Property Sector: To Directors Need To Consider Personal Liability Issues?

In brief:

• Despite the limited liability nature of companies, directors may incur personal liability for the debts and actions of the LLC if their behavior or corporate decisions are not within the boundaries of limitations set by UAE law.
• Directors can reduce their chances of being pursued for company debts and liabilities through the implementation of good corporate governance measures to ensure the commercial and legal reasons and assumptions behind their decisions are well documented to ensure there is a record to prove their actions were prudent and within the boundaries of the law.

In the current market situation, particularly as that relates to the liquidity strapped real estate sector, managers and directors should not put all their faith in the notion that the limited liability nature of the companies they own or manage will protect them in all situations. Whilst difficult for a third party to prove, there are likely to be situations where the manager