If I resign and remove myself from the trade license, am I still liable for a loan? - Q&A - Legal Advice Middle East

Question

Q: My partner signs all documents for a bank loan. If I resign and remove myself from the trade license, am I still liable? A: You may still be liable for any loans taken out by the company during the time you were a partner. You may be able to negotiate with the bank to have your name removed…

Suhail Rana · Accepted Answer

Dear Questioner, Thank you for reaching out with your query regarding your business partnership and potential liability concerns. I appreciate the opportunity to provide clarity on this matter. Based on the information you've provided, it's essential to understand that the legal implications of business partnerships and liabilities can vary depending on several factors, including the structure of the partnership and any agreements in place between the partners. In a scenario where you share 50% ownership of a company with your partner, and your partner signs documents for a bank loan based on the operational instructions of the bank, there are a few key considerations: - Legal Structure: It's important to determine the legal structure of your business. While you mentioned that it's not an LLC, the specific legal form of the business (e.g., partnership, sole proprietorship, etc.) can impact the extent of individual partners' liability. - Partnership Agreement: If you have a partnership agreement in place, it should outline the rights, responsibilities, and liabilities of each partner. The agreement may specify whether partners share liability for loans and obligations incurred by the business. - Agency Law: Under agency law principles, when one partner acts on behalf of the partnership within the scope of their authority, their actions may bind the other partner(s) to those agreements. However, the extent of your liability would depend on various factors, including the nature of the loan and any agreements between the partners. Regarding your question about resigning and removing yourself from the trade license, it's essential to understand that merely resigning from the company or removing yourself from the trade license may not automatically absolve you of liability for obligations incurred during your tenure as a partner. Liability issues can be complex and may require a thorough review of the circumstances and applicable laws. To provide you with comprehensive guidance tailored to your specific situation, I recommend scheduling a consultation to discuss the details further. During our discussion, we can delve into the specifics of your partnership agreement (if any), review relevant documents, and outline the best course of action moving forward. Please feel free to reach out to me via WhatsApp or phone to schedule a consultation or if you have any additional questions. I'm here to provide the legal assistance and guidance you need.

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