My partner, the owner of the remaining 50% and a local has his name as the general manager of the company on the license. Since our company is not in a financial position to pay these dues, I want to understand what my maximum liability will be. A quick reading online shows that the court can place travel bans on the general manager and hold him personally liable. Does the liability extend to me as well? Are there any other liabilities?

Q: Good evening I am self-employed having an LLC company. I am inside the UAE and I am going through bad days because: 1) I made a huge loss due to non-payment by my client. I won the case in court and I want to file a case for recovery from the client. 2) Due to the financial case, I was not able to pay the sponsorship fee to the local partner for 2 years. He is threatening now to abscond me. How to check whether he absconded me or not? If he absconded me, then what will happen?

س: بعد التحية، تم إنشاء شركة كبيرة رأس مالها 10.000.000 وكان الكفيل إماراتيًا. صديقي اتفق معه على الكفالة ولكنه لم يكن حريصًا وكان الآخر أذكى وطمع في الشركة فألغى التوكيل الضد الذى بينهما؛ حيث أنه لم يتضمن أن يُلغَى بوجود طرفيه. الآن رفع قضية على صديقي ويطالبه بـ 51% من الشركة إلى جانب أن جميع المعدات مركونة بقالها سنة والشركة متوقفة. يريد إبعاده والاستيلاء على الشركة كلها الآن مع أن كل الأصول والممتلكات باسم الشركة التي دفع مالها كله صديقي المغلوب على أمره.

Q: Is the shareholder liable if a labor court judgment is against the company?

Q: Hello, I was a 25% partner in an LLC company in Dubai that closed in 2019. I was only a partner and not involved in any decision-making or management. When the company closed, it had outstanding VAT to the government, and fines have been accumulating on the amount since then. I would like to know my liability for this.

Q: Dear Sir/Madam, I am a partner of an LLC company with a 33 percent stake in mainland Dubai, along with two other partners who have equal shares. I just want to know if I will be responsible for any payment liabilities of suppliers, or if it will be the responsibility of the company manager, as I am not actively involved in the business.

Q: Dear Lawyers, Is the manager or shareholder liable to pay the debts of a limited liability company? How can a manager or shareholder be exempted from paying the company's debts? Please advise!

Over the years the UAE has become a centre of trade and commerce for the Middle East, thanks to its strategic location, excellent connectivity and extensive services to assist with all aspects of business. According to the World Bank's 2016 report, the UAE has ranked 31st in the global index of ease of doing business. This encourages more entrepreneurs to set up different kinds of business entities in the country.

This Law applies to merchants, as well as to all acts of commerce carried out in the UAE by any person even though he be not a trader. Commercial matters regarding which specific Federal laws are issued shall be subject to the provisions of such laws, and to the provisions hereof which do not contradict with said laws.

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.