Individual companies loans appear in the credit report of their owners

The General Manager of Al -Ittihad Credit Information Company, Marwan Lutfi, stated that the emergence of companies’ funds in the personal credit reports of their owners depend on the legal form of the company, if it is an individual institution showing the obligations in the credit report of the individual, because “exposure” is on the same person, that is, he is responsible for the obligations of his company towards banks or any other parties, and he explained to “Emirates Today” that individual institutions have no partners, in which there are partners We recommend referring to the corporate law to know the difference between companies.

Lotfi’s comments came in comment on complaints received by «Emirates Today» from citizens who have licenses for small companies, but investing in them and run by someone other than a citizen, and that they suffer the appearance of the debts of these companies in their own credit reports, despite their lack of knowledge or knowledge of anything about these debts, or why they were obtained.

They emphasized that they are licenses, but they rent them to investors who manage and dispose of companies under official agencies, and in return, the citizen gets an agreed annual amount for that.

On the law, the legal director of the office of “Amira Saqr for Lawyer and Legal Consulting”, Dr. Al -Sabah Al -Ashry, said that “the individual institution and its owner are one financial liability, meaning that it is permissible for the creditor, whether bank or others, to be implemented on the company or the owner in its own money.”

He indicated that the individual institution is in the name of the citizen, and whoever invests in it is the manager, and he usually has a power of attorney from the owner, and it is necessary for creditors to return to the company and its owner of the citizen and implement it.

Al -Ashry explained that there is a system that is applied in one of the emirates of the state, known as a “service agent”, and it differs from the owner of the institution whose name is present in the license, in the regular situation, and in this case the citizen is a service agent who is not responsible for the company’s obligations.

He stressed that banks are entitled to refer to the citizen, the owner of the individual institution, in his own financial custody, and this is what should be aware of it in order to avoid the problems after the establishment of companies.

He noted that the citizen, the owner of the license, should ask about all the details related to his responsibility before choosing the legal form of his company.

It is noteworthy that, according to the law of commercial companies updated in 2021, the individual company is owned by only one person, and it bears full responsibility for debts and obligations unlimited responsibility, and the most important characteristic of them is easy to establish, while private companies are owned by two or more people, and the responsibility in it is as much as the invested capital, and the owners do not bear the company’s debts in their own money except in exceptional cases.