For all executive decisions and day-to-day operations of a legal business formed in the UAE, whether it is situated on-shore or within one of the numerous free-zones, the General Manager is often given exclusive accountability. As a result, a UAE entity’s general manager typically serves as a “one-man” board of directors.

Contrastingly, in common law nations, the whole board of directors is frequently jointly accountable for exercising executive control in the capacity of a general manager. The legal entity’s constitution specifies the rights and authority of a general manager. These powers and authorities may be as expansive or as limited as the shareholders choose, and they may, if required, be reinforced by a power of attorney from the owners or partners.

LLC Manager

Due to the extensive powers and authorities granted to a General Manager, the laws in the UAE impose both civil and criminal liability on the General Manager with regard to the business, despite the fact that the shareholders of a limited liability company (“LLC”) in the UAE are generally protected by the company as they are in common law jurisdictions pursuant to the concept of the “corporate veil” (e.g. market forces, third party actions). A general manager’s exposure can include the following instances.

Commercial Law and a Firm’s Memorandum and Articles of Association

The Commercial Law and a firm’s Memorandum and Articles of Association are two of the laws that govern company administration in Dubai. The legal responsibilities and obligations of corporate managers or directors are also covered by these statutes.

Depending on the form of business, the company’s incorporation documents will provide distinct rules for its management. The joint-stock company (JSC) and limited liability company (LLC) are the two business entities that are most often registered in Dubai (JSC). Depending on the business’s areas of operation, other laws may also apply. The Commercial Transaction Act and the Penal Code both govern financial institutions and banking organisations in this situation.

Additionally, managers must abide by the corporate rules that are specific to each organisation.

Dubai LLC firm managers’ responsibilities:

Article 111 of the UAE Commercial Law contains the most significant regulations pertaining to the legal requirements of a management of a Dubai limited liability company. The law holds LLC firm management accountable for the following:

  • the business
  • the stockholders
  • unaffiliated parties

Clients, workers, creditors, and any other persons with whom the business interacts are all considered third parties.

Managers in Dubai may be responsible for:

  • fraud,
  • misuse of authority,
  • transgressions of the law or internal policies of the firm.

Dubai LLC managers’ responsibilities include:

  • to follow the rules set out by the law,
  • to operate honourably and in the company’s and the shareholders’ best interests,
  • to carry out their duties with caution.

You may get additional information about the obligations of managers of LLC firms from our attorneys at Sara Advocates and Legal Consultants.

Provisions of the Civil Code pertaining to Dubai LLC management:

Managers of LLC firms in Dubai must also be aware of the Civil Code’s requirements. According to Civil Code Article 665, a management may be held accountable for a company’s losses if they operate outside the bounds of their official duties. If a manager’s resignation hurts the business, they may also be held liable. Financial troubles are examples of hypothetical conditions under the Civil Code that might harm a business.

For more information consult Sara Advocates and Legal Consultants. You can visit our offices or call us at your ease. We will guide you and assist you in every way possible.