Termination of the Companies Under the UAE Federal Decree-Law No. (32) of 2021 Concerning Commercial Companies: The Impact on Stakeholders

Abstract

Purpose: This Research investigates the termination of companies under the UAE Federal Decree-Law No. (32) of 2021 concerning Commercial Companies, and how this affects the labour force and causes them many psychological and human troubles. 
 
 Theoretical framework: The current research consists of an introduction and two sections, with conclusions and recommendations. The first section deals with the general reasons for the termination of a company, starting with a definition to the concept of termination. The second section focuses on the personal reasons for the termination of a company. We shall end our research with specific conclusions and recommendations.
 
 Design/Methodology/Approach: It should be noted that a descriptive/analytical approach has been adopted in this study, clarifying the concept of termination, and then addressing the general reasons that lead to such procedure, i.e., the termination of a company.
 
 Findings the paper: companies come to an end with the expiration of the period agreed upon by force of law, and by achieving the purpose of its establishment. Besides, they are terminated due to total or partial loss of capital. In some cases, a percentage of loss has been specified, as in the cases related to limited liability and joint stock companies.
 
 Research, Practical & Social implications: We suggest that a new clause shall be added to Article No. 302, related to the impossibility of the company continuing its activity in certain circumstances, including force majeure, Act of God, and other issues that the legislator deems necessary to state. Determining a period, in which the company’s manager is obligated to submit the termination issue to the general assembly if the company’s losses amount to half or three-quarters of the capital, and if the manager does not do so during that period assigned, partners with a quarter of the capital are entitled to invite the general assembly for a meeting to dissolve the company.
 
 Originality/Value: We propose to amend the first paragraph of Article (290) of the Decree- Law and make it obligatory for companies to announce their intention for merging in the newspapers to notify the creditors before the decision is taken by the company general assembly of the company within a certain period, for example, fifteen days to protect others and creditors and to avoid some creditors from objecting before the court regarding stopping the merger. This will benefit all parties, whether the creditors or companies wishing to merge.