All cities, UAE

Partners in conflict: Legal implications of unpaid loans in a civil company

Dear Sir/Madam,

Effect of company manager issuing company check that bounces

My civil company has two partners. Each partner is also the manager. The company took a loan of 260,000 AED from a friend. I want to return the loan but my other partner does not want to pay.

What will happen if I issue cheques from the company account, they bounce, and the other party starts a cheque enforcement case against the company? Then each partner will pay the debt in the ratio of their shares.

Will I be jailed or have to pay a fine due to signing a company cheque that bounced?

My alternate method is to issue an acknowledgment and the creditor does Amr al Arida "performance order" case, but I want to reduce court costs.

Mariam Jumaa Alhammadi

Laila Hamza Al Mulla Advocates and Legal Consultants

Chat

Hire

Meet

28 Feb 2023, 07:12

Dear questioner,

The bounced check was previously punishable by imprisonment and a fine, but after amending the law, there is currently no criminal case in the checks, due to a closed account, but the criminal case is in the case of forgery.

28 Feb 2023, 07:13

However, payment must be made so as not to be subject to a fine or a travel ban, because the check is a financial tool in itself, and a large fine is imposed in the event of a bounce.

28 Feb 2023, 07:36

The company creditor is my friend. I want our company to pay the creditor but my other partner is refusing to pay his share.

The creditor will not try to make a fine against my company and will not ask for a travel ban on me. He will ask for a travel ban on the partner who does not want to pay.

I wish that our company repays the creditor and want to investigate the simplest and cheapest way to pay the creditor.

A) I sign the company cheque and the creditor bounces the check, starts cheque enforcement execution, and pursues my other partner during execution,

B) I sign an acknowledgment and the creditor starts a performance order case and pursues my other partner during execution, or

C) I sign an acknowledgment and the creditor starts a regular civil case and pursues my other partner during execution.

Which one is the fastest, lowest-cost way that will not get me into trouble, but forces my other partner to pay their share of the debt?

Was this content helpful?

Rashid Saif Al Ali

Rashid Saif Advocates & Legal Consultancy

Chat

Hire

Meet

28 Feb 2023, 08:19

Dear questioner,

If your company is a Limited Liability Company, then the execution for either of the mentioned methods will be on the company's accounts and you, as you are the partner who signed the relevant documents.

It will not be on the other partners.

And yes, you can be jailed and banned if the company and yourself failed to execute.

For further details, kindly contact us via phone or email.

28 Feb 2023, 08:23

My company is a civil company with a professional license.

In past execution cases where I issued debt acknowledgment, the creditor asked for the other partner to be detained, and the honorable court detained other partners without detaining me.

3 Mar 2023, 07:04

We need more details to assess you situation. Kindly contact 054-7649695 / rashidadvocates@gmail.com

Was this content helpful?