Questions & Answers
Changing of local sponsor for a new LLC company
Hi, I have recently started setting up a business (LLC) in Dubai and I have got an MOA already from Dubai Court signed by my local sponsor and myself. At this time of writing, I have waited a month already for my office "legal" Ejari which the PRO said he would arrange for some amount of money but not having a physical office in fact.
I am really confused now why it isn't done yet until now, which as far as I know should not take that long. In fact, I have met the local sponsor without the knowledge of his PRO, gave him AED 2,000 as per his demand and promised he could expedite the process and would do it by himself. Now, the local sponsor is no longer picking my calls.
Question: can I amend my application with another sponsor? I have paid him AED 5,500 as sponsor's fee for 1 year, can I still take that money back?
Dear Sir,
It is an incorrect perception to call your 51% partner only a "local sponsor". You have formed an LLC and under the UAE Company law, your local sponsor holds 51% shares in the company so he is your partner. Secondly, signing the MOA before the notary public is not enough, the same must be submitted to the Department of Economic Development to complete the company licensing/amendment procedure. Lastly, one partner cannot remove another partner unless all parties (all partners of the company) are present before the notary public to sign an agreement to transfer the shares.
Since your company is not yet formed ie IF the trade license is not yet issued (this will be possible upon submission of all documents including EJARI, initial approval and notarized MOA etc.) you can approach the Department of Economic Development and cancel the application. However, if you have gone to the agent who gives you a total package deal (license office and sponsor... as you mentioned the local sponsor is managing the EJARI for you) then in all likelihood they must have submitted your documents or will do so in due course or you are not dealing with the right party.
Nevertheless, if you have the copy of the application or application no., you can approach the Department of Economic Development to cancel it IF the trade license is not yet issued (which I believe it isn't as you still did not get your EJARI). Please note that there is a mobile number registered for the application which in all likelihood will be that of the PRO therefore, you have to instruct the officer of the Department of Economic Development to change the number and to add yours so that only you receive any notification.
Once the trade license is issued then, only with the consent of the partner/s it is possible to remove him (of course other than to approach the court under special circumstances).
If you managed to cancel the application, thereafter start a fresh process from the beginning and with people who can help you expedite. Please keep in mind you can initiate a fresh process any time but it is advisable to close the existing application so that you do not end up with a running cost.
Please feel free to contact me for company formation work.
With best regards,
Mrs. Khan
0508855599
