Questions & Answers
Questions & Answers
4 available 4 • View allFiling for bankruptcy or liquidation in case of business failure


1
Q: I am a partner of a small civil company with a professional license issued by DED.
My company has lost court cases wherein we have to pay 400,500 AED. These cases are in the execution stage.
My company also has debts of 364,000 on our books. The company is not in a position to pay the proven debts in execution court or the pending debts mentioned in our books. I want to close the civil company.
Question 1: Is it better for me to file for bankruptcy or file for liquidation of the company?
(Or will the court immediately start one procedure if I register the other procedure?)
Question 2: I heard that the court starts criminal proceedings automatically if bankruptcy proceedings are started. Is this true? What rules to follow to avoid criminal charges?
Question 3: After the civil company is declared bankrupt, will the partners still have to pay the creditors (In the ratio of the shares they held in the civil company) because our company is not an LLC.
Thank you for your help!



Nov 1, 2021
687
Director's responsibility for rental cheques upon bankruptcy/liquidation
3
Q: Good Day,
We are an LLC based in Fujairah. Due to COVID, we have run out of money and will need to declare bankruptcy or liquidate it. However, when all rental cheques were handed over, they were from my personal account (as we took a loan to start the business and did not have a bank account for the business yet).
These cheques are still in the possession of the lessor. It would be possible to replace the cheques but I will still need to personally sign each cheque, as I am the director of the LLC.
If we liquidate, would I be held responsible for the payment of the outstanding rent?
Can I end up in jail if I don't pay?
Is this not exactly why an LLC is established?
What will be my responsibilities as we are not getting cash into the business?

Jul 5, 2020
727
Is the manager of an LLC company liable for dishonored cheques?


2
Q: In 2020, I was the manager of a company that had an office in a free zone in Dubai.
At the time, the partners did not have bank accounts/cheques in Dubai, and to make payments, 4 cheques from a third person were provided, who in addition to the 4 cheques, also provided an undertaking letter attached to the lease agreement.
We carefully pay this person the amount related to the lease, as well as the value of all cheques. However, this person did not honor the payment of the last cheque.
Now the free zone has opened a case against the company for the non-payment of rent.
My question is, will the company be held responsible?
If the company is held liable, am I as a manager liable in some way? And will I be responsible for paying this personally?
The company no longer exists and I am the only partner who still lives here, in addition to having been the general manager.



Sep 22, 2022
407
Will my company be liable for an employee’s debts from a business they previously owned?




1
Q: Hello,
I am looking to hire a new employee who has debts from a company he previously owned.
Will my company be responsible for his debts, and can his creditors make a claim against my company?





Feb 11, 2025
54
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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.
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The Duties and Obligations of the LLC Manager in the UAE 22
In view of the fact that the manager is primarily the point of reference for the company in the business streets, he is generally authorized by a power of attorney provided by the shareholders of the company or via the MOA of the company. In certain cases exceeding the powers given to the manager may make the manager, or the LLC itself, liable, depending on the nature of the manager’s actions.
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Filing for Bankruptcy and Insolvency in the UAE: What You Need to Know 8
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Nov 12, 2024
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Laws & Regulations
4 available 4 • 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
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Federal Decree Law No. (14) of 2020 Amending Certain Provisions of the Federal Law No. (18) of 1993 Concerning the Commercial Transactions Law 4
The provisions of this Decree by Law amend the Federal Law No. (18) of 1993 by replacing Clause (4) of Article (379) as well as Articles (600), (617), (641), (642), (643), (644), and adding new articles numbered (635) Bis, (641) Bis (1), (641) Bis (2), (641) Bis (3), (641) Bis (4), (643) Bis (1), (643) Bis (2), (644) Bis (1) and (644) Bis (2). The Decree-Law also repeals Articles (401), (402) and (403) of the Federal Law No. (3) of 1987.
Sep 27, 2020
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Federal Decree-Law No. (51) of 2023 Promulgating the Financial Restructuring and Bankruptcy Law 0
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Good morning.
My tenant was supposed to vacate the property on 15th April 2025 as per the contract.
Now he is not answering the phone, and the property is still in use.
Please guide the way forward. I have already rented the property to a new tenant.
Apr 16, 2025
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What to do if the bank filed case on me using security cheques and executed travel ban? 0
The bank filed a case against me using security cheques and executed a travel ban from Dubai Courts.
Apr 15, 2025
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If a bank has filed an execution cheques case through the Dubai Courts. Is a travel ban automatically applied? 0
A bank has filed an execution cheques case through the Dubai Courts due to nonpayment of a personal loan and credit card.
Is a travel ban automatically applied?
I looked on the Dubai Courts website, and it says the judge has issued a “reserved” order for my case.
Furthermore, when the bank emails, they threaten me with a travel ban. So I am assuming there is no travel ban issued (but I don’t know). I haven’t received any notice of a travel ban.
If there is a travel ban, how do I find out?
I have checked the Dubai police app, and there are no financial crimes against me.
Please advise if you know.
Apr 4, 2025
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I left Dubai 19 years ago without cancelling my visa. Is there anything to do to remove the travel ban? 0
Hi,
I left Dubai 19 years ago without cancelling my visa, which was through sponsorship.
I informed them after I left the country, and also paid my debt to them. However, I think I may no longer be able to travel there.
Is there anything I can do to remove the travel ban?
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How does the trademark registration of a new trademark in the UAE work? 0
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View allIs there hope for bail in a 25-year sentence for a minor drug charge? 0
Dear Lawyers,
My brother was sentenced to 25 years in jail for a minor drug case (1 gram) on October 24, 2024. Can he get bail?
What will happen next, and what can I do to help him get released?
Kindly advise!
Nov 12, 2024
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If you had a case for defaulting on a loan and resolved it, how to clear it from the database? 0
Hello,
I have a question.
My husband had a loan 15 years ago, he had difficulty paying this loan, and the bank opened a case, which was solved, and he paid the full loan.
He is still in Dubai and has a good work position.
How is it possible to remove the solved bank case from the database to have the possibility of getting the credit card and loan?
Thank you.
Sep 16, 2024
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How can I inform authorities I signed a police statement I didn't understand? 0
Good Day,
As someone unfamiliar with local laws and a non-Arabic speaker, the police took my statement but did not provide a translation and told me to sign. I have no idea what they wrote or presented in the case.
The case is now with the Public Prosecution. What should I do to ensure the authorities are aware of this?
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Can I bail my husband out if I'm a visitor and provide my passport? 0
Dear Lawyers,
My husband is under investigation, and I want to get him bailed out from detention.
However, I am a visitor. Can I get him bail by providing my passport?
Aug 29, 2024
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How can I file for divorce in the UAE as an Indian Christian with a son, and ensure custody? 0
Hi, good morning,
I’m an Indian residing in the UAE and want to apply for a divorce. My husband and I have been living separately for more than 3 years, and he has been living in India since our separation.
We are both Indians and Christians (non-Muslims). We have a son who is 8 years old now. Can you please let me know the divorce procedure if we want to proceed in the UAE, both with and without mutual consent?
Additionally, please advise on how to proceed with custody, as my son currently resides with me.
Thank you!
Aug 28, 2024
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View allIs it legal to reduce the salary after signing an employment contract? 0
Hello,
Is it legal to reduce the salary after signing an employment contract?
Mar 19, 2025
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Can the owner of a company escape if there is a cheque execution and travel ban on him? 0
I raised a cheque execution case against a company and its owner and won. There is a travel ban on him. I was receiving installments for three months and now he stopped paying.
The court after request summoned him. In total, he paid only 30% of the owed money. I found that his company license is expired and also in the month his visa will expire.
Does he have any option to avoid payment?
Please note he was deceived by showing no money in his bank account and no assets in his name but he is running multiple businesses.
Also a month ago, he tried to convince me to lift the travel ban but I refused to do so. But he submitted a guarantee and left UAE.
Now the status shows he is back in the UAE and the travel ban imposed again. But after that, he stopped payment.
Is there a 1% chance of him not paying me the remaining money?
Is there a way he can leave the country through the Amnesty program or any of this sort?
Mar 12, 2025
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In EMARATAX, must two licenses for the same activity in different emirates register separately? 0
Hello,
In EMARATAX (The Federal Tax Authority), if someone has two licenses in different emirates for the same activity, does he need to register two taxable persons, or how should he proceed?
Mar 2, 2025
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Can a developer demand extra payment for a 30% size increase after handover? 0
Hello,
I purchased a one-bedroom off-plan unit in Dubai from a well-known developer under an SPA specifying an area of 801 sq. ft. I completed all payments as per the developer’s payment plan, and the unit was handed over to me without a Title Deed.
After taking possession, furnishing the unit, signing a tenancy contract, and making repeated follow-ups to obtain my Title Deed, the developer informed me, 45 days after handover, that the actual area was 1,041.41 sq. ft., a 30% increase from the original SPA terms.
To receive my Title Deed, they are now demanding payment for the increased size.
Key issues:
- Failure to notify me before handover about the 30% increase in area.
- The SPA allows for price adjustments for area variations but specifies that such adjustments must be reflected in the final installment, which I had already fully paid before handover.
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I require legal advice based on RERA/DLD laws and the SPA.
Mar 12, 2025
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How to recover unpaid fees from a client who refuses to pay for online consulting services? 0
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A client of mine used our consulting services online and is refusing to pay. Despite multiple reminders, she still has not made the payment. What legal action can I take against her?
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View allCan I terminate my Dubai property contract due to a 12-month delay and only 50% completion? 0
Dear Lawyers,
I bought a property in Dubai, and the developer is 12 months late with the progress still 50% incomplete.
Can I file a case and terminate the contract?
Oct 24, 2024
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My partner is hiding documents and emptying the bank account. What can I do? 0
Dear Lawyers,
I have a 49% share in a 2-year-old Dubai mainland LLC. We are two foreign owners, both managers.
My partner, who is appointed as the main manager, is hiding all documents and keeps the bank account empty through ATM withdrawals, which prevents me from obtaining evidence or finding a buyer.
A legal notice is likely to be ignored, and removing my partner would be a lengthy process. I have no concrete evidence of a breach of trust. What are my options?
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Aug 29, 2024
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Can I return to Dubai by paying only the court fine for a 2016 debt case? 0
Dear Sir,
I hope this message finds you well!
I am writing to seek your advice regarding a debt case filed in 2016 in the UAE. The debt amounts to approximately 45,000 AED (20,000 AED cheque amount and 25,000 AED credit card amount).
The associated interest has now possibly exceeded 150,000 AED. I have recently secured a job in Dubai and am eager to return; however, I am currently unable to pay the full debt amount.
I am aware of a court fine of 5,000 AED. I would like to understand if there is any possibility of returning to Dubai by paying only this court fine and lawyer fee.
Could you please advise on any available legal avenues or procedures that may allow me to resolve this matter and return to Dubai under these circumstances?
Your guidance on this matter would be greatly appreciated.
Thank you for your time and assistance!
Best Regards,
Jul 29, 2024
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How can I exit a partnership and reclaim my investment from an LLC company? 0
Dear Sir/Madam,
I hold a 33 percent share in an LLC Company.
I want to exit from the partnership as I don’t want to work with other partners due to their misuse of company funds.
I want to take my investment and profit up to the current date.
Jun 12, 2024
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Where should I file for divorce with my visa in Sharjah and my wife's in Abu Dhabi? 0
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I want an experienced lawyer to handle my divorce case. I need to understand in which court jurisdiction I should file the case.
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May 20, 2024
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