Q: I own 2 small companies in the UAE. One of them is having some liquidity issues. If the assets don't cover all the payables, can they go after my other company's assets? A: If the companies are independent and separate from each other, the liability of one should not transfer to the other…

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Company liability toward another company of the same owner

Hello,

I own 2 small companies in the UAE. One of them is having some liquidity issues and we are considering all options like financial restructuring, liquidation or bankruptcy.

In the event of the liquidation, if the assets don't cover all the payables, can they go after my other company's assets?

Elias Aoun

Maha Bin Hendi Law Firm

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18 Mar 2019, 09:27

Generally, if the companies are independent and separate from each other, the liability of one should not transfer to the other.

However, if one company is a branch of another, the answer would be different, depending on how they are set-up.

A lawyer would need more information, or reviewing your incorporation documents, before giving you a more definite answer.

18 Mar 2019, 15:28

How about the possibility of a civil case for unpaid payables claim, and that the claimant wins the case?

19 Mar 2019, 05:21

We have to read the documents to provide you with a definite answer.

We have to see the court order and the incorporation documents for the two companies to verify how they are set-up.

You can email me the documents to e.aoun@mbhlawfirm.com

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Company liability toward another company of the same owner