Commercial Cassation Judgment No. 600/2026 on LLC Partner Profits and Expense Reimbursements Following Partner Decease

Judgment summary

The Abu Dhabi Court of Cassation examined a dispute concerning a limited liability company following the death of one of its partners. The company originally sought payment from the deceased partner's heirs based on previously misappropriated funds, while the heirs counterclaimed for their inherited share of company profits and reimbursement of personal funds advanced to cover company operating costs. The Court affirmed that an LLC does not dissolve automatically upon a partner's death unless stipulated in the memorandum of association. Furthermore, the failure of management to hold general assemblies or formally approve financial statements cannot deprive partners or their heirs of proven net profits. Consequently, the Court partially quashed the appellate judgment, ordering the company to pay AED 391,075.8 as profit shares and AED 100,000 as reimbursed expenses.