1. Is it possible to form a company in view of offering carriage services under the Laws...

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Question:

1. Is it possible to form a company in view of offering carriage services under the Laws of UAE?

2. Is the participation of Firas in the Company possible under the Laws of UAE?

3. What are the different forms of shares in the company set forth in the text?

4. Could you calculate the amount of capital dedicated to the Company?

5. Is there a difference between appointing the manager in the deed of partnership or by an act of the partners?

6. What is the significance of anticipating the possibility of distributing the surplus liquidation of the company between the partners’ heirs?

7. Is it acceptable to exonerate Firas from assuming losses when he stops acting as manager of the company? What is the consequence of such a term in the deed of partnership?

8. Does Omar’s withdrawal entail the nullity of the agreement made by the partners? Could the remaining partners still draft the deed of partnership with the concourse of the Attorney?

Mohamed is a UAE citizen wishing to establish a business consisting in offering services of carriage of goods; therefore, he decided to dedicate 5,000,000.00 AED to his project. However, he called his cousin, Ahmed, and his two friends, Hussein, and Omar, for a meeting. All the attendees are UAE Citizens.

During the meeting, Mohamed exposed the project of establishing the carriage business and asked the attendees to join him in running the business. They all accepted to be part of it. Ahmed proposed to offer the three lorries he owns for a value of 1,000,000 AED; Hussein proposed to share with 200,000 AED beside managing all the business finances, since he is holding a Bachelor of Business; Omar announced that he could just offer the business the modest sum of 50,000 AED and thus, proposed to introduce Firas, a Lebanese friend of his, in the project, for a share of 4,000,000.00 AED. In a phone call between Omar and Firas, the latter accepted to join the project under condition that he should be appointed manager of the Company formed in the deed of partnership itself. Mohamed objected to this proposition but accepted that Firas be appointed by act of the partners first manager of the Company for a duration of five years, which was agreed by Firas.

The duration of the Company was agreed to be 25 years at the end of which, the Company shall be subject to liquidation and distribution of the surplus between the partners or their heirs. It was agreed that Firas shall be exonerated from assuming any losses after he leaves the administration of the Companies, considering that he shall not get any indemnity for ruling the Company during the first five years of existence. No further terms on distribution of profits and losses were discussed by the partners.

At the end of the meeting, the attendees checked hand and a meeting was agreed to be held the following day at an Attorney Office for the signature of the contract of partnership. Two hours prior to the meeting at the Attorney Office, Omar declared withdrawing from the project but confirmed the participation of Firas in the project.