Yes, you may sue a business partner who withdraws money from the company bank account without proper authorization, and such conduct may give rise to civil liability and, in certain circumstances, criminal consequences under UAE law. The outcome of each case depends on the company’s legal structure, internal governance documents, and the surrounding facts of the withdrawal.
Under the UAE Commercial Companies Law, a company has a legal personality separate from its partners or shareholders. Company funds belong to the company itself and may only be used for legitimate business purposes in accordance with the Memorandum of Association (MOA), Articles of Association (AOA), and approved shareholder or partner resolutions. Even where a partner has signing authority on the bank account, this authority does not grant unrestricted freedom to use company funds for personal benefit.
If a partner withdraws money without consent, beyond their authority, or for non-business purposes, affected partners may file a civil claim seeking recovery of the misappropriated funds and compensation for any resulting damages. UAE courts carefully examine documentary evidence, including bank statements, accounting records, internal approvals, email correspondence, and the MOA and AOA to determine whether the withdrawals were lawful.
In addition to civil liability, certain cases may also involve criminal exposure, particularly where there is evidence of intent to defraud, abuse of trust, forgery, or concealment. Criminal complaints are assessed by the public prosecution on a case-by-case basis and require a higher evidentiary threshold. Not every unauthorized withdrawal will lead to criminal proceedings, but serious misuse of company funds may trigger both civil and criminal action.
Timing is critical in such disputes. Delays in taking legal action may allow further depletion of company funds or weaken evidentiary claims. In urgent cases, courts may grant precautionary measures such as freezing bank accounts, imposing travel bans, or ordering provisional attachments to secure the disputed amounts pending final judgment.
Partners should also be aware that disputes of this nature often escalate quickly and may affect ongoing business operations. A strategic legal approach is therefore essential to balance recovery efforts with business continuity.
Professional legal advice is strongly recommended before initiating proceedings, as incorrect filing or jurisdictional errors can result in dismissal. DY Lawyers and Legal Consultants regularly advises shareholders and business partners on civil recovery claims, precautionary measures, and potential criminal exposure arising from unauthorized withdrawals, ensuring that legal action is taken efficiently and in compliance with UAE law.
Disclaimer: The content in this article is provided for informational purposes only and does not constitute legal advice.