In the UAE, the process for lawfully removing a manager from a company is governed by Federal Decree-Law No. 32/2021 on Commercial Companies. This comprehensive legislation outlines the procedures and requirements for the management and operation of various types of companies, including Limited Liability Companies (LLCs).
Within this decree-law, clear guidelines and procedures are provided to ensure a smooth and lawful transition in cases where the removal of a manager becomes necessary. Specifically, Article 85 of the decree law addresses the position of the office of the manager and outlines the procedures for their dismissal.
- According to Article 85, the dismissal of a manager can arise through the decision of the general assembly of partners or by court order. If the Memorandum of Association or the contract appointing the manager does not specify the method of dismissal, the general assembly has the authority to dismiss the manager, whether they are a partner in the company or not. Additionally, one or more partners in the company may petition the court for the dismissal of the manager if it deems such dismissal justified.
- Additionally, Article 85 outlines the process for the resignation of a manager. The manager also has the option to submit a written resignation to the general assembly. In this case, the general assembly may issue its decision on the resignation within 40 days from the date of submission. If no decision is made within this period, the resignation is deemed effective unless the Memorandum of Association or the appointment contract specifies otherwise.
- Moreover, Article 85 mandates that the company must notify the Competent Authority of the termination of the manager’s appointment within 30 days from the date of termination. A replacement may be appointed within this period to ensure the continued management of the company’s affairs.
It’s important to note that the dismissal of a manager may be conducted in accordance with the provisions laid out in the company’s Memorandum of Association or contract of appointment. Any dismissal that violates these provisions may result in legal consequences.
Furthermore, Article 84 of the decree law emphasizes the liability of managers for any fraudulent acts, abuse of power, or gross errors committed during their tenure. This article underlines the importance of adhering to legal and ethical standards in managerial roles and provides a basis for the removal of a manager who fails to meet these standards.
In summary, understanding the legal procedures outlined in Federal Decree-Law No. 32/2021 is crucial for lawfully removing a manager in the UAE. By seeking Legal Consultation and adhering to these provisions, companies can facilitate smooth transitions in management while maintaining integrity and legal standards.
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