Questions & Answers
Questions & Answers
3 available 3 • View allNon-payment of share value and claiming the shares back


1
Q: My company is located in Dubai as an LLC. We have two shareholders,
1. UAE national shareholder with 95%
2. A foreign shareholder with 5%
The UAE national shareholder transferred this 5% shares to the foreign shareholder through a share sales agreement, which was notarized at the notary public in Dubai and submitted it to the DED to amend the trade license etc. This happened in 2014.
But till this date, the foreign shareholder did not pay the value of 5% shares to the UAE national shareholder or to the company.
Also, the foreign shareholder was not actively involved with the company's operation and as per Article 17 of the Commercial Companies Law:
"2. The partner may not contribute in work rendered unless he is a joint partner. The contribution of the partner may not consist of his having reputation or influence."
Under these circumstances, is it possible for the UAE national shareholder to request from the court to cancel the 5% shares of the foreign shareholder and transfer back to him?



Oct 4, 2018
1269
Legitimate requests that the shareholders can ask the company for to remain informed

0
Q: An LLC company is being asked for extensive financial, board and contract documentation as the right of an unhappy minority shareholder under the UAE law.
From the Shareholders Agreement - "At all times, make available to the Shareholders and their duly authorized representatives full and complete access (including copying facilities) to the books, records, accounts, documents and premises of the Company."
The company requests clarification as to what documentation may be released under the UAE CCL and Shareholders Agreement which appears to grant shareholders access to all records.
The company has nothing to hide, however, the continual extensive requests are an unwanted distraction to the operation of the company. Has this ever been tested in the UAE law courts?
Many thanks


Sep 29, 2021
254
Selling shares in a company to an existing shareholder

1
Q: I am a shareholder in an LLC DED company in the UAE. We are 3 shareholders. I would like to transfer/sell my shares to an existing shareholder in the company. However, the third shareholder refuses to sign on any documents regarding the transfer.
Is this applicable? What could be done and what is the appropriate procedure?


Aug 20, 2020
488
Legal blog
2 available 2 • View allLegal Aspects of Company Incorporations in the UAE 5
Sometimes this seems very simple to incorporate a company in the UAE, however, investors must seek professional advice before taking this important business decision to avoid any future legal implications.
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Local Partner Share contribution in the UAE: What You Need to Know 65
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.
Jan 26, 2020
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Laws & Regulations
3 available 3 • View allFederal Law No. (2) of 2015 On Commercial Companies 15
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.
Mar 25, 2015
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Federal Law No. (18) of 1993 Issuing the Commercial Transactions Law 19
This Law applies to merchants, as well as to all acts of commerce carried out in the UAE by any person even though he be not a trader. Commercial matters regarding which specific Federal laws are issued shall be subject to the provisions of such laws, and to the provisions hereof which do not contradict with said laws.
Sep 7, 1993
33058
Federal Law No. (5) of 1985 On the Civil Transactions Law of the United Arab Emirates 96
The provisions of this law, promulgating UAE Civil Code, govern the civil transactions in the United Arab Emirates. The commercial transactions remain subject to the laws and regulations applicable in their regard.
Dec 15, 1985
148521

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