Tag: business lawyers

Company Restructuring Law in Dubai UAE

RESTRUCTURING PROCESS IN UAE

CORPORATE RESTRUCTURING PROCESS IN UAE | LEGAL GUIDE

Corporate restructuring in the event of bankruptcy or liquidation is a legal means resorted to by companies to significantly modify the operational aspects of the company. This could include financial, technical or organizational changes aimed to correct any operational issues that could led to company’s distressed. Restructuring process is a complex process and solutions must be thoroughly tailored enlisting appropriate guidelines to ensure that specific needs and objectives of the company are addressed fully.  Corporate lawyers in Dubai will be able to put together a customized plan of action for you and your company to go through the process smoothly.

UAE Federal Law governing bankruptcy, restructuring and insolvency are embodied primarily under the following legal framework and legislations:
• Federal Law No. 18 of 1993 (the “Commercial Code”)
• Federal Law No. 2 of 2015 (the “Companies Law”)
• Federal Law No. 5 of 1985 (the “Civil Code”)
• Federal Law No. 3 of 1987 (the “Penal Code”)
• Federal Law No. 11 of 1992 (the “Civil Procedures Law”)
• Federal Law No. 10 of 1980 (related provisions concerning bank liquidation and other financial institutions)

Corporate restructuring process often resorted to could be:

BANKRUPTCY PROCEEDING

• Filing of bankruptcy before the court
• Court will appoint expert to determine the veracity of the petition filed
• If the court is satisfied that bankruptcy is an appropriate measure, then the court will adjudicate an order and appoint a trustee to administer the proceeding
• Bankruptcy order will be made available to the Ministry of Economic and relevant Commercial Register and UAE Central Bank
• Bankruptcy adjudication summary will be published is daily newspapers as specified by the court, this must include invitation to the company creditors to have their debts recorded in the bankruptcy and creditors must subsequently submit a statement setting out their claims against the petitioner.
• Trustee will then deposit with the court a document listing all the company’s creditors and their claims including the securities held against those claims
• The court will then issue statement setting forth the claims of creditors which have been accepted and the court rules on objections.

LIQUIDATION PROCEEDING (WINDING-UP OF THE BUSINESS)

Under UAE Law, liquidation and dissolution of company is a process of bringing a business to an end. This is a tedious process as this involves liquidating the shares and assets, collecting debts and paying the creditors’ or discharging liabilities towards creditors. A Company may be dissolved on any of the following grounds:
• Depletion of company’s assets which renders the remaining assets of the company unbeneficial
• Expiry of the term of the company as specified in its constitutional documents
• Fulfillment of the company’s objectives as stated in its memorandum of association
• Amalgamation of the company
• Shareholders decision as set out in the company’s memorandum of association

Initial step in liquidation proceeding must be initiated by publicly declaring it through registration in the Commercial Register and publication in two local daily Arabic newspapers.

Subsequently, a liquidator will be appointment (could be by shareholder’s decision or by court order) primarily to ascertain the company’s assets and liabilities. This will in effect vest all the company’s board power in the liquidator, this includes the ability to commence or defend legal claims and to take steps necessary for the protection and preservation of the company’s assets.

Liquidator will notify all known creditors to submit their claims and for unknown creditors, notice will be made by publication in two local daily Arabic newspapers. Creditors are given 45 days from notice to present a claim or any debt disputed.

Company assets will be liquidated accordingly (payment of creditors / shares distribution to shareholders ratably. Final account will be submitted by the liquidator and upon ratification of the shareholders, liquidation will cease and will be noted on the Commercial Register. The company will then be struck off the Commercial Register.

AL REYAMI ADVOCATES ARE DEDICATED PROFESSIONALS WHERE YOU CAN GET IN TOUCH WITH FOR INITIAL CONSULTATION. WE CAN GUIDE YOU THROUGH ALL STEPS AND PROVIDE YOU UTMOST LEGAL ASSISTANCE THROUGHOUT THE PROCESS.

 

 

liability manager

Limited Liability Manager in a UAE Company

Liability of Managers and Directors in an LLC Company in Dubai UAE

The formation of a Limited Liability Company in UAE is the widely used and adapted method by expat as it gives them ownership of 49% in a local business partnership.

The manger in a limited liability company can be appointed for a specified length of time or for an unlimited time. The appointment is to be made and governed under a memorandum of association (although at times can also be determined via a side bar agreement).

A general manger has the authority to take any action or decision in the best interest of the company. If it is stated in the memorandum of association that the manager cannot be removed then the only way to apply for his dismissal is to hold a vote with the shareholders to do so. It is important to note that the manager will still be held responsible and liable for his actions as the GM even after his or her removal.

In the event a third or external party files a complaint or case regarding any illegal or fraud the general manager can be held liable in his personal capacity.

business dispute law in dubai

Business Disputes in the UAE

Business Lawyers in Dubai | Contact Lawyers for Business Disputes in UAE

Commercial disputes between companies, companies and customers or even between partners can cause a great deal of distress. They can also , in some instances lead to loss of valuable time, lost business and even bring about the collapse of a business venture in its entirety. Generally, amicable settlement of such a dispute would be beneficial to all parties in its speed and efficiency, even when at times it feels like a compromise you may not want to make. Understanding the ‘bigger picture’ and the potential damage of a protracted dispute is often much clearer in hindsight (when it’s too late). To that end, below is the list of top tips to help resolve a dispute:

a) Gather as much evidence as you can through witness statements in the initial stages; don’t forget, the people involved may be expats and may not be around later to provide the supporting evidence required. Such evidence is useful in determining the events of a situation but may not be necessarily favored for use in court where evidence of fact carries more weight (contracts and breaches of contract terms). Such evidence though is very useful in assisting your legal counsel to effectively drafting each memorandum (the submissions made to court for a case).

b) Try to negotiate with the other party/parties and have a strategy for what you would like to achieve from the discussions. If in your communications a response is requested by email within a certain period, try and follow that to avoid adding complications to the situation that detract from the main issues. Stay on topic. You are attempting to resolve the situation rather than create new arguments or debates.

c) The dispute should be managed by one person from the company, as the central point of contact and the person responsible for taking the required actions. This helps reduce the risk of contradiction or confusion that can easily come about from the different interpretations of the same information that are often present. This also helps to keep the correct focus on what you are looking to achieve and will assist with a clear and clean hand-over to your lawyers should they need to become involved.

d) If you need to extract evidence from a company asset (computer, laptop or smart phone for example) it is advisable to seek professional help to recover it. This limits the risk of not only losing the information but also the risk of suggesting the information has been manipulated or tampered with.

e) It seems an obvious point but one that is all too frequently ignored. Always read and understand every element of a document before you sign your name to it (particularly if it is not in your first language). By signing, you are agreeing to the content which may bind you personally and or the company you represent to actions and liabilities.

f) Although many legal documents in the UAE will have this phrase as a point of ‘best practice’, it does not carry the same legal authority in the UAE system. Without Prejudice is used in negotiations in other countries to ensure concessions made or information shared during negotiation cannot be used against you if a case goes to court as specific evidence. It can be used against you in the UAE regardless of whether the term was used.

g) UAE law favors documentary proof over and above oral (spoken) statements. There is no dramatic court room cross examination as seen in the movies, cases in the UAE are largely fought to a written strategy where the power, structure and content of the legal argument in writing will have the biggest influence on the outcome.

h) When terminating a contract, seek professional legal advice. There are often elements that can remain open for interpretation or action should this not be done in a way that actually closes the contract obligations between the parties. Obvious examples would include specified warranty periods or retention payments that may exist after the contact termination.

i) If you are going to need the support of good lawyers, get them involved as early as possible. Experience in dealing with these matters can avoid costly delays and the possibility of saying or writing the wrong thing that can alter the course of the negotiation and impact the liability to which a party is held. Delaying can also cost you more as there may be significant extra work to repair the damage done before bringing in the experts.

corporate lawyers in dubai

The importance of Hiring a Corporate Business Lawyer

Hiring a Corporate Lawyer in Dubai | Hire Business Lawyer in Dubai UAE

As the owner of your own business, you will at some point require a lawyer to assist with any number of legal issues from company documentation and contracts through recovery of unpaid invoices to handling labour disputes. In an ever-changing legal environment, particularly in the UAE where the pace of growth is prolific, legal complications can crop up at any time and having the right Corporate Lawyer at your disposal can be invaluable.

How can a corporate lawyer help you?

1- Protect your legal interests
2- Labor issues
3- Partnership disputes
4- Financial help (banking issues and unpaid invoices)
5- Facilitate mergers & acquisitions
6- Preparation of legally sound contracts to protect you and your clients interests and intentions.

Corporate Lawyer Assistance – What are the benefits?

1- Due to the complexity of the laws, it is difficult for a businessman to follow and understand let alone doing so at the same time as running a business. Your corporate lawyer can remove this burden allowing you to focus on what you do best.
2- The frequent changes in law make it tricky for a business person to keep track and can be caught out unknowingly. A good Corporate Lawyer will be up to date with these changes and advise you how and when to adapt.
3- A lawyer may perform a dual role by acting as a legal advisor and legal counsel to the firm at the same time.
4- You can conduct your business safe in the comfort that the legal processes binding your contracts and agreements are effective.

Check out legal consultants in Dubai for more details about how they can help.