Can I take charge as manager if my business partner can't fly back to Dubai?

Dubai - Know your legal rights in the UAE.

Read more...

By Ashish Mehta

Published: Sun 16 Aug 2020, 1:02 PM

Last updated: Wed 30 Jun 2021, 2:34 PM

Question: We have an LLC company in Dubai and I am a 25 per cent shareholder. My partner, who left the UAE, is a 24 per cent shareholder and the manager, according to the memorandum of association of the company. However, he is unable to come back to the country and, because I am not the manager, I cannot deal with the affairs of the company. How do I take charge as a manager in the absence of my partner?
Answer
We assume that the shareholder who holds 24 per cent of shares in the capital of the limited liability company (LLC) is a foreign national. The provisions of Federal Law No. (2) of 2015 on Commercial Companies (Companies Law) are applicable. 
It should be noted that in the UAE, a limited liability company's day-to-day affairs are run by the manager, according to Article 83 of the Companies Law. 
Based on the law, you as a partner shall not be in a position to manage the company's affairs as your name is not mentioned as the manager in the memorandum of association. However, as the foreign shareholder is outside the UAE, you may request him to issue a suitable power of attorney authorising you to represent him before any government authority to sign any forms and amendment to the memorandum of association of the LLC, in order to replace him as the manager.
This power of attorney should be notarised and legalised by the Ministry of Foreign Affairs and the UAE embassy in the country where he is currently located. Thereafter, it must be attested by the Ministry of Foreign Affairs and International Cooperation in the UAE. 
Upon the completion of these attestations, the power of attorney must be legally translated to Arabic by an authorised translator in the UAE. It also has to be attested by the Ministry of Justice. 
Simultaneously, the foreign partner needs to send his resignation as the manager of the LLC to all the partners and the copy of this may be submitted to the relevant authority in the UAE. This is in accordance with Article 85 (2) of the Companies Law, which states that: "The manager may file a written resignation to the General Assembly, with a copy to the competent authority. The General Assembly shall decide in such resignation within 30 days from the date of submission, otherwise his resignation shall be effective upon the expiry of this period, unless the memorandum of association of the company or the contract appointing the manager provides otherwise."
This resignation should also be notarised and legalised by the Ministry of Foreign Affairs and the UAE embassy in the country where the current manager resides.
It is recommended that you approach a legal counsel in the UAE for further advice.
Know the law

An LLC company in the UAE must be run by a manager or managers named in the memorandum of association. 
Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.
 

Ashish Mehta

Published: Sun 16 Aug 2020, 1:02 PM

Last updated: Wed 30 Jun 2021, 2:34 PM

Recommended for you