Removing a partner from a company is a not the easiest task. Usually court orders the liquidation of the company instead of partner removal if the partners do have the disputes. This complex procedure is governed by specific legal provisions and Dubai Courts do provide very fair verdicts. But Dubai Lawyers are also needed for such partnership remove or dissolve cases. It is possible to remove a partner by this should happen according to the laws and regulations. Therefore, it requires strict adherence to specific terms and conditions that are vividly outlined in the law.
Civil Law is applicable:
The Civil Transactions Law is applied when removing a partner in a company. This will allow for the removal of a partner once the majority of partners agree. Moreover, there should be serious grounds to do so. As we said above liquidation is one of the possibilities or partnership removal can also be another possibility. However, the reason for removal must be valid, legal, significant, and adequately justified. Nonetheless, the partner can request to leave the partnership if he wants to. In case the partnership has a fixed duration, still the partner can choose to leave but must adhere to the stern guidelines outlined by the laws of the UAE.
Valid Reasons:
For instance, in such cases, the partner must provide valid reasons for leaving the partnership. They will request the court that requires approval. Higher Court of Dubai is involved in the process of removal of partners in the company. According to the law, an emphasis is placed on the difficulty of removing a partner from a limited liability company (LLC).
The court will give the ruling only when the company is operational. Moreover, the partner must retain their shares within the company. Besides, it is not permissible to simply remove the partner just because they have shares in the company. The law clearly states that the relationship between the partner and the company is not based on personal choices or considerations. The court will take into account that a company is not harmed by a partner merely owning shares.
Nevertheless, the partner has the liability that arises only if they are involved in managing the company. Any actions that cause damage in any capacity due to management are considered.
Financial Entitlements of Partner-Directors depend on the company MOA. Furthermore, other than a Memorandum of Association, other labor contracts are considered when deciding about the financial entitlement of a partner who is acting as a director.
If the MOA specifies the salaries, the partner-director can claim the salaries as per the contract. They can make valid claims within two years. It is done through the civil courts of the UAE.
In case the salaries are agreed upon in a separate labor contract, the partner-director can make the claims. As per the law, they can only claim the salaries of the last year. This claim must be pursued in the UAE labor courts.
Certain steps must be followed before removing any Partner. We will discuss in detail every step to navigate the readers through the complicated procedure.
The process begins with gathering evidence. It is essential to collect all the necessary documents and papers that can be used as evidence. This will support the grounds for the removal of a partner from the company.
The majority needs to agree to the removal of partners to make it happen practically.
It is essential to file a request. The request is submitted to the courts in the UAE. The request must contain the details regarding the partner’s removal. The reasoning must be valid, justified, and serious.
The court will carefully review the pieces of evidence. Besides, as per the court proceedings, the judges and juries will hear the case. In case, if the court finds a solid basis for removal they will approve. The justification must be valid before it is authorized.
It is essential to comply with the court order concerning the removal process. It is integral to adhere to the law to ensure any financial settlements.
The role of the lawyer is crucial. The well-versed and well-equipped lawyer and legal consultant’s role is to navigate through the legal complexities of removing a partner.
They provide expert legal advice according to the law. Besides, they assist in gathering and preparing all necessary documents needed to collect evidence to support the legal case.
Nonetheless, they ensure the action takes place by compliance with all legal procedures. The UAE court will further order to avoid any legal repercussions. The lawyer will navigate through the complex legal provisions and judicial precedents of the UAE law.
The process of removal of a partner from the company requires substantial justification. Henceforth, it is subject to the court’s discretion.
Professional lawyers and legal consultants help in understanding the nuances of the law and regulation. They assist clients in understanding their legal and financial rights within the corporate structure.
A lawyer’s guidance is imperative to ensure the process is handled smoothly and efficiently within the legal framework. Besides, they also work to safeguard the interests of all stakeholders involved.