Q: My brother was the director of a company in Dubai with 16 per cent shareholding with 5 other partners. They had a general manager who had signing authority. The general manager signed cheques worth AED 7 million and disappeared. My brother lives in Kuwait. What is the impact of the bounced cheque on my brother?

Q: Hello, I hope you're all doing well during this tough time. I have a question in regards to bounced cheques, specifically corporate cheques. I have a cheque for AED 800,000, and it has bounced. The owner of the corporate has asked for a month to pay back. However, I am worried he will leave the country and not honour his obligation. My questions are fairly simple: 1) Am I to put a case on the individual who signed it or the corporate? 1) If I put a criminal and civil case on the corporate right now and he's unable to settle amicably, can I put a travel ban on the owner (who signed) as it is a corporate case? 2) Does the new insolvency law as of late 2019 also apply to corporates? 3) Is the owner personally liable if the company doesn't have assets or cash?

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, 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: My boss started a company in Abu Dhabi. It's a limousine company (100% owned by a local and he rented the license). Suddenly he got a travel ban and he made me the manager of the company and I give him a signed blank company cheque. After Covid, I was in India and couldn't come to the UAE, he has to pay money to the sponsor (Kafeel) for sponsorship and other expenses (he didn't pay one employee's salary so the latter made a complaint, and the sponsor paid in labor court, because my boss not paying). He didn’t pay the sponsor and the company got fined. One of the other employees is helping him and that employee stole the passports of other employees and is not returning them. So the sponsor made a case against that employee. Once I reached the UAE, he bounced the cheque and made a criminal case against me for revenge. The police caught me and I got bail. After 1 year procedure, I closed the criminal case then I went for my visa. I have one civil case too. He made a civil execution case for a cheque bounce against me and the company sponsor. He put the wrong address purposefully.

Q: Dear Sir/Madam, If an outside person is authorized by the board of directors to sign a company's cheque, what is the legal liability of the signatory if the cheque is dishonored, given that they are not an employee of the company?

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.

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.

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 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.