Managers’ and directors’ duties and liabilities under the UAE law

Mojahed Al Sebae from the Corporate and Commercial Team at Galadari Advocates & Legal Consultants, discusses with us the duties and obligations of managers and directors, as well as the possible penalties, as per the current UAE laws and regulations.

Corporate governance is understood to be the system or set of rules, practices and processes by which a company is directed and controlled. It provides the framework for achieving a company’s goals or objectives. Therefore, it engulfs every aspect or administration falling within the management sphere.

One of the pivotal points in corporate governance is the Board of Directors which can have major ramifications on the company’s performance and liabilities. The Board of Directors is a decision maker body. Hence, the importance of clearly outlining the duties and liabilities of managers and directors of commercial companies.

The UAE legislation, and particularly the Commercial Companies Law, has set out general and specific duties and obligations that managers and directors should be aware of to avoid any violation. Stemming from three different legal bases, these duties and liabilities may be of civil nature or criminal nature.  Furthermore, the UAE legislation has introduced various penalties in case managers and directors’ violation of applicable laws or breach of contract.

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