Understanding the level of responsibility upon attaining the position of a manager or director in any company registered within UAE is inevitable for any individual with such plans. A business organization has a legal status unmistakable from that of the individuals establishing it, yet it acts through its delegates, the administration. Regardless of whether they are partners, the managers of any company can be held professionally and personally liable for the acts committed by the company as a whole or by the partners. Nevertheless, the Corporate Lawyers of Dubai will herein discuss the liabilities of managers in for committing any fraudulent acts or fraudulent acts committed by the company registered within UAE.
The job of a manger will every now and again be referenced in the organization’s memorandum of association concerning explicit corporate functions and abilities. Nonetheless, the manager might be unconscious of the degree of these commitments and accept that the job as simply as a regulator of the company. Being considered as an agent of the company on its face, he shall be more involved and aware of his roles and responsibilities under UAE’s Commercial Companies Law.
In the Legal Parlance
There exist innumerable articles or provisions in the Commercial Companies Law of UAE which directs the roles and liabilities of a manager in any limited liability company, which has been discussed by Best Lawyers of Dubai on numerous occasions. Having said that, Article 22 of the Companies Law clearly outlines that a manager of the company shall apply the care of a reasonable individual and attempt all activities in accordance with the organization’s goals and the powers allowed thereto as per an authorisation given by the organization.
The afore-mentioned is the cautious provision for all the managers in UAE, whereas Article 84(1) of the companies’ law depicts the aftermath of violating Article 22. Article 84 of the Law expose the managers to a personal liability in event of any fraud committed or under following circumstances:
“Every manager in an LLC will be obligated towards the organization, partners and outsider for any fake activities he committed as a director. Further, he will be ordered to repay the organization for any misfortunes or costs brought about accordingly because of maltreatment of influence or infringement of the provisions of any law in power or the organization’s Articles/Memorandum of Association or his agreement of employment or because of gross blunder by the manager. Any arrangement included by the contract of appointment or the company’s MOA repudiating the provisions of this Clause will be invalid and void.”
The Court of Cassation in various judgments has agreed to the fact that managers are not legally obliged to pay debts of the company, unless there is a gross error. In addition, for any act committed by the manager which is against his duties as per company’s MOA or the Companies’ law, he shall be liable for such activities and shall pay damages for the same. It is always advised to all the individuals planning for registering themselves as a manager of any limited liability company to understand the very responsibilities and liabilities with help of Best Corporate Lawyer in Dubai.
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