The Scope of Managerial Authority in UAE LLCs
Under Federal Decree-Law No. 32 of 2021 on Commercial Companies, the manager of a Limited Liability Company (LLC) serves as the primary legal representative. Their authority is typically derived from the Memorandum of Association (MOA) or a specific Power of Attorney. While managers are granted broad powers to conduct day-to-day operations, these powers are not absolute and must be exercised in the best interest of the company.
Fiduciary Duties and Standards of Care
Managers are legally obligated to act with the care of a 'diligent person.' This includes maintaining transparency, avoiding conflicts of interest, and ensuring that all actions align with the company's objectives. Failure to adhere to these standards can lead to claims of professional negligence or breach of trust.
Personal Liability and Legal Consequences
While an LLC generally protects individuals from personal liability, a manager can be held personally liable to the company, the shareholders, and third parties for any fraudulent acts, abuse of power, or violations of the law. Exceeding the limits of their delegated authority without prior approval may result in the manager being solely responsible for the resulting financial obligations.