Corporate and commercial
Shareholder and Partnership Disputes
You stopped receiving the management accounts three months ago. The bank mandate has been changed. A payment went out to a company you have never heard of, and the partner who signed it is not returning calls. Or the reverse: your co-founder stopped working and still expects half the profit.
Licensed advocate practice, licence 593372.
First ten minutes free, with the advocate.
Dubai courts, and coordination for Abu Dhabi.
Proceedings in Arabic, explained to you in plain terms.
The short answer
These disputes rarely begin with a single dramatic act. They begin with information being withheld, and by the time the problem is visible one side usually controls the accounts, the licence renewal and the staff visas. What you do in the first two weeks affects the whole outcome.
We are a licensed advocate practice in Dubai. Our corporate and commercial lawyers in Dubai page covers company structuring and agreements. This page is what a shareholder dispute lawyer in Dubai deals with once the relationship has broken down. Call +971 50 747 9570 or email help@lawyerindubai.ae.
How these disputes usually start
Deadlock
A company owned equally by two shareholders, with no casting vote and no deadlock clause, can stop functioning entirely while remaining perfectly solvent. Nothing is approved, nothing is signed, and the business loses value every month the argument runs.
Exclusion from management
One shareholder is removed from the bank mandate, taken off the email system, or simply no longer told when decisions are taken. This is the most common complaint we hear, and it is usually the point at which someone finally asks to see the corporate records.
Profit that stops being distributed
The company is trading well but nothing is declared. Instead the money leaves as salary, management fees, rent to a related party, or director loans to one side only. Distribution disputes are rarely about the accounts being wrong. They are about what the money was reclassified as.
Unauthorised transfers and related party dealings
Payments to an entity connected to one shareholder, purchases at prices nobody approved, or assets moved into a new company set up in parallel. These need the documents secured quickly, because the records sit with the side that made the payments.
Valuation on exit
Everyone agrees one shareholder should leave. Nobody agrees what the shares are worth. A large share of disputes sit here, and it is the category most capable of settling once there is a credible valuation on the table.
A partner who stopped contributing
Two people started a business, one carried on working and the other did not, and the shareholding still says fifty fifty. Unless something was recorded at the time, the register generally governs, which is why contributions are worth documenting as they are made.
What actually governs the dispute
The constitutional documents
The memorandum and articles set out who owns what, how decisions are taken, what majorities are needed and how shares can be transferred. Most arguments about entitlement are settled by reading these first, and most people have never read theirs. Voting and quorum requirements differ by legal form and by what was adopted on incorporation, so we work from your documents rather than a general rule.
The shareholders agreement, if there is one
A shareholders agreement covers what the constitutional documents do not: reserved matters, information rights, deadlock resolution, pre-emption, tag along and drag along, restrictive covenants, and the mechanism for valuing shares on exit. Where one exists and is properly drafted, it usually shortens the dispute considerably.
Where there is no agreement at all
Many Dubai companies were incorporated quickly with standard documents and nothing between the owners. That is workable until it is not. Without an agreement, the position falls back on the constitutional documents and the law, which will not reflect the informal understanding the founders had.
Free zone and offshore entities
A company registered in a free zone is governed by that zone’s own company regulations, and the position can differ from the onshore position on transfers, remedies and dispute forum. DIFC and ADGM entities sit under a separate framework again. We confirm the applicable regime before advising on remedies.
The first steps when it starts
Secure the records
Get copies of the trade licence, the constitutional documents, the share register, the accounts, the bank statements and the board minutes while you can still obtain them. Access is often the first thing withdrawn, and a dispute run without documents is run blind.
Keep the company alive
Licences expire, establishment cards lapse and visas run out regardless of who is right. Part of the work in any shareholder dispute is keeping the entity compliant while the substantive issue is resolved, because a company that loses its licence mid-argument is worth less to everyone.
Do not act outside your authority
Changing locks, moving funds, cancelling visas or signing for the company without authority converts a strong position into a weak one, and can create exposure beyond the commercial dispute. Check what you are entitled to do before you do it.
The remedies available
A negotiated buy-out
One side buys the other out. This resolves most disputes that are resolved at all, because it is the only outcome that lets the business keep trading. The negotiation is usually about price and about how deferred payments are secured, not about principle.
Claims against a manager or director
Where a manager has acted outside their powers, taken value out of the company or caused it loss, there are routes to hold them accountable, and these can run alongside a claim between shareholders. What is available, and who has standing to bring it, depends on the legal form.
Challenging a decision
A resolution passed without proper notice, without a quorum, or outside the powers in the constitutional documents can be challenged. These challenges are time sensitive.
Dissolution and winding up
Where the relationship cannot continue and nobody will buy, a court can be asked to dissolve the company. It is a real remedy and also the worst commercial outcome for both sides, which is why it is more often a lever towards a buy-out than an objective.
Interim protection
Where assets are being moved, a precautionary attachment or another interim measure may be available while the substantive dispute is decided. It has to be supported by evidence and it is time sensitive.
Valuation and the role of the expert
Why valuation decides most cases
Once both sides accept that someone is leaving, the only live question is price. That makes valuation the centre of the dispute rather than a technical afterthought, and it is worth investing in a credible position early.
What the agreement says about valuation
If the shareholders agreement contains a valuation mechanism, read it before commissioning anything. A mechanism that fixes a formula, a valuer or a date can produce a very different figure from an open market valuation, and one side is usually better served by it.
Court appointed experts
In litigation the court will often appoint an expert to examine the accounts and report on value, on disputed transactions, or on both. In practice the report frequently decides the outcome, so the expert stage is where the work goes: indexed documents, a clear written submission, and attendance prepared.
Court or arbitration
What the documents say
The first question is not which forum you prefer but which one you agreed to. If the shareholders agreement or the constitutional documents contain an arbitration clause, that generally governs. Whether the clause is valid, and who had authority to agree to it, can itself be disputed.
When arbitration suits the dispute
Arbitration is private, which matters when the dispute involves allegations about how money was handled and the business has customers and bankers watching. It can also be conducted in English. It is not automatically faster or cheaper. Our arbitration and dispute resolution lawyers in Dubai page sets out the process.
When the court is the right forum
Court is the route where there is no arbitration clause, where the remedy sought is one only a court can give, or where measures against assets are needed quickly. Onshore proceedings are conducted in Arabic and documents require legal translation. Our civil litigation lawyers in Dubai page covers the stages.
Partnership disputes across the UAE
Shareholder dispute lawyers in Dubai see the same problems in partnerships and in unincorporated joint ventures, with one difference: the liability position between partners can be wider than between shareholders in a limited company, and that changes the risk of letting a dispute run. A partnership dispute in the UAE is decided on the partnership contract, the licence and the conduct of the parties.
What to bring to the first meeting
The trade licence. The memorandum and articles and any amendments. The share register. Any shareholders or partnership agreement, including drafts that were never signed. The most recent accounts, bank statements and details of the payments you are concerned about. The correspondence where the problem first appeared, and a short written timeline. Copies are fine at this stage.
Questions shareholders ask us
I am a minority shareholder. Do I have any real options?
Yes, though they depend on the legal form, the constitutional documents and what can be proved about how the company has been run. The starting point a corporate lawyer in Dubai will take is information: what the accounts show, what was resolved, and what was paid out. Options narrow considerably if you wait.
Can I force the other shareholder to buy me out?
Not automatically. Whether you can compel a buy-out depends on what the shareholders agreement provides and on the remedies available for the conduct complained of. In practice a buy-out is usually reached by negotiation, supported by a credible valuation and a claim that is ready to be filed.
Can I stop the other side moving the company’s money?
There are interim measures aimed at exactly this, and they depend on evidence and on acting quickly. If you believe funds are being moved, take advice now rather than after the next transfer.
What does a shareholder dispute cost?
It depends on whether it settles at the negotiation stage, whether an expert valuation is needed, and whether it runs to a hearing. We scope this work in stages so you can decide at each stage whether to continue, and our legal fees page explains how our charges are structured.
Speak to a shareholder dispute lawyer in Dubai
If you have been shut out of a company you part own, or you are the one being accused, the first step is the same: establish what the documents actually say and what the records show. That assessment usually takes one meeting, and it decides everything that follows.
Call +971 50 747 9570 or email help@lawyerindubai.ae with the trade licence, the constitutional documents and any agreement between the owners. Our office is at Empire Height Towers, Marasi Drive, Business Bay, Dubai. You can also use the form on our contact page.
Related pages: corporate and commercial law, arbitration and dispute resolution, civil litigation, legal fees.
What this costs
The first ten minutes are free. After that a standard fee applies and you are told what it is, in writing, before any work starts. Court and government fees are set by the court and are separate from ours.
Tell us what happened
Ten minutes, no charge, and a straight answer about whether you need a lawyer for this.