Federal Decree-Law No. 32 of 2021 on Commercial Companies governs the procedure for dismissing a manager from a UAE company. This law established guidelines for managing and regulating various types of businesses, including LLCs. As a result, this decree-law ensures that any such change is made legally and without disruption, hence offering clear instructions and guidelines to be followed during the management dismissal process. Article 85 of the commercial companies clarifies the manager’s position and outlines the steps for dismissal.
In accordance with Article 85, a manager may be terminated by a court order or the decision of the general assembly of partners. The general assembly has the power to terminate the manager, regardless of whether he is a partner in the company. Unless the method of dismissal is not specified in the memorandum of association or the contract appointing the manager.
Additionally, one or more partners in the company may petition the court for the manager’s dismissal if it considers such termination legitimate.
In addition to this, Article 85 stipulates the procedure for the resignation of a manager. The manager may also have 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. Unless otherwise specified in the appointment contract or the memorandum of association, the manager’s resignation is deemed effective if no decision is made within this time frame.
Further under the same Article 85 states that, the companies are required to inform the competent authority regarding the termination of a manager’s appointment within 30 days from the date of termination. Within this time, a replacement may be appointed in order to guarantee that the company’s affairs are managed efficiently.
According to the UAE commercial companies law, the dismissals of the managers might also be done by following the procedures in the memorandum of association of the company or the contract of their appointment. The dismissing party may face legal penalties for any further dismissals that contradict these clauses. Apart from that, managers may be responsible for any unethical behaviour, exploitation of power, or serious mistakes made during their term of office under Article 84 of the Commercial Companies Law. The same Article emphasizes the importance of adhering to legal and ethical standards in managerial roles and establishes the reason for dismissing a manager who fails to meet these standards.
The Commercial Companies Law permits managers of UAE companies to be legally dismissed. These regulations may help companies manage transitions in an ethical and legal manner.
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