Can declaring bankruptcy protect civil company partners from rent-related travel bans?

Hello, dear questioner,

Yes, you can initiate bankruptcy proceedings for a company facing financial lawsuits. The decision will be made by the company's legal representative, i.e., the owner or manager.

After bankruptcy is accepted, the financial lawsuits will be dropped, and any resulting procedures, such as travel bans or arrest warrants, will be cancelled.

We can handle the matter for further discussion.

Please share your WhatsApp number!

Dear Inquirer,

Thank you for your message!

Under UAE law, civil companies do not have a separate legal personality from their partners, meaning bankruptcy proceedings must typically be filed by or against the partners individually, not just the company.

Key Legal Points:

Yes, partners in a civil company can file for bankruptcy, but they remain personally and jointly liable for the company’s debts.

Filing for bankruptcy does not automatically lift travel bans, arrest warrants, or execution orders. These measures may only be suspended or lifted by court order after filing, depending on the circumstances.

If the landlord is the primary creditor, a full bankruptcy may not be the most practical route, especially given the legal costs and time involved.

All partners remain jointly and severally liable, even during bankruptcy, unless the court rules otherwise.

We recommend booking a consultation to assess your legal position and determine whether bankruptcy or negotiated settlement strategies may be more suitable.

You can book a consultation or authorize our office directly via our website.

Dear Questioner,

Thank you for raising this important issue!

Below are the legal and practical implications of initiating bankruptcy proceedings for a civil company in Dubai under UAE law:

- Can a civil company file for bankruptcy?

Under UAE law, a civil company does not have a separate legal personality with independent liability—its partners are personally and jointly liable for the company’s debts. Therefore, the civil company itself cannot file for bankruptcy. Instead, the partners must individually file for bankruptcy in their personal capacity due to their joint and several liability.

- Impact on ongoing execution cases (e.g., landlord’s case):

Once a bankruptcy application is filed and accepted by the court, a temporary suspension (stay) of all execution proceedings may be ordered, pursuant to Article 32 of the UAE Bankruptcy Law (Federal Law No. 9 of 2016). However, this suspension is not automatic and must be formally communicated to the execution court handling the landlord’s case.

- Travel bans and arrest orders:

Travel bans and arrest orders are not automatically lifted upon filing or even accepting the bankruptcy application. A specific request must be submitted to the bankruptcy court seeking suspension or cancellation of these measures. The court may consider such requests if it finds the debtor is cooperating and acting in good faith.

- Is bankruptcy advisable when the landlord is the only major creditor?

Bankruptcy may not be the most efficient solution if the landlord is the sole or main creditor. In such cases, a settlement, debt restructuring, or negotiated payment plan may be more practical, cost-effective, and quicker. Filing for bankruptcy is complex, lengthy, and public, and may have long-term implications on the personal and financial status of the partners.

- Are partners still jointly liable after filing for bankruptcy?

Yes. Filing for bankruptcy does not automatically release the partners from their joint and several liability. The court may eventually discharge debts under certain conditions, especially if the partners can prove they acted in good faith and did not engage in fraud, gross negligence, or misconduct.

- Legal Recommendation:

We recommend conducting a full legal and financial review of the company’s obligations and partner exposure before considering bankruptcy.

We also suggest exploring the possibility of initiating a protective composition (preventive settlement) or negotiation with the landlord before taking any formal insolvency steps.

Our firm is available to assist you with a comprehensive review and representation before the relevant courts.

Best regards,

The civil company can file a bankruptcy case.

When bankruptcy proceedings are opened, the execution procedures will be canceled, except for the travel ban, which will remain in place until the case concludes and the bankruptcy ruling is issued.

Bankruptcy has several procedures, including that the company must have significant debts and more than one execution file.

Therefore, contact us so we can assist you.

Hello,

Thank you for your message!

1. A civil company in Dubai can file for bankruptcy under UAE law; partners do not need to file individually unless personally liable.

2. Once bankruptcy proceedings are accepted by the court, ongoing execution cases—including travel bans, arrest orders, and license freezes—are generally suspended.

3. Travel bans and arrest warrants against partners may be lifted after bankruptcy approval, but personal liability or criminal matters can affect this.

4. Bankruptcy is a serious step and may not always be advisable if the landlord is the only major creditor; negotiating a settlement might be better.

5. Partners remain jointly and severally liable even after bankruptcy unless the court releases them or debts are fully settled.

If you need assistance with filing for bankruptcy or legal advice tailored to your situation, please let me know. I’m here to help.

Best regards,

Thank you for contacting us via Legal Advice Middle East.

There are several legal pathways depending on the company’s structure and the execution stage, but the most effective route in your case is a carefully strategized bankruptcy filing, if supported by clear financial insolvency and intent to liquidate properly.

We recently advised on a nearly identical case where a civil company in Dubai faced execution actions due to unpaid commercial rent. Our intervention through the bankruptcy framework helped protect the partners from personal arrest measures and allowed a structured closure with creditors.

A civil company in the UAE can file for bankruptcy, but because partners in civil companies are jointly and severally liable, they may also need to file individually, especially if execution measures are already active against them.

Filing for bankruptcy does not automatically suspend existing execution cases or lift travel bans and arrest orders. However, once the court accepts the bankruptcy and appoints a trustee, you can file a petition to suspend enforcement measures.

Our legal team has successfully obtained such suspensions after court acceptance in similar situations.

If the landlord is the only or main creditor, bankruptcy may not always be the ideal route unless there’s clear insolvency and no possibility of settlement. It’s a serious process requiring comprehensive court oversight, and it may result in broader legal and reputational consequences for all partners.

Importantly, even after filing, partners in a civil company remain jointly liable until the bankruptcy process is fully adjudicated and the court discharges them or limits their liability through the restructuring or liquidation decree.

We recommend urgent legal review of the execution file, company documents, and the nature of the liabilities.

Our multilingual team (Arabic, English, Russian, Hindi, Chinese) is ready to assist you with filing the appropriate petitions and advising on the most protective course for all involved.

Are travel bans and detention orders lifted immediately?

Detention or travel ban orders are not automatically lifted upon filing the application.

They are only lifted when the court accepts the bankruptcy application and issues a decision to open the proceedings.

You can file a request to suspend temporary enforcement orders (travel bans and detentions) as part of the bankruptcy application or as a separate request pursuant to Article 167.

Practical Advice: If you face the risk of imprisonment or a travel ban, bankruptcy is a legal means of temporarily freezing these proceedings.

Thank you for your detailed enquiry!

I understand you're facing significant pressure due to a landlord’s execution case against your civil company and its partners, including yourself, with travel bans, arrest orders, and licence suspensions already in effect. These are serious and urgent matters that require a strategic legal response.

To clarify your concerns, yes, a civil company in Dubai can initiate bankruptcy proceedings under UAE law. However, since a civil company is not a separate legal entity in the way an LLC is, the liability often flows directly to the partners.

This means that while the company itself can be the subject of a bankruptcy filing, the partners may also need to participate in the process individually to obtain protection and relief from personal enforcement measures.

Filing for bankruptcy does not automatically suspend existing execution actions or lift travel bans and arrest warrants. These need to be specifically addressed as part of the court-supervised bankruptcy process, which includes requesting a stay of individual enforcement actions.

However, the court may, depending on the facts, freeze all execution measures once the bankruptcy is admitted and proceedings officially commence. Until then, enforcement actions typically continue.

Whether bankruptcy is advisable in your case depends on various factors: the scale of debt, whether there are other creditors beyond the landlord, the company’s assets, and the partners’ financial exposure.

If the landlord is the only major creditor, there may be faster and more cost-effective solutions such as negotiation, partial settlement, or even seeking judicial composition without full bankruptcy.

It’s also important to note that partners of a civil company are jointly and severally liable, even after bankruptcy proceedings begin. Bankruptcy does not erase personal liability unless all steps of the process—including discharge—are successfully completed.

Given the complexity and the real impact on your freedom and business continuity, I strongly recommend we speak directly to assess the best legal and financial route forward.

Please feel free to reach out to me on WhatsApp or call me at [-----------] to discuss your case confidentially and explore the next steps.

Dear Questioner,

Thank you for your inquiry regarding the bankruptcy of your civil company and the related landlord execution case.

To clarify:

A civil company’s partners are generally personally liable, and depending on your company’s legal structure, either the company or the partners may need to file for bankruptcy individually.

Filing for bankruptcy can provide protection against creditors, but existing execution cases, including travel bans and arrest warrants, are not automatically lifted upon filing. You would need to apply to the court or bankruptcy trustee for their removal.

Bankruptcy may be a viable option if the landlord is the major creditor; however, it involves a formal process and implications for partners’ liability and credit.

Partners in civil companies are usually jointly and severally liable for debts, and bankruptcy does not automatically relieve this liability.

If you provide your company documents, I can review and advise you on the best course of action, including bankruptcy filing or negotiating with the landlord.

Please let me know how you would like to proceed.

Best regards,

Mohammed Salah

Legal Consultant

Dear questioner,

Yes, a licensed civil company can file for bankruptcy. Once the court accepts the application for bankruptcy proceedings (either Preventive Settlement or Financial Restructuring), a moratorium (suspension) on claims generally comes into effect.

This means that all legal actions, including existing execution cases and enforcement measures, against the debtor (your company) are typically halted or suspended.

Upon the official acceptance and commencement of bankruptcy proceedings by the court, these related civil travel bans and arrest warrants should generally be lifted.

If you need our assistance in filing the bankruptcy for the company, please share your WhatsApp number.

Hello,

Thank you for your inquiry regarding the bankruptcy implications for your civil company in Dubai and the related execution case initiated by your landlord.

Based on UAE Federal Decree-Law No. 51 of 2023, a civil company is permitted to file for bankruptcy independently of its partners.

However, partners in such entities remain jointly and severally liable for the company’s obligations, particularly if mismanagement is established and the company’s assets cover less than 20% of the total debt.

Initiating bankruptcy triggers a legal moratorium, which can temporarily suspend ongoing enforcement actions, including execution cases.

That said, it does not automatically lift any travel bans, arrest orders, or licence freezes already issued—these require separate court motions or creditor consent.

Given that the landlord appears to be the sole or primary creditor, a structured settlement or negotiated payment plan may prove more efficient and less risky than formal bankruptcy proceedings.

Nevertheless, if debts are overwhelming and settlement is not viable, we can explore protective restructuring or preventive composition options under the Bankruptcy Law.

Should you wish to proceed, we recommend a detailed review of your company’s financials and legal position to determine the most effective course. Please let us know a convenient time to schedule a full consultation.

Best regards,