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Can a partner of a company make an acknowledgment of debt to himself?

Dear sir/madam,

There is a small professional license company with two partners. Each partner has the power to sign documents singly. Partner 1 gave 1 Million AED as a loan to his company from his personal account.

There is no equal amount paid by Partner 2. The company bank accounts show that the company received money from Partner 1 and there is no evidence that this amount was paid back.

There is an existing court verdict that states that Partner 1 gave loans to the company and partner 2 did not provide any evidence that it was paid back.

Can Partner 1, in his role as partner and signatory with power to sign singly, sign an acknowledgment of debt on company letterhead in favor of himself in his personal capacity?

I thank you for your help!

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Ahmed Abbas

Dr. Mohamed Alhammadi Advocates and Legal Consultants

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26 Jul 2022, 18:06

Dear questioner,

Could you send the company license for the establishment contract for our examination in order to answer your inquiry?

26 Jul 2022, 18:07

You can send it via WhatsApp.

26 Jul 2022, 18:14

Respected sir,

The company license is a standard civil company with a professional license, two partners, and a Wakil E Khidmat.

26 Jul 2022, 18:40

Which partner is a legal representative?

26 Jul 2022, 18:50

Each partner has 50% of the company. Each partner is a manager of the company. Each partner has the right to bind the entire company with his single signature.

So can a partner who is authorized to sign then make an acknowledgment of debt to himself?

27 Jul 2022, 05:41

Yes, he can do that, however, if you have enough evidence to prove that this acknowledgment is created by himself for his favor, this acknowledgment will be null and void.

27 Jul 2022, 05:42

Please text me on WhatsApp for further information.

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Naser Almuharrami

Naser Almuharrami Advocates & Legal Consultants

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26 Jul 2022, 18:08

Dear questioner,

Please contact me via phone.

26 Jul 2022, 18:15

I request your kindness to inform me of your answer to this legal issue on this forum.

It is just a question on law and not related to my specific documents.

Thank you!

26 Jul 2022, 18:48

Yes, the MOU gives each partner the right to sign documents singly. Each partner is the manager of the company.

So can a partner sign an acknowledgment of debt to himself?

26 Jul 2022, 19:09

He may sign the company’s indebtedness as long as the articles of incorporation permit him to do so.

26 Jul 2022, 19:23

Yes, articles of incorporation give each partner the right to singly sign any document and singly manage the company.

I understood from you that a partner can sign an acknowledgment of debt on company letterhead to himself as long as he is authorized to singly sign documents that bind the whole company.

Did I understand correctly?

26 Jul 2022, 19:33

Yes, correct!

26 Jul 2022, 19:41

I thank you very much, sir.

Please inform your number so that I may call you.

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Rashid Saif Al Ali

Rashid Saif Advocates & Legal Consultancy

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22 Aug 2022, 06:43

Hello,

As per your query, please note that since partner 1 gave the debt to the company, which is assured by the court and the evidence, so debt has been proved.

Secondly, the debt acknowledgement to be payable to partner 1 should be signed by both the parties or partner 1 can execute the order of the court.

22 Aug 2022, 06:43

Please call or email us.

22 Aug 2022, 08:02

Thank you for the reply.

1. Each partner has the right to sign singly and bind the company with his single signature. In this situation, can partner 1 sign singly in his capacity of authorised signatory, and issue debt acknowledgement favouring himself in his personal capacity?

2. The debt was proven in a court case where partner 1 was a respondent, so he cannot execute the verdict.

22 Aug 2022, 08:27

Hello,

I replied to you. However, for what you are saying, please send us the documents and evidence, to relate to it.

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