Business Partner Disputes in a UAE Mainland LLC

Two partners built the company together. One now runs it day to day, signs everything and has stopped sending the accounts. The other is still a partner on paper and finds that saying so changes nothing.

Business partner disputes in the UAE are rarely about who was right. They turn on what the memorandum of association says and on which provisions of the Commercial Companies Law the partner out of the room is willing to use. That law is Federal Decree-Law No. 32 of 2021, amended by Federal Decree-Law No. 20 of 2025, so the current edition is the one to read rather than the version that has been circulating since 2022.

Everything below comes from the chapter of that law dealing with limited liability companies, the structure most mainland businesses here are built in. A joint stock company follows different provisions. A company registered in DIFC, ADGM or another free zone may be governed by that zone's own companies regulations instead. Which regime the company sits under comes first.

The Memorandum Decides More Than the Trade Licence

Article 74 requires the company to keep a register of partners. Partners and any interested party have the right to inspect it. Article 79 governs how a membership interest moves. An assignment or a mortgage of an interest follows the memorandum, it has to be in an authenticated document and it is not enforceable against the company or against third parties until it is entered in the commercial register.

That last point ends a large number of arguments before they begin. A side agreement signed between two people, recording that one of them holds half the business for the other, may create obligations between those two people. It does not make the second person a partner in the company. The register does that.

A Minority Partner Is Not Locked Out

Article 92 is the provision most partners have never been shown. The manager must convene the general assembly at least once a year within four months of the financial year end. He must also convene it when partners holding at least ten percent of the capital request it. A partner with a small holding can therefore force a meeting onto the calendar.

Article 93 requires at least twenty one days notice by registered letter or an approved electronic method, carrying the agenda, the date, the time and the venue, with a copy to the competent authority. Article 100 requires the minutes and decisions to be kept in a register at the head office. Partners may inspect those along with the accounts and the annual report. Article 98 lets a partner question the managers and refer an inadequate answer to the general assembly, whose decision on the point is enforceable.

These are the provisions that convert a partner being ignored into a partner with a record.

Deadlock Has a Statutory Answer

Fifty fifty companies are where this becomes serious, because the assumption is that neither side can move without the other. Article 96 does not work that way. The quorum is partners holding at least half the capital unless the memorandum sets a higher figure. Where that quorum is not met, a second meeting is held between five and fifteen days later and it is valid whatever the attendance. Ordinary decisions are then taken by a majority of the interests represented at the meeting.

A partner who refuses to attend is therefore not blocking anything indefinitely. He is removing himself from the vote that follows.

The limits sit in Article 101. Amending the memorandum or changing the capital needs partners holding at least three quarters of the interests represented. Increasing the financial obligations of the partners needs unanimity. Where a capital increase is required to avoid liquidation or to pay creditors and that majority cannot be reached, any partner may apply to the court for a summary judgment ordering the increase.

The Manager Is the Pressure Point

Most of these disputes are not really between partners. They are between a partner and the partner who happens to be the manager. The law treats those two positions differently.

Article 85 allows the general assembly to remove a manager unless the memorandum or the appointment contract says otherwise, whether or not that manager is a partner. It also allows the court to remove a manager at the request of one or more partners where the grounds justify it. That second route is the one that matters where the manager controls the votes.

Article 84 sets the liability. A manager answers to the company, to the partners and to third parties for fraud, for abuse of power, for breach of the law, the memorandum or his appointment contract and for gross error. A clause in the memorandum or the contract that tries to remove that liability is void. Article 86 stops a manager from managing a competing company or trading in a similar line of business without the approval of the general assembly. A breach can lead to dismissal and to compensation. Article 99 prevents a managing partner from voting on his own discharge from liability.

Selling Out Runs Through the Other Partners

Article 80 is the provision people reach for when they want to leave. It is worth being precise about what it does. It applies where a partner has decided to sell his interest to someone outside the company. He notifies the other partners through the manager, each of them may request to redeem the interest within thirty days of being notified of the agreed price and a disputed price goes to experts. Where the thirty days pass unexercised he is free to dispose of the interest.

That is a pre-emption mechanism with a clock on it. It is not a right to require the company or the other partner to buy him out. Nor does it produce a valuation and a payment on demand. It starts with an outside buyer, which is the part a partner in a deadlocked fifty fifty company often does not have. Where the memorandum contains no exit mechanism of its own, that absence is usually the real problem.

The 2025 amendments allow membership interests to be divided into classes carrying different rights, recorded in the commercial register, which gives a memorandum room to deal with control and exit in advance. Article 76 leaves the classes, the conditions and the implementing procedures to be determined by the Cabinet, so what can be registered today is a question for the competent authority.

A File That Turns on the Record

Two partners hold a trading company equally. One has managed it since incorporation. For eighteen months there has been no general assembly, no audited accounts and no distribution, while a second company owned by the managing partner has begun invoicing the same customers. The other partner has WhatsApp messages and a sense of being pushed out.

Nothing in that file moves on the sense of being pushed out. When a matter of this kind reaches me as a Legal Consultant, the assessment starts with six things:

1. The current memorandum of association and every amendment to it, as registered
2. The register of partners and the commercial register extract, which show what is enforceable against the company
3. Whether the general assembly has been convened at all, with the notice given under Article 93
4. What has been requested in writing from the manager, in what terms and when
5. The financial record: the audited accounts, the bank mandates and the related party invoicing
6. Whether the objective is control of the company, payment or an exit, because the provisions used are different for each

The partner who writes first is usually in the stronger position a year later, whatever the merits were at the start. The Commercial Companies Law gives a partner a meeting, a record, a vote and a way out. None of those arrive on their own. The memorandum is where most of them are either protected or quietly given away.

The practice area page covers how commercial and corporate disputes are assessed.