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 am a 49% shareholder in a 10-year-old LLC Company. We have a separate Managing Director that has no shareholding in the company. I was out of the country for an extended period of 5+ months and recently returned to the UAE. 2 weeks after my return, I discovered that salaries had not been paid to staff for the month of July. I queried the Managing Director who was away on annual leave at the time. He told me the company was expecting money in. I then checked with the accountant who told me the company financials were in a dire situation and updated me on receivables and payables. The Managing Director then proceeded to serve 4 weeks notice to resign. After this, I discovered that several company cheques that he had written to suppliers had bounced and were in fact PDC's, some of which had been issued several months ago. My questions are: 1. What recourse do we have against the MD for these liabilities? 2. What would be our best course of action to minimize shareholder liability?

Q: Hi, I am a director and shareholder of a company. I borrowed money from a firm and defaulted. Now the firm is making criminal proceedings against me and my shareholder (who is not a director). Should this be the case?

Q: Dear Sir, I had a General Manager visa from an FZE company in Hamriyah Free Zone. In 2011, the owner of the company fled the UAE due to financial issues. I was not in the UAE at that time as I used to travel once every 6 months only. When I got the news that the owner fled the country, I did not travel on that visa and let the visa expire. I have not been to the UAE after that. I want to come back to the UAE to start a business but I do not know if have an immigration ban or blacklist since my employer fled the country. Can you please advise if the General Manager has any issues if the owner of an FZE company fled the country due to debts? Thanks in advance.

Q: Hello Madam, My question is on a company cheque issued by the previous signatory (last 3 years new signatory, the previous signatory is absconding, not now in license). If this cheque is returned, is it the responsibility of the new signatory or the company?

Q: Hi, My name is in a UAE license as a manager with 0% percent share but with powers to act on behalf of the company. I didn't sign any cheques. The landlord filed a civil case against the company for not paying rent. The owner is not bothered. Anything will happen to me?

Q: Dear sir/madam, Please advise me in regards to my commercial banks! A partial case in Dubai Courts in which my company (first defendant) took a property loan from a bank (plaintiff) in January 2015. I had signed all bank-related documents including the personal guaranty form as a manager (second defendant) of the company holding 40% shares along with my partner (third defendant) holding 60% shares in a Free Zone Company. I was asked to resign with immediate effect in December 2016 and left the company completing all necessary handovers of 40% shares to a natural person. I hold all transfer documents attested by the free zone authority and their legal translation which were submitted to the court as a memorandum. Today was my first hearing and the court decided and ended the litigation obligating all defendants jointly and severally to pay the balance amount to the plaintiff and 5% legal interest and attorneys fees. Please advise on the next procedure I can follow to request the court to remove my name. Should I approach the bank?

Q: In 2020, I was the manager of a company that had an office in a free zone in Dubai. At the time, the partners did not have bank accounts/cheques in Dubai, and to make payments, 4 cheques from a third person were provided, who in addition to the 4 cheques, also provided an undertaking letter attached to the lease agreement. We carefully pay this person the amount related to the lease, as well as the value of all cheques. However, this person did not honor the payment of the last cheque. Now the free zone has opened a case against the company for the non-payment of rent. My question is, will the company be held responsible? If the company is held liable, am I as a manager liable in some way? And will I be responsible for paying this personally? The company no longer exists and I am the only partner who still lives here, in addition to having been the general manager.

Q: How to remove a travel ban for a manufacturing company partner in an execution case for guarantee cheques given (got bounced in the company account)? The cheques were given for the investment in a business by an investor and the manufacturing company owner issued security cheques for his investment in the company. An investor without any prior notice (as per the agreement) presented the guarantee cheques, filed an execution case, and got the travel ban. The investor invested AED 400,000 and the company in this time period of 6 months of his investment got investment from other investors and loans from banks and had a loss in the audit report by AED 1.3 Million. What's the solution to remove the travel ban as the company partner has to travel for his business and the solution of clearance of the claim of the investor?

Q: I was punished in Ajman. It was stated in the judgment that the complainant said that I introduced myself as the General Manager of the company and convinced him to make a deal and take a cheque on 27 July 2023. The actual manager of the company was the same as the owner of the company (another person). He made that agreement and gave the cheque on 10 June 2023 not 27 July 2023. I have written this now in my defense paper but how to let the judge know about this point verbally? Please tell me the exact words. I have to tell the translator and he will tell the judge.

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.

In view of the fact that the manager is primarily the point of reference for the company in the business streets, he is generally authorized by a power of attorney provided by the shareholders of the company or via the MOA of the company. In certain cases exceeding the powers given to the manager may make the manager, or the LLC itself, liable, depending on the nature of the manager’s actions.

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.

This Law promulgates the Federal Penal Code (Criminal Law) of the United Arab Emirates. Crimes and chastisement punishments shall be determined in accordance with the provisions of this Law and other penal codes.

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.