Q: I am a partner in an LLC registered in Dubai, whose license was expired in Nov 2017. I was a passive investor stationed in India and the company was managed my senior partner and MD (Managing director) of the company who was stationed in Dubai. The company was not managed well, the licenses were not renewed and the business activities did not take place. My last visit was in May 2017. The MD of the company is still in Dubai on an earlier visa but didn't get in touch with me and he's not reachable. Now, I want to start a new venture in any free zone on an individual basis. How can I cancel the earlier visa and get a new investor visa in the free zone? Is it necessary to liquidate the old company in order to cancel the visa? Is it possible for me to cancel the visa on an individual basis and apply for new company formation? Please guide me.

Q: Hi there, Can you please explain the UAE Insolvency Law No. 19 of 2019 on 29 August 2019, thus how beneficial the debtors for defaulting on payment? Thanks,

Q: Dear Sir/Madam, Is there a path to initiate some sort of investigation by relevant authorities on a company that may have committed fraud by falsifying positive P&l reports in order to obtain loans from a bank? Loans have been used to finance construction projects. The company has in fact been making losses for over six years & directors/owners have used operational cash to finance down payments & repayments, instead of using their own capital. In the process, they owe millions to suppliers and also 100s of thousands to staff/workers as they have been constantly delaying payment of salaries going back 3 years & not paid full salaries to everyone for 9 months. They have been showing/submitting financial reports showing losses as proof/reason for their inability to pay. Is there a way to combat this kind of deception/fraud?

Q: One partner wants to leave the company. What are the options if the other partners are not willing to let him go? It's a tech company and the partner in question is the CTO, without him, the company will almost certainly fail. There are accumulated operational losses to the tune of AED 4 million. It's a Dubai Mainland LLC. The second partner is a Dubai company who acts as a collaborator in some of our projects. We recently found out that the GM and a couple of top managers in that company are building a clone of our most promising product. We can prove it too. Both the teams happened to bid for the same opportunity and the customer realized both are exactly the same product and informed us. Is this enough legal grounds to demand release from the partnership?

Q: Hi there Michael, I am a 24% shareholder in an LLC wherein the other shareholders are our local partner with 51% shares and the partner who is listed as manager on the trade license with 25% shares. The manager has absconded leaving behind unpaid VAT and other debts that are well over 30 days due (up to a year). No proceedings by creditors have been filed against the company and the MOA contains a general POA in favor of the Manager. I would like to wind down the company without going through bankruptcy procedures. My understanding is that the listed manager of an LLC is personally liable for the Company's debts. I need advice about the procedures required to wind down the company. I do not wish to go through bankruptcy procedures as the finances and management of the company were being handled by the manager. I am just the creative director of the LLC. Please advise as soon as possible.

Q: Our Dubai mainland LLC company stopped business due to financial hardships. There is a silent partner who invested AED 400k against a 25% stake in the company. The partnership is via a share holder's agreement and not a named partnership. Q1: Can he file a commercial dispute against the managing partner to make him personally liable? Q2: Can the managing partner compel the investing partner to contribute to the pending dues and expenses to close the company? Q3: Are any of the cases or judgments criminal in nature? that is, requiring bail or imprisonment?

Q: I had a trading company in the UAE with a local sponsor of 51%, myself and my partner 49%. We have a joint signature company account in a bank. I left the UAE and was not able to return back. 1. Can my partner operate that company account without my consent/approval? 2. Now my partner has sold that trading company to another person. Can the bank allow that company account to operate? Please advise. Can you provide services for the above on my behalf?

Q: Dear Lawyers, I have a company in Sharjah FZ. I hold 51% shares and my partner holds 49% shares. I am the director, manager, and the sole beneficiary of the company bank account. We are both now under the company visa. I, as the business owner, demand a few things for him to provide before he can benefit from the company. The point of the agreement is: - The new shareholder needs to provide business development capital for AED 145,000, payment will be on several terms. Since I made the change on the license and put him under the company visa, he has been delaying paying the capital. I have been chasing him through messages and phone calls, but he is still not responding. This made the cash flow of the company a mess. 1. What legal step can I take to take him out of the company and seek compensation for the mess he made with the company? 2. Will it be better for me to file bankruptcy or to fight the legal action against him? Thank you so much, appreciate your answer!

س: السلام عليكم، دخلت شراكة في شركة ذات مسؤولية محدودة أنا وشخص آخر بنسبة 50% لكل شخص. أنا شريك ومدير. أريد التنازل عن نسبتي والانسحاب من الشركة كون الشريك لا يدعم المشروع ويريد فقط أرباح. علما أن الشركة لا يوجد عليها ديون أو أي التزامات، ولكن لا يوجد أرباح واضطر أحيانًا للدفع من جيبي الخاص. مدة عمل الشركة ٤ أشهر فقط. أريد الانسحاب والشريك لا يرغب في ذلك. ما أفضل طريقة للانسحاب؟ وهل تترتب علي مسؤولية كون الاتفاق الشفهي نص على أن ندخل شراكة وأنا أعتني بالمشروع ولكن اكتشفت أن الشريك لا يريد إلا أرباح؟ علمًا بأن المشروع في بدايته ويحتاج إلى دعم.

Q: I opened a cafeteria with my colleague spending AED 120000/- each. I was an investing partner and my colleague was the working partner. A few weeks after the cafeteria opened, we had a lot of disputes because I noticed fraud in accounts and initial setup expenses from his end. So I decided to exit the business and I asked for my money back. But he is refusing to pay back anything. The trade license was issued in the sponsor's name and not in any of our names so I could not do anything. Also, I paid him most of the money in cash as I trusted him then. However, I have a mutually signed agreement with the 120k mentioned as paid to him in that. How can I get my money back?

Over the years the UAE has become a centre of trade and commerce for the Middle East, thanks to its strategic location, excellent connectivity and extensive services to assist with all aspects of business. According to the World Bank's 2016 report, the UAE has ranked 31st in the global index of ease of doing business. This encourages more entrepreneurs to set up different kinds of business entities in the country.

The UAE continues to strive to modernize its laws and create more flexibility in meeting the needs and requirements of investors and businessmen and elevate its economy to the highest levels of growth and development.

Companies can be wound up by Voluntary Liquidation. This shall proceed as initiated by shareholders or creditors of a company by passing a valid shareholder’s resolution. When a company’s financial mechanism fails, and the company is in financial distress and/ or becomes insolvent whereby it is unable to pay off its debts, the company may file a petition for winding up to the court.

للشركات كما للإنسان، دورة حياة. وحيث يبدأ الشيء، فلا بد له من نهاية، ولا باقي إلا الله. وإنه حيث نظم القانون نشأة الشركة، وعقد تأسيسها، فإنه كذلك لم يغفل تنظيم قواعد حلها وتصفيتها، ذلك لأن هذه القواعد بالغة الأهمية والحساسية، فهي تنظم طريقة أداء ديون كافة دائني الشركة، وتحصيل حقوقها، وتوزيع الأرباح أو الخسائر على الشركاء بعد بيان ما لها وما عليها. ونعرض في هذا المقال لهذه الإجراءات بحسب ورودها في قانون الشركات الإماراتي بإيجازٍ غير مخل.

This article will briefly explain about the Personal Insolvency Law of 2019 and Bankruptcy Law of 2016 in the UAE. Previously, there was only the Bankruptcy Law that was available for the commercial companies, merchants, traders, and similar persons who were suffering from the financial crisis but now individuals have such options available as well especially considering the effects of COVID-19. Both laws were issued to assist distressed persons and entities by offering them settlement options.

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

على قدر وجود تعاملات تجارية سواء بين الأفراد من غير التجار أو الشركات أو بين كليهما، تكون هناك حالات حيث يصبح المدين بوضع مالي يتعثر فيه عن سداد المستحقات المالية تجاه دائنه، فيصبح في حالة ما يعرف بالإعسار. وقد عالج المشرع الإماراتي هذه الحالات حرصاً منه على حفظ الحقوق وإعطاء المدين فرصة لسداد ديونه، ونظم هذه العملية من خلال المرسوم بالقانون الإتحادي رقم 19 لسنة 2019 بشأن الإعسار.

بتاريخ 24/10/2023، صدر قرار الهيئة العامة لمحكمة تمييز دبي في الطعن 4 لسنة 2023 مرسياً مبدأً جديداً مفاده أن الأصل في الناس هو الإعسار وأن اليسار عارض، وأنه يتعين -تبعاً لذلك- على طالب التنفيذ أن يثبت يسار خصمه المنفذ ضده أو تهريبه لأمواله كي يستصدر أمراً بضبطه وإحضاره ثم حبسه لإكراهه بدنياً على السداد. وكما هو متوقع، أحدث هذا القرار ردود فعل كثيرة ومتنوعة، سيما وأنه قرار نوعي يقلب كثيراً من الأوضاع المعتادة رأساً على عقب ويغير من الحالة الاجتماعية السائدة الشيء الكثير.

Dealing with financial difficulties can be overwhelming, but the UAE provides a comprehensive legal framework to manage bankruptcy and insolvency in a way that benefits both debtors and creditors. Understanding these laws and how they work can make a huge difference in navigating the process successfully.

سبق أن نشرنا على هذا الموقع مقالاً عن العدالة الناجزة، وأشرنا إلى أن المعنى الصحيح لهذه الفكرة ينبغي توجيهه إلى التنفيذ، بحيث يظهر فيه عنصر الإنجاز، وتتجلى فيه صفة السرعة، وذلك بدلاً من إصدار الأحكام ذاتها بسرعة كبيرة ثم تخديرها في مرحلة التنفيذ حتى تموت.

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.

The provisions of this Federal Decree-Law No. (51) of 2023 Promulgating the Financial Restructuring and Bankruptcy Law, known as the "Bankruptcy Law" governs Financial Restructuring and Bankruptcy regulations in the United Arab Emirates