Questions & Answers
Managing shares of a deceased ex-pat director in an LLC: What's the process?
Dear Sir/Madam,
Recently, one of our ex-pat directors passed away. The company is an LLC, with shares split as follows: 51% owned by a local Emirati, 25% owned by an ex-pat director, and 24% owned by another ex-pat director.
We need to determine how to manage the shares of the deceased partner since he has no family here and his family back in his hometown wants nothing to do with the business and is uncontactable.
What is the process for retrieving the shares and continuing our operations?
Dear questioner,
The company bank account that the deceased was authorized to sign for is frozen. The profits of the company are distributed. The company should not be dissolved.
However, the shares of the deceased must be transferred to his legal heirs after a certain legal procedure that includes the issuance of an official document from an official entity (the courts) in which the legal heirs, their legal representative, and his powers in managing the estate are identified.
The following points apply to any partner who owns any percentage of the shares in a limited liability company, whether the company is onshore or in a free zone.
- The company bank account that the deceased was authorized to sign for is frozen.
- The profits of the company are distributed.
- The company should not be dissolved.
However, the shares of the deceased must be transferred to his legal heirs after a specific legal procedure that includes the issuance of an official document from an official entity (the courts) in which the legal heirs, their legal representative, and his powers in managing the estate are identified.
