Questions & Answers
Legitimate requests that the shareholders can ask the company for to remain informed
An LLC company is being asked for extensive financial, board and contract documentation as the right of an unhappy minority shareholder under the UAE law.
From the Shareholders Agreement - "At all times, make available to the Shareholders and their duly authorized representatives full and complete access (including copying facilities) to the books, records, accounts, documents and premises of the Company."
The company requests clarification as to what documentation may be released under the UAE CCL and Shareholders Agreement which appears to grant shareholders access to all records.
The company has nothing to hide, however, the continual extensive requests are an unwanted distraction to the operation of the company. Has this ever been tested in the UAE law courts?
Many thanks
Dear Questioner,
The shareholders can request such demand, however, it should be more specific and to determine the date and the nature of the documents they wish to review.
Moreover, I would suggest that such disclosure be done through a board members meeting because, in such a meeting, you can record in the board members meeting book "that the shareholders had a full review to the documents ... .... .... on the date of ...., and no notices have arisen. Or if there was also mention and mention the solution as well and the time frame."
Later they cannot request such continual extensive requests until the next financial year.
Hello,
As per your query, please note that as per the new law, the minority shareholder has the right to ask for the company documents.
If he is unsatisfied, he may take legal action against the majority shareholder in the company.
It will come into Dubai courts purview whenever there is any fraud or misrepresentation of the manager and for that, there is loss in the company.
Please call or e-mail us.
Disclaimer- The above-referred view is not a legal opinion, these opinions cannot be challenged or presented before any court of law.
