Liability Of The Shareholders And Managers In LLC
Introduction
- what forms of the commercial companies shall be established in United Arab Emirates?
Article no. (5) of commercial company law
A company shall have one of the following forms
- Partnership company
- Limited partnership company
- Limited liability company
- Public joint stock
- Private joint stock
- If Any company established in other than those forms it will be valid?
Any company established in other than those set out in the above clause shall be invalid and the persons who enter into contracts in the name of such company shall be jointly and severally responsible for the obligations arising out of such contracts.
- What’s the most established company in United Arab Emirates and why?
the Limited liability company is the most established in UAE
Article no. (71) of commercial company law provides:
Company definition
Limited liability company is an association of a maximum no. of fifty and minimum of two partners, each of them shall be liable only to the extent of his share in the capital
this is the main reason that you will not be liable personally and jointly for the company’s obligations, just in you’re the extent of your share in the capital
- What main liabilities of shareholders?
Each shareholder in a limited liability company liable only in to the extent of his share in the company according to article no. 71 of commercial company law:
Liability of Shareholders in a Limited Liability Company:
liable only to the extent of his share in the capital
However, The Dubai Court of Cassation in its rulings established some exceptions to reach the shareholders personal assets provided the satisfaction of certain extraordinary specific circumstances.
- What main liabilities of managers?
Each manager in limited liability company shall be liable towards the company, partner’s and others for his committed acts due to misuse of powers including any acts of fraud he commits, concealed or damage or change part of company’s books, embezzled company’s properties according to more than one legislation as follows:
Liabilities of managers according to commercial company law:
Article no. (84) commercial company law provides:
- Each manager in limited liability company shall be liable towards the company, it’s partners and others for any acts of fraud he commits. He shall also indemnify the company for any losses or expenses incurred due to misuse of powers and for any act of default with regards to any applicable law, the company’s memorandum of association or maladministration by the manager. Any provision to the contrary in the company’s memorandum of association or the manager’s appointment contract shall be hereby revoked.
- Liabilities of managers according to DIFC Companies Law
The DIFC Law no. 8 of 2018 (“DIFC Companies Law”) has clarified provisions on manager’s liabilities. of the DIFC Companies Law provides that there’s no act of the manager shall be treated as a breach if all the shareholders of a company authorize.
- What’s the duties of the managers to act within powers?
Duties of the managers within his power shall act in a good faith and in accordance with the articles of association of the company as follows:
Article no. 69 DIFC Laws Provides
A Director of a Company shall: (a) act in accordance with the Articles of Association of the Company (b) only exercise his powers for the purposes for which those powers have been conferred.
Article no. 70 DIFC Laws Provides(1) A Director of a Company shall act in the way he considers, in good faith, would be most likely to promote the success of the Company for the benefit of its Shareholders as a whole, and in doing so, have regard, amongst other matters, to:
(a) the likely consequences of any decision in the long term.
(b) the interests of the Company’s employees.
(c) the need to foster the Company’s business relationships with suppliers, customers and others.
(d) the impact of the Company’s operations on the community and the environment.
(e) the desirability of the Company maintaining a reputation for high standards of business conduct.
(f) the need to act fairly as between Shareholders of the Company.
(2) To the extent that the purposes of the Company consist of or include purposes other than the benefit of its Shareholders, the reference to the benefit of Shareholders in Article 70(1) has effect as if it included those other purposes.
(3) The duty imposed under this Article has effect subject to any law applicable to the Company requiring Directors, in certain circumstances, to consider or act in the interests of a Company’s Creditors.
Article no.72 provides DIFC Laws Provides
Duty to exercise reasonable care, skill and diligence A Director of a Company shall exercise the care, skill and diligence that would be exercised by a reasonably diligent person with:
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the Director in relation to the Company.
(b) the general knowledge, skill and experience that the Director has
Article no. 73 DIFC Laws Provides
- Is the manager allowed to accept any benefits from the third party?
The main rule a manager of a company shall not accept a benefit due to his position because of a conflict of interest and he also obliged to avoid conflict of interest as we will discuss below.
Article no 73 DIFC Laws Provides
Duty not to accept benefits from third parties
(1) A Director of a Company shall not accept a benefit from a third party where the benefit is conferred on him: (a) due to his position as a Director of the Company;
(b) for him doing (or not doing) anything as a Director, unless the acceptance of such benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.
(2) A “third party” in Article 74(1) means a person other than the Company, an associate of the Company or a person acting on behalf of the Company or an associate of the Company. (3) In Article 74(2), an “associate” in relation to a Company means:
(a) the Company’s Subsidiaries, and all the Subsidiaries in the chain of Subsidiaries in which the Company is the Ultimate Holding Company;
(b) the Company’s Holding Company, and all the Holding Companies up to the Ultimate Holding Company of the Company, and the Subsidiaries of each of those Holding Companies.
(4) Any reference in this Article to a conflict of interest includes a conflict of interest and duty a conflict of duties.
Duty to avoid conflicts of interest
(1) A Director of a Company shall avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or may possibly conflict, with the interests of the Company.
(2) The duty under Article 73(1) applies in particular to the exploitation of any property, information or opportunity.
(3) The duty under Article 73(1) does not apply to a conflict of interest arising in relation to a transaction or arrangement where the requirements in Article 75 or Article 77 as applicable, are met. (4) A Director of a Company does not contravene the duty under Article 73(1) if:
(a) the situation cannot reasonably be regarded as likely to give rise to a conflict of interest;
(b) the Directors of the Company have authorized the situation in accordance with the Articles of Association and any applicable provisions of the Law.
(5) A Company’s Articles of Association may, subject to Article 73(4), include alternative procedures for avoiding conflicts of interests. A Director does not contravene the provisions of this Article by acting in accordance with such procedures.
(6) Any reference in this Article to a conflict of interest includes a conflict of an interest and a duty and a conflict of duties.
Wow, wonderful blog layout! How long have
you ever been running a blog for? you make blogging glance easy.
The total look of your site is wonderful, as neatly as the content material!
You can see similar here sklep internetowy
What’s up, I log on to your new stuff regularly. Your story-telling style is witty, keep up the good work!
I saw similar here: Sklep online
Wonderful beat ! I would like to apprentice while you amend your web site, how could i subscribe
for a blog website? The account helped me a appropriate deal.
I have been a little bit acquainted of this your broadcast offered
vibrant clear idea I saw similar here: Sklep
Howdy! Do you know if they make any plugins to assist with Search
Engine Optimization? I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good gains.
If you know of any please share. Many thanks! You can read similar text here: Sklep internetowy
Howdy! Do you know if they make any plugins to help with SEO?
I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good results.
If you know of any please share. Appreciate it! You can read similar art here:
Najlepszy sklep
It’s very interesting! If you need help, look here: ARA Agency
It’s very interesting! If you need help, look here: ARA Agency
Hi! Do you know if they make any plugins to help with SEO?
I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good success.
If you know of any please share. Thank you! You can read similar art here:
Najlepszy sklep
Hey! Do you know if they make any plugins to assist with SEO?
I’m trying to get my blog to rank for some targeted keywords but I’m
not seeing very good gains. If you know of any please share.
Many thanks! You can read similar article here:
Sklep online
Thanks for the auspicious writeup. It in fact was
a entertainment account it. Glance advanced to more brought agreeable from
you! By the way, how could we be in contact?
Hi are using WordPress for your site platform? I’m
new to the blog world but I’m trying to get started
and set up my own. Do you require any coding knowledge
to make your own blog? Any help would be really appreciated!
My programmer is trying to convince me to move to .net from PHP.
I have always disliked the idea because of the expenses.
But he’s tryiong none the less. I’ve been using WordPress on a
number of websites for about a year and am concerned about switching to
another platform. I have heard great things about blogengine.net.
Is there a way I can transfer all my wordpress posts into it?
Any help would be really appreciated!
I like the helpful info you provide in your articles.
I will bookmark your weblog and check again here frequently.
I’m quite certain I will learn a lot of new stuff right here!
Best of luck for the next!
all the time i used to read smaller articles or reviews that also
clear their motive, and that is also happening with this piece of writing which I am
reading here.
Having read this I believed it was extremely enlightening.
I appreciate you spending some time and effort to put
this content together. I once again find myself personally spending way too much time both reading and
commenting. But so what, it was still worthwhile!
We are a bunch of volunteers and starting a brand new scheme in our community.
Your web site provided us with useful information to work on. You have done an impressive job and our entire community shall be thankful to
you.
Hi there, just became alert to your blog through Google, and found that it is truly informative.
I am going to watch out for brussels. I will appreciate if you continue this in future.
Many people will be benefited from your writing. Cheers!
What’s up, the whole thing is going nicely here and ofcourse every one is sharing data, that’s
actually good, keep up writing.
Everything is very open with a very clear description of
the issues. It was definitely informative. Your website is very helpful.
Many thanks for sharing!
Write more, thats all I have to say. Literally, it seems as though you
relied on the video to make your point. You definitely know what
youre talking about, why waste your intelligence on just posting videos to your blog when you could be giving us something informative to read?
5 Killer Quora Answers On Playboy Pornstars Playboy Pornstars
We absolutely love your blog and find a lot of your
post’s to be exactly what I’m looking for. Do you offer guest writers to write
content in your case? I wouldn’t mind writing a post or elaborating on some of the subjects
you write with regards to here. Again, awesome blog!
My family all the time say that I am killing my time here at web, however I know I am getting
knowledge daily by reading such good posts.
Hi there, I want to subscribe for this weblog to take
latest updates, thus where can i do it please assist.
Hi there, I desire to subscribe for this web site to take latest updates, so where can i do it please assist.
This is a really good tip especially to those new to the blogosphere.
Simple but very accurate info… Many thanks for sharing this one.
A must read post!
I am now not sure the place you’re getting your info,
but good topic. I must spend a while studying much more or figuring out
more. Thanks for excellent info I used to be searching for this information for my mission.
Woah! I’m really enjoying the template/theme of this website.
It’s simple, yet effective. A lot of times it’s challenging to get that
“perfect balance” between user friendliness and visual appeal.
I must say that you’ve done a amazing job with this. Additionally, the blog loads super fast for me on Chrome.
Excellent Blog!
Five Killer Quora Answers To Accident And Injury Attorneys Accident and Injury attorneys
12 Facts About Accident Attorney Lawyer To Make You Think Smarter About Other People accident
attorney new jersey (Kieran)
Howdy would you mind stating which blog platform you’re working with?
I’m planning to start my own blog in the near future
but I’m having a hard time selecting between BlogEngine/Wordpress/B2evolution and Drupal.
The reason I ask is because your layout seems
different then most blogs and I’m looking for something unique.
P.S Apologies for getting off-topic but I had to ask!
Great post.