New solutions to manage partnerships in UAE
A high number of small businesses in the United Arabs Emirates are set up as partnerships with two people becoming shareholders. Some of the policiesmade with innovative solutions to address some of the issues associated with the model.
Under the current laws, if one of the partners were to die or suffer a critical illness, their holdings pass on to the next-of-kin and not the co-director, who has worked to build the company. There are now policies in place to address the issue that will allow the unaffected partner to take full control of the company and ensure financial compensation to the family of the deceased shareholder if they decline to take a holding in the business.
Dubai-based financial planning company Guardian Wealth Management (GWM) has said that it is coming up with a partnership assurance policy that will assure business partners. Experts said that such assurance policieshelp cover the costs as of the affected director's stake in this case. Under the policy, the company takes out life cover on its key employees and becomes the beneficiary of the policy.
HamzahShalchi, who manages GWM's Dubai operations, said, "In all the excitement of setting up and running a company with a business partner, it's understandable that no one wants to consider what happens in the event of a tragic accident or illness.But after such an unfortunate event, there is a real possibility that businesses can fall apart without the proper planning and agreements in place. Everything that the partners have worked so hard together to achieve can suddenly be lost."
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