Is the manager or shareholder liable to pay the debts of a limited liability company?

Hello, dear questioner,

Only the manager is not responsible for the company’s debt, but action may be taken against him in order to reveal the company’s property, while the contributing partner is obligated to part of the debt in what is called the solidarity of the partners in the debt, each of them according to his share in the company.

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Hello,

In limited liability companies (LLCs) under UAE law, shareholders are generally not personally liable for the debts of the company beyond the capital they have invested.

The liability of each shareholder is limited to their share in the capital of the company, meaning they are not responsible for the company's debts with their personal assets.

As for the manager, they can be held liable if they are found to have mismanaged the company or acted negligently in their role.

If the manager’s actions or failure to act result in financial losses or debts, they may be personally responsible to the extent of their negligence.

To avoid personal liability, a manager can demonstrate that the company’s financial difficulties or closure were due to external factors and not due to mismanagement.

Providing a thorough financial report, such as one proving bankruptcy or insolvency, can help establish that the company’s inability to pay debts was not a result of the manager’s negligence, thereby potentially exempting them from personal liability.

The director is not responsible for the company's debts except to the extent of his share in the company.

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Dear questioner,

Shareholders are not liable to pay for LLC debts.

Managers also are not liable, but managers have additional responsibilities and therefore if the LLC does not pay its debts, you can issue an arrest warrant against the manager provided that the conditions for arrest orders are fulfilled.

For more information, please contact us on WhatsApp [---------].

Dear Questioner,

The liability of a manager and shareholder in a limited liability company (LLC) is generally limited to their investment in the company.

This means that they are not personally responsible for the company's debts beyond the amount they have invested.

However, there are certain circumstances in which they become liable but if we could take good defense, it can be removed.

Dear Questioner,

Thank you for reaching out with your question regarding the liability of managers and shareholders in a limited liability company (LLC).

In general, a shareholder's liability in an LLC is limited to their share capital contribution, meaning they are typically not personally liable for the company's debts.

Similarly, a manager is not personally liable unless they have acted beyond their authority, engaged in fraud, or breached their fiduciary duties.

That being said, there are circumstances where a manager or shareholder could be held personally liable, especially if their actions directly contributed to the company's financial difficulties.

To ensure that you or your company are protected, it's important to have a legal review of your specific situation.

I would recommend setting up a consultation to go over your case in more detail, and I can provide you with a tailored strategy to safeguard your interests.

Please feel free to reach out to me via WhatsApp or phone at [-------] to discuss further.

Best regards,

Suhail Rana

Dear Questioner,

According to UAE law, a limited liability company is a separate legal entity from its shareholders and managers.

This means that the shareholders and managers are not personally liable for the debts of the company.

However, there are certain circumstances where a manager or shareholder may be held personally liable for the debts of the company. These include:

1. If the manager or shareholder has given a personal guarantee for the company's debts.

2. If the manager or shareholder has acted fraudulently or with gross negligence, leading to the company's inability to pay its debts.

3. If the manager or shareholder has used the company's assets for personal gain or to the detriment of the company's creditors.

In order to be exempted from paying the company's debts, a manager or shareholder must ensure that they do not engage in any of the above actions. They should also ensure that the company is properly managed and its finances are in order.

It is also important for managers and shareholders to regularly review the company's financial statements and ensure that the company is not incurring excessive debts that it cannot repay.

In case of any doubts or concerns, it is advisable to seek legal advice from a qualified lawyer.