Q: Hi, We are in the process of renewing our license. However, we want to change our old local sponsor. May I know what's the process? Thank you.

Q: I have signed 5 years ago a side agreement when forming a Dubai onshore LLC trading company, and I now realize that there is no termination clause. One clause says that the contract is signed for 10 years and that it will be renewed after 10 years. As a result, the company who provided me with the local sponsor wants to charge me a hefty "penalty" for agreeing to change the sponsor. Besides, they are holding all details (online access codes and password) to deal with the Ministry of Labor. So I have no liberty to change the sponsor unless I pay them a lot of money. I am bound with them because only they can properly cancel my employees' visas if I wanted to recreate a new company. Are such indefinite and abusive side agreements legal? Do I have any recourse to enforce a change of sponsor without paying the "penalty" they are requesting? Thanks

Q: I have opened a restaurant. Due to some issues, I had to add my local sponsor as a partner. Now, the shares are like 64% for him and 36% for me on records. Profit share is 50-50. He is claiming that he has lost his government job due to this high percentage of partnership in the restaurant. He needs a large amount of money every month which I cannot afford right now. Is there any way that I get any assistance of law in this situation?

س: أنا مواطن شريك في شركة بنسبة 51%. إذا أردت إنهاء العقد بيني وبينهم، فما الصيغة القانونية التي أبلغهم بها بالإيميل لأنهي عقدي؟

Q: I am an Indian expatriate resident in Dubai and I have a mainland general trading LLC company with a 51% local sponsor (my partner visa is also on this company). I want to convert it to 100% owned by me and my wife. An LSA agreement is not required in the case of an LLC company. Can I still have an LSA agreement to protect the interest of the sponsor? Alternatively, what if I give a 1% share to the sponsor, is this a kind of protection? What happens if the sponsor dies?

Q: Hi, I'm an auto garage owner in Al Quoz 4 and planning to relocate my garage business to Al Quoz 1. I have a local sponsor currently but planning to cancel him and make the new landlord my sponsor. Is it risky to make your landlord your sponsor & what are the things I have to ensure before taking this decision?

Q: Good evening I am self-employed having an LLC company. I am inside the UAE and I am going through bad days because: 1) I made a huge loss due to non-payment by my client. I won the case in court and I want to file a case for recovery from the client. 2) Due to the financial case, I was not able to pay the sponsorship fee to the local partner for 2 years. He is threatening now to abscond me. How to check whether he absconded me or not? If he absconded me, then what will happen?

Q: We have established a trade license in Abu Dhabi. The owner is from Lebanon and the sponsor is from the UAE. For more than 6 months this sponsor is not in contact. We called him and tried to approach him but no answer at all. We don't know where he is and what to do. We just want to remove him from our trade license through the court. I would like to know the procedure to remove him without his presence. Please reply.

س: بعد التحية، تم إنشاء شركة كبيرة رأس مالها 10.000.000 وكان الكفيل إماراتيًا. صديقي اتفق معه على الكفالة ولكنه لم يكن حريصًا وكان الآخر أذكى وطمع في الشركة فألغى التوكيل الضد الذى بينهما؛ حيث أنه لم يتضمن أن يُلغَى بوجود طرفيه. الآن رفع قضية على صديقي ويطالبه بـ 51% من الشركة إلى جانب أن جميع المعدات مركونة بقالها سنة والشركة متوقفة. يريد إبعاده والاستيلاء على الشركة كلها الآن مع أن كل الأصول والممتلكات باسم الشركة التي دفع مالها كله صديقي المغلوب على أمره.

For entrepreneurs seeking to set up their business in the mainland jurisdiction of the UAE, this is a useful guide to know your rights and obligations.

An interview-format article covering the topic of shareholder disputes in the UAE and pre-emptive measure to be considered. This is from the legal podcast of lawyer Ludmila Yamalova, the founder of Lawgical with LYLAW.

The UAE government has announced important changes to the federal Commercial Companies Law, the most significant is related to the foreign ownership of mainland companies. This will grant foreign investors the full ownership of share capital in companies carrying out certain activities specified to that effect by the competent authorities. This means that foreign investors’ shares will not be limited anymore to a maximum of 49% like before, but can be up to 100% instead.

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

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.