Q: Hi Rajasree, I am trying to seek help for my brother's business in the UAE which is under financial distress right now and some cheques have bounced. Additionally, labour payments were not done for the last 3 months. His health deteriorated due to the stress and he left the country about 1.5 weeks ago. We would like to file for bankruptcy and liquidate the business. Please let me know if your firm can help with this. Thanks. Best regards, A.Dec

Q: I am a partner of a small civil company with a professional license issued by DED. My company has lost court cases wherein we have to pay 400,500 AED. These cases are in the execution stage. My company also has debts of 364,000 on our books. The company is not in a position to pay the proven debts in execution court or the pending debts mentioned in our books. I want to close the civil company. Question 1: Is it better for me to file for bankruptcy or file for liquidation of the company? (Or will the court immediately start one procedure if I register the other procedure?) Question 2: I heard that the court starts criminal proceedings automatically if bankruptcy proceedings are started. Is this true? What rules to follow to avoid criminal charges? Question 3: After the civil company is declared bankrupt, will the partners still have to pay the creditors (In the ratio of the shares they held in the civil company) because our company is not an LLC. Thank you for your help!

Q: Dear sir/madam, I have a small civil company for consultancy activity (not an LLC). The company has debts that we have not been able to pay. One of the partners is refusing to cooperate and refusing to sign a company closure contract for mutual dissolution of the company. A) What steps can I take to dissolve the company? B) Is there a difference between "dissolution", "liquidation" and "bankruptcy" for a civil company? C) What are the rights of the creditors of the civil company after the company is no longer existing? D) What happens to earlier existing execution cases against the company after the company is no longer existing? Thank you for your replies and assistance over here! I can visit the offices of the lawyer who makes an informative reply here to negotiate to represent me for this issue.

Q: Dear sir/madam, Request for 1 hour Pro-Bono consultation. I wish to register two lawsuits: A) Performance order I and my partner each have 50% of a house as per the title deed. The partner signed an affidavit confirming that his 50% share of the house is a loan from me and he will return the 50% share whenever I ask for it. B) Bankruptcy and dissolution of a small civil company I request 1-hour pro-bono consultancy for the above lawsuits where you share your ideas on how you will proceed with the lawsuit, after which you can make me your offer to represent me in the above lawsuits.

Q: Can a shareholder in a company give a loan to the company, and expect an interest payment from the company - legally? If not "interest", can there be an agreed fixed sum that the company will pay the shareholder specifically for providing this short-term "loan" to meet the company's working capital requirements? The point to note is that it's not just any individual giving money to the company, but actually a shareholder "loaning" money to the company for an expected monetary return.

Q: Dear Sir/Madam, I am a foreign minority shareholder in a business based in the UAE. The business is struggling, and its license is overdue. Unfortunately, my partner is not responding to any communication, and we are accruing late fees from the expired license. What are my options here? At this point, I would not mind relinquishing my shares and walking away if that were possible.

Q: Dear Sir/Madam, Where do I file for insolvency as an individual under the Insolvency Act, and where do I file for bankruptcy as a company? Please provide specific locations. What happens if I don’t have any money to pay anything? Do I go to jail after filing for any of these if there is no way I can pay the debt even after liquidation?

This article will briefly explain about the Personal Insolvency Law of 2019 and Bankruptcy Law of 2016 in the UAE. Previously, there was only the Bankruptcy Law that was available for the commercial companies, merchants, traders, and similar persons who were suffering from the financial crisis but now individuals have such options available as well especially considering the effects of COVID-19. Both laws were issued to assist distressed persons and entities by offering them settlement options.

Companies can be wound up by Voluntary Liquidation. This shall proceed as initiated by shareholders or creditors of a company by passing a valid shareholder’s resolution. When a company’s financial mechanism fails, and the company is in financial distress and/ or becomes insolvent whereby it is unable to pay off its debts, the company may file a petition for winding up to the court.

The UAE continues to strive to modernize its laws and create more flexibility in meeting the needs and requirements of investors and businessmen and elevate its economy to the highest levels of growth and development.

An interview-format article covering the topic of the new amendments to the laws in the UAE. This is from the legal podcast of lawyer Ludmila Yamalova, the founder of Lawgical with LYLAW.

With the introduction of the new procedures for obtaining a power of attorney (POA) remotely in the UAE, after it was mandatory to appear in person in front of the notary public as a global rule to ensure the identity and intention of the person requesting a POA, we put between your hands this brief guide for how you get it done.

Dealing with financial difficulties can be overwhelming, but the UAE provides a comprehensive legal framework to manage bankruptcy and insolvency in a way that benefits both debtors and creditors. Understanding these laws and how they work can make a huge difference in navigating the process successfully.

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 law, promulgating UAE Civil Code, govern the civil transactions in the United Arab Emirates. The commercial transactions remain subject to the laws and regulations applicable in their regard.

The provisions of this Federal Decree-Law No. (51) of 2023 Promulgating the Financial Restructuring and Bankruptcy Law, known as the "Bankruptcy Law" governs Financial Restructuring and Bankruptcy regulations in the United Arab Emirates