Questions & Answers
Settlement with the local partner and closing company due to loss
Hi,
I am having an LLC company in Abu Dhabi, started in 2013 with 51% local partner and 49% from my side.
Every year I pay AED 14000 to the local partner regardless of the profit or loss. The important point is that the local partner never invested in my firm and it was only in the notary documents (51%).
Now I want to cancel the company due to the loss and local sponsor is asking for AED 50,000 for cancellation which I don't have.
He said I can file a complaint in the police. Also, I have only the paid receipt of the local partner paid amount for the last year.
Kindly advise on the legal aspects of it.
As per the UAE Law, the local sponsor is 51% of the shareholder.
In case the company is facing a loss, you should file bankruptcy. It is tough to fight against the local sponsor. The sponsor fees can not be challenged before any court of law.
Please call us or e-mail us.
Dear Client,
Good day!
Please note that you can liquidate the company. The process is Board meetings to be called with agenda to liquidate the company, followed by a Board resolution.
Then, proceed with Audit and liquidation procedures. You need not pay the sponsor for that.
You may send your documents to confirm our course of action at our email or please feel free to contact us by phone.
Thank you.
