portfoliocompany’s profits that exceeded 300 million dirhams

5 July, 20200

According to federal law no.2 of 2015 regarding commercial companies in the United Arab Emirates, every company, each company does not take any of the following forms (partnership, limited partnership, limited liability company, public corporation, private corporation) will be considered null.

It is obvious that undisclosed partnership -not common form- is not one of them, however, that does not mean the loss of the partner’s right in undisclosed partnership in the United Arab Emirates.
Shura legal experts succeeded while representing our claimant client to claim his entitlement to the company’s profits that exceeded 300 million dirhams blocked by other partners, citing article no.9 from commercial companies law which states that each company does not take any form defined by the law considered invalid, especially this company did not reform its conditions and the other partners adhered to the invalidity of the company and blocked the budget from our client.

The esteemed court adopted our vision that legal assessment of a company as an undisclosed partnership does not exclude that company is a de facto company, however, the decision stipulates that when and if a company is considered void by law, Or if a ruling was issued stating that a company is null and void after its incorporation and commencing its activity, then the effect of nullity does not go back to the past so that the contractors are returned to the position they were before the contract, for fear of cracking stable legal centers and wasting the rights of others who dealt with the company in good faith, or wasting rights Partners.
Hence, the esteemed court supported our defense in applying de facto company theory which stipulates that the company is real from the day of its structure until the nullity judgment. So partners’ obligations and the company’s obligations remain correct and binding and rules of distributing profits and losses according to the company’s contract and ruled for our client his full profits.

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