Questions & Answers
My partner is hiding documents and emptying the bank account. What can I do?
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?
Thank you!
Dear inquirer,
First, start documenting every instance where your partner has refused to share information, made suspicious withdrawals, or acted against the company’s interests.
Even small pieces of evidence can be useful later. Make formal requests for company documents, financial statements, and bank records.
If he ignores these requests, having a record shows you’ve made an effort to obtain the necessary information. You mentioned that a legal notice may be ignored, but serving one is still important.
It formally records your grievances and demands, which can be critical in any future legal proceedings.
For further clarifications, kindly drop your WhatsApp number.
Greetings,
You must appoint an internal auditor for the company to ensure legal compliance and have accurate accounts of the company's income. We are honored to provide you with legal support.
For further inquiries about your topic, you can visit our office or contact us via WhatsApp, phone, or email.
Dear Questioner,
Thank you for reaching out to me with your concern regarding your 49% share in the Dubai mainland LLC. I understand how frustrating and challenging this situation must be for you.
Given the circumstances you've described, there are several potential legal avenues that can be explored:
- Legal Notice:
Even if a legal notice might be ignored, it is still an essential first step in documenting your grievances and intentions. This formal communication can later support your case.
- Injunctions or Court Orders:
Depending on the details of your case, it may be possible to seek an injunction or court order to compel your partner to disclose financial records and prevent further unauthorized withdrawals.
- Corporate Governance Violations:
If there are breaches of the company's Memorandum of Association or other governance documents, you may have grounds to take legal action for breach of fiduciary duties.
- Mediation or Arbitration:
These alternative dispute-resolution methods can be faster and more cost-effective than court proceedings, especially in matters involving internal disputes between partners.
It's crucial to approach this matter with a strategy tailored to your specific situation, especially considering the lack of concrete evidence for breach of trust.
I would recommend scheduling a consultation so we can discuss the details more thoroughly and develop a solid plan to protect your interests.
Please feel free to reach out to me directly via WhatsApp or phone at [---------] to discuss further. You can also email me at [---------] if you prefer.
Best regards,
Suhail Rana
Dear Questioner,
While navigating this complex situation may seem daunting, taking systematic steps—documenting everything, seeking legal counsel, exploring mediation options, reviewing company bylaws, filing complaints if necessary, considering legal action, exploring buyout options, and preparing for potential outcomes—can help you regain control over your investment in the LLC.
Dear Questioner,
Your situation as a 49% shareholder in a Dubai mainland LLC with a partner who is withholding documents and mismanaging funds is challenging but not without options:
- Legal Notice:
Even though you believe it may be ignored, serving a legal notice is still important. It formalizes your concerns and serves as a starting point for any legal action. It can also be evidence that you have made a formal request for transparency and proper management.
- Immediate legal consultation is crucial.
- Serve a legal notice and consider requesting an independent audit.
- Enforce your right to access company records and potentially freeze the bank account.
- Consider mediation or arbitration before pursuing full legal action.
Taking these steps will help you protect your investment and seek a resolution to your dispute.
Contact AL Kaaseb Advocates & Legal Consultancy For a free consultation.
Thank you for reaching out regarding your situation with your LLC in Dubai!
It sounds like a challenging predicament, and I’m here to help you navigate your options. Here are some legal services and steps you may consider:
- Conflict Resolution and Negotiation:
Before escalating to legal proceedings, you might want to explore negotiation options with your partner. Sometimes, establishing a third-party mediator can facilitate discussions and lead to a resolution without litigation.
- Legal Consultation for Document Recovery:
Engaging a lawyer to assist in formally requesting access to company documents could be beneficial. While your partner may not comply, having legal support can strengthen your argument for transparency.
- Shareholder Rights:
Understanding your rights as a minority shareholder can provide insights into potential actions. You might have the right to call for a meeting or request specific actions, depending on the company's operating procedures and local laws.
- Legal Action for Breach of Fiduciary Duty:
While you mentioned a lack of concrete evidence, a consultation with a lawyer specialized in corporate law may help assess whether there is sufficient basis to claim a breach of fiduciary duties, such as misappropriation of funds or failure to act in the company's best interests.
- Exit Strategy:
If negotiations fail, you may want to explore your exit options from the LLC or find a potential buyer for your share. A legal professional can guide you through the process of divesting your interest in the company.
I recommend scheduling a consultation where we can discuss your situation in greater detail and explore the best course of action tailored to your circumstances.
You can contact us for legal advice and legal support via phone or email.
