A mainland LLC is run by **managers** whose authority comes from the Memorandum of Association and the trade licence — not by a board of directors with the powers a common-law director has. And a third party dealing in good faith may rely on **apparent authority**, so internal limits that are not in the constitutional document may not bind them.
Governance
Managers, directors, duties and delegated authority
A mainland LLC is run by managers whose authority comes from the Memorandum of Association and the trade licence — not by a board of directors with the powers a common-law director has. And a third party dealing in good faith may rely on apparent authority, so internal limits that are not in the constitutional document may not bind them.
| Item | Detail |
|---|---|
| Entity | [COMPANY NAME], [licence] [NUMBER] |
| Entity type | [Mainland LLC / Free zone / DIFC / ADGM] |
| Governing body | [Manager(s) / Board of Directors] |
| Named on the licence | [NAMES] |
| Constitutional powers set out in | [MOA / Articles] |
| Delegated authority matrix | [Adopted on ______] |
| Meeting frequency | [Quarterly] |
| Minute book held by | [NAME] |
| Insurance — directors and officers | [INSURER], expiry [DATE] |
| Reviewed | [DATE] |
1. Who Actually Runs the Company
| Mainland LLC | Free zone | DIFC / ADGM | |
|---|---|---|---|
| Governing body | Manager(s) | [Manager or director — per the zone] | Board of Directors |
| Source of authority | MOA and trade licence | Zone articles | Articles and common law |
| Named publicly | On the licence | On the licence | On the register |
| Change requires | Notarisation and licence amendment | Zone process | Board resolution and register update |
| Duties | Statutory and under the MOA | Per the zone | Common law and statutory duties |
| Personal exposure | Real — see Section 3 | Real | Real |
1.1Documents drafted on a board model can sit oddly against a mainland LLC. Match the language to the entity — resolutions referring to "the Board" where the constitution knows only managers create ambiguity about who decided what.
2. Authority and Its Limits
2.1The manager’s or board’s authority derives from the constitutional document. Anything not conferred there is not conferred.
2.2A third party dealing in good faith may rely on apparent authority. An internal limit that does not appear in the constitutional document or the licence may not bind that third party, even where the manager exceeded it.
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A mainland LLC is run by managers whose authority flows from the Memorandum of Association and the trade licence, not by a board with common-law director powers. Resolutions and policies drafted on a board model create ambiguity about who actually decided. Match the language to the entity.
A third party dealing in good faith may rely on the manager’s apparent authority. A limit recorded only in an internal policy, and not in the constitutional document or the licence, may not protect the company against a commitment made beyond it. Where a limit genuinely matters, put it in the constitution.
Meetings held here with directors physically present support economic substance evidence, corporate tax residence and a QFZP claim at the same time. Meetings held by video from overseas support none of them, and this is the single most common substance failure.
A minute recording that a decision was taken proves attendance. A minute recording why it was taken — what was considered, what the alternatives were — is what defends it if it is later questioned by a shareholder, an auditor or a regulator.
Related party transactions attract scrutiny in diligence, in audit and under transfer pricing. A declaration recorded before the decision, with the interested party abstaining, converts a suspicious-looking transaction into a documented one.
Duties change where the company may be unable to pay its debts. Continuing to trade as before, or paying connected creditors ahead of others, is where personal exposure crystallises. This is the point at which advice is cheapest and most valuable.
Penalties for the entity’s defaults — filings, wage payment, permit contraventions — can attach to the individuals responsible. Anyone named on a licence should understand what they are exposed to before accepting the role.
Cheques signed on the company’s behalf carry consequences that changed materially with the 2022 reforms, and the position for a signatory acting for a company warrants specific advice. Do not treat cheque signing as a routine administrative act.
Directors’ and officers’ insurance should cover the individuals actually named on the licence and performing the role, including anyone appointed mid-year. Policies frequently lag behind changes in management.
Limits set at incorporation reflect a much smaller business. A matrix that requires shareholder approval for routine expenditure gets ignored, and one with limits far too high provides no control at all. Both failures are common.
A resolution without the corresponding authority approval proves a decision was made, not that it took effect. Constitutional changes on the mainland require notarisation and approval, and both belong in the file together.
Gaps prompt questions about what is missing. A simple numbered register makes the governance history legible and takes minutes to maintain.
A departed manager still on a bank mandate is among the most common live control failures found in diligence. Resigning an office removes nothing automatically. Make it part of the leaver process and confirm it annually.
A power granted years ago for one transaction remains effective against a third party without notice of revocation. An annual review of what has been granted and what revoked closes a genuine exposure.
Reflects UAE law and practice current as of {{DATE OF USE}}. The Commercial Companies Law was amended by Federal Decree-Law 20 of 2025, and duties, notarisation requirements, penalties, insolvency provisions and free zone and financial free zone rules all change — take UAE legal advice on manager and director exposure, and immediately where solvency is in doubt.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, corporate secretary, or accountant as relevant) before you rely on it.