Banking
New UAE Bankruptcy Law: Will company managers too be held liable for high-risk decisions?
New law goes into effect, and it comes with added scrutiny on high-risk decisions
The UAE’s new Bankruptcy Law has come into effect from May 1. This is seen as one of the high-stakes regulatory reforms that the UAE has initiated in recent years.
Dubai: The UAE’s new Bankruptcy Law has come into effect from today (May 1, 2024), and by this, even senior management figures at a company can be held responsible. Earlier, the onus and the liabilities associated with a company going bankrupt were primarily on the company’s directors.
“The new law extends the potential liability to de facto managers and any person responsible for the actual management of the company,” said Stephany Malhame, Senior Counsel – Dispute Resolution at the law firm Al Tamimi. “This may include controlling shareholders.