Questions & Answers
The rights of the silent partner when the LLC company is closed
Our Dubai mainland LLC company stopped business due to financial hardships. There is a silent partner who invested AED 400k against a 25% stake in the company.
The partnership is via a share holder's agreement and not a named partnership.
Q1: Can he file a commercial dispute against the managing partner to make him personally liable?
Q2: Can the managing partner compel the investing partner to contribute to the pending dues and expenses to close the company?
Q3: Are any of the cases or judgments criminal in nature? that is, requiring bail or imprisonment?
As per your query, it is an LLC company. The silent partner role was only as an investor and not in the MOA of the company.
If there is a case, then the court will take into consideration only the official contract that is the Memorandum of Association, in rarest of the rare case the court usually considers the side agreement.
As per your question no. 1, we have to see whether he has any visa with the company, whether as per the side agreement, there is any profit sharing. The commercial dispute can be filed; however, it will depend upon the case filing and the court to consider.
As per question no. 2, no, he can not compel.
As per question 3, we have to know the whole facts and need to see the documents, in order to check the criteria.
Please contact me via phone or email.
To answer your questions, please provide us with a copy of the Shareholders Agreement, along with a brief description of what had taken place.
We shall review your file and provide you with our professional fee estimate to handle this matter.
You should file a civil claim in court for your share declaration and you can get your rights after that only.
You can't make any personal liability if you have signed an agreement with the company MD.
For more consultation, we need to check the agreement signed with the company.
You may contact me directly via phone or email for further consultation.
