Manager accountable for company’s losses?
I am a partner in a limited liability company (LLC) and I own 20% of the capital. Currently, the company is exposed to losses, and the company’s manager does not recognise these losses, and asks the partners to increase the capital to save the company, but all the partners refuse to increase the capital. My question: What is the legal action that must be taken in order to liquidate the company? Can the manager be held accountable for the losses incurred by the company? Please advise
Answer:
To answer this question, I would advise the following:
(1) As per Article 314, 316, 320 and 322 of the Companies Federal Law No. 32 of 2021, unless the Memorandum of Association or Statute of the Company provides for the method of liquidation or the partners agree otherwise upon the dissolution of the Company, the provisions of this Decree-Law shall apply to the liquidation of the Company. The liquidation shall be conducted by one or more liquidators appointed by the partners or under a decision by the general assembly or whomever is acting on its behalf, provided that the liquidator is not an auditor of the Company currently or has already audited its accounts within (5) five years preceding the appointment.
