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The Legal Obligations of a LLC Manager in Dubai

The Legal Obligations of a LLC Manager in Dubai

Company management in Dubai is regulated by several laws among which a company’s Memorandum and Articles of Association and the Commercial Law. These laws also provide for the legal duties and obligations of company directors or managers. The company’s incorporation documents will establish different regulations for its managers depending on the type of entity. The two most frequently types of companies registered in Dubai are the limited liability company (LLC) and joint-stock company (JSC). Other laws also apply depending on the company’s objects of activity. This is the case of financial companies and banking institutions which fall under the governance of the Penal Code and the Commercial Transaction Act.

Additionally, each company will have its own corporate regulations managers are bound to respect.

The duties of LLC company managers in Dubai

The most important provisions on the legal obligations of a manager of a Dubai limited liability company are comprised in Article 111 of the UAE Commercial Law. According to the legislation, LLC company managers are liable to:

  • –          the company,
  • –          the shareholders,
  • –          third parties.

Third parties can refer to clients, employees, creditors or any other party coming into contact with the company.

Dubai managers can be held accountable for:

  • –          fraud,
  • –          abuse of power,
  • –          violations of the legislation or of the company’s internal regulations.

The duties of LLC managers in Dubai are:

  • –          to act within the confines of the laws,
  • –          to act honestly and in the best interest of the company and the shareholders,
  • –          to execute their obligations with care.

Our lawyers in Dubai can provide you with more information related to the legal duties of mangers of LLC companies.

Civil Code provisions with respect to Dubai LLC managers

Managers of LLC companies in Dubai must also pay attention to the provisions of the Civil Code. Article 665 in the Civil Code specifies that a manager can be held liable for a company’s losses if they act outside the scope of their job. Managers can also be accountable if their resignation harms the company. Under the Civil Code potential situations that can cause damage to a company are financial difficulties.

For complete information about the duties and obligations of managers towards a company, please contact our law firm in Dubai.