I am a partner in an LLC company. One month ago, I was surprised to learn that a bank had filed a criminal fraud case and a civil case against the company manager and myself, although I am not involved in the company management and have not got any profits in the past two of my five years with the company. As a partner, am I liable?

A Limited Liability Company as defined by Article 71 of UAE Federal Law No. 2 of 2015 concerning the Commercial Companies (New LLC) came into force on July 1, 2015, replacing the existing Federal Law No. 8 of 1984 and its amendments concerning commercial companies. An LLC company is a company where the number of partners is at least two but shall not exceed 50. A partner shall be liable only to the extent of its share in the capital. A single natural or corporate person may incorporate and hold an LLC. The holder of the capital of the company shall not be liable for the obligations of the company other than to the extent of the capital as set out in its Memorandum of Association.

Therefore, a shareholder in an LLC is responsible only to the extent of his share/shares in the capital of the company. The exception to this general rule is that such shareholders will be personally liable, if they have exploited the principle of the independent liability of the company, conceal fraudulent acts or misappropriation of funds in order to cause harm to his partners or creditors. In such cases, the protection bestowed by law for a shareholder in a limited liability company will not apply. He will be held liable in his personal capacity for such disposition in a way that such liability will extend to his personal assets.

Two months ago, my employer terminated my service without reason. When I questioned the move, a week later my employer said I had caused a material loss to the company. And that my termination was due under Article 120. Is this justified?

As per the UAE Federal Labour Law No (8) of 1980 Article 120, an employer may dismiss a worker without notice in any of the following cases:

a. If the worker adopts a false identity or nationality or submits forged certificates or documents

b. If the worker is engaged on probation and dismissed during the probationary or on its expiry

c. If the worker makes a mistake resulting in substantial material loss for the employer on condition that he later notifies the Labour Department of the incident within 48 hours of his becoming aware of its occurrence

d. If the worker disobeys instructions respecting industrial safety or the safety of the workplace

e. If the worker does not perform his basic duties under the contract of employment and persists in violating them despite the fact that he has been subject of a written investigation for this reason and that he has been warned that he will be dismissed If such behaviour continues

f. If the worker reveals secrets of the establishment in which he is employed

g. If the worker has committed an offence involving honour, honesty or public moral

h. If the worker is found in a state of drunkenness or under the influence of a drug during working hours

i. If while working, the worker assaults the employer, the responsible manager or any of his work mates

j. If the worker is absent from his work without a valid reason for more than 20 non — consecutive days or more than seven successive days.