Investors from abroad can easily set up companies in Dubai and can appoint the board of managers they want. They have the possibility of choosing residents as part of this board or they can be in charge of this position. It is good to know that the managers of companies in Dubai have legal requirements but also moral ones, in order to properly run the business in Dubai and to act in the best interest of the firm. When deciding on starting a business in Dubai, the legal advice and support in this sense can be offered by our team of lawyers in Dubai.
A director’s duties and responsibilities
Foreigners can have 100% ownership in Dubai’s free trade zones and can appoint the board of managers as they wish. Sometimes, a resident can fill in such position, but there are cases in which they decide to take this place for a proper control of the activities involved. For instance, a director is in charge of running the business in a professional manner, leading it to progress and avoiding the cases of liquidation or bankruptcy.
The company director is appointed by the shareholders, and his/her obligations are as much towards the company as towards the shareholders, who must be informed of any changes regarding the company. The director also has to seek the shareholders' approval for certain matters and decisions. The director of a company in Dubai has the legal duty to ensure that that enterprise observes the requirements of the Dubai Companies Act. Changes in the company must be reported to the relevant authorities.
The limited liability company is one type of legal entity in Dubai that requires a company director or manager. Such companies must have between one and five managers. A limited liability company that has more than seven shareholders must also have a supervisory board. Our attorneys in Dubai can give you more information about the types of companies in Dubai and their organization. Also, we invite you to watch the following video about a director's duties in Dubai:
Liabilities for company directors in Dubai
The directors of a company in Dubai are liable towards the company, its shareholders and third parties for any acts of fraud, abuse of power and violation of the law or the company’s articles of association. They can also be liable for poor company management. Company directors can have criminal liability for making false statements, entering false information on corporate documents, willfully omitting substantial information or divulging company secrets for personal gain. They are also liable for conflicts of interest that may arise during the performance of the duties towards the company.
What happens in case of insolvency?
The directors of a company in Dubai are in charge of announcing the owners if the losses exceed 50% of the share capital. They can also propose the company liquidation, especially if the losses surpass 75%. In this situation, the business cannot meet the financial liabilities, and the board on managers must file for bankruptcy within 30 days, in accordance with the provisions mentioned by the Companies Act and the Commercial Transactions Law.
If you want complete information about the liabilities of company directors, we invite you to contact our law firm in Dubai.
There are no comments
*Click on the categories below for full list of articles