Questions & Answers
Forcing the new owner to undertake pre existing liabilities of the company
Dear all,
I have a bit of a complicated situation and need your help, please.
4 months ago I had transferred my DMCC registered company fully to another individual with all of its liabilities.
The company had a loan with the bank for which I gave my own cheque so I can secure the loan amount and the new owner agreed to take this loan as part of the company liability.
DMCC says the loan is the liability of the company and the new owner responsibility.
The bank says that the new owner needs to come and change the signature from mine to his - until then it is my responsibility.
The new owner doesn't want to do it now that the company is transferred to him and therefore the bank keeps on charging me the loan instalments.
Can you please advise on what to do in this situation and what choices do I have?
Many thanks
Dear Questioner,
Thanks for contacting me online.
From the details above I could understand that the transfer of the company was done with an undertaking to take over the pre existing liability with the bank also.
Then it is the duty of the present owner to change the loan in his name and the necessary entries are to be made in the bank records.
Otherwise, as long as your cheque and signatures are there, your liability continues with the bank. So please advise your new owner to comply with the directions to take over the loan.
If not, as per the terms of the transfer and MOA, you can move against him legally to get it done.
Please feel free to contact me on 0556635526 or WhatsApp me on 0508575526 or email me at ar@alnassaradvocates.com if you need any further assistance or clarification.
Regards,
Anitha Rajeev
