Khaleej Times, Monday, Feb 20, 2023 | Rajab 29, 1444
UAE: How investments are protected if your name is not mentioned on trade licence
Emirates:
Question: I have invested in a company in mainland Umm Al Quwain, but
my name is not mentioned on the trade licence. What kind of legal protection do
I have as an investor?
Response: Pursuant to your query, it is assumed that you are an
expatriate who has invested in a limited liability company (the ‘LLC’) based in
the mainland of Umm Al Quwain. Therefore, the provisions of Federal Law No. 5 of
1985 on the Civil Transactions Law of the United Arab Emirates (the ‘Civil
Transactions Law of UAE’) are applicable.
As your name is not included as a shareholder in the LLC, it is recommended you
enter into an investment agreement with the company. The agreement shall include
details of your investment, including your entitlement of profit and repayment.
Further, you may obtain security cheque(s) from the LLC against your investment
and include the details of the same in the agreement.
In the event the LLC defaults on paying you the profits or fail to refund the
investment amount on your request, you may consider filing a payment order case
in Umm Al Quwain (as the LLC is located in Umm Al Quwain). Further, you may also
consider filing a civil case against the LLC in a court in Umm Al Quwain which
has jurisdiction to hear the matter in accordance with Article 272 of the Civil
Transactions Law of UAE. In order to further protect your investment and subject
to the consent of the shareholders of the LLC, you may consider becoming a
shareholder of the LLC.
For further clarifications on this matter, it is advised to obtain detailed
legal opinion from a practitioner based in the UAE.