LLC. Responsibility of managing


When registering a company in the UAE, the most popular type of company is a limited liability company (LLC). We will consider issues related to the responsibility for managing such a company.

Let’s talk about local UAE companies (LLC), not companies registered in the UAE’s free zones.

The UAE law on commercial companies, which came into force in 2015, made significant changes to the rules governing a limited liability company (LLC).

Article 218 of the Commercial Companies Law of the UAE defines a limited liability company as a company in which the liability of its partners is limited only by the size of their shares in the capital.

Responsibility of the manager when registering a company in the UAE

According to the law, the manager is responsible to:

– the company;
– shareholders;
– third parties (employees, creditors, customers and any other third parties that have entered into a contract with the company).

Duties of the manager when registering a company in the UAE

1. Act within the framework of the law, which means compliance with all laws issued in the UAE (both at the federal and local level).                                                                        2. Effective action in the interests of the company and shareholders, conducting an honest approach in business practice.
3. Protecting the rights of the company and acting in its interests in accordance with its purposes.
4. Fulfill his obligations with caution.
5. Preparation of the annual budget, calculation of profits and losses, preparation of an annual report on the company’s activities and financial position and ensuring their audit by the company’s auditor before approval and submission (within three months after the end of each financial year of the company), together with recommendations on distribution of profits.

The duties and responsibilities assigned to managers and directors may be either provided for in accordance with any legislation, laws and regulations issued by the state, or may be provided by a power of attorney issued in accordance with contracts, and may even be joint if there is more than one manager or director in the company (LLC).