Directors face expanded duties under UAE Emergency Financial Crisis declaration
The UAE Cabinet has recently declared an 'Emergency Financial Crisis' under the UAE Bankruptcy Law, starting on 28 February 2026 with no end date yet.
The analysis — automated & source-checked
- Applies to
- Corporate · UAE
- What to do
- Directors must review and understand their expanded duties under the Emergency Financial Crisis declaration, implement enhanced governance measures, and ensure compliance with duties to act in good faith, prevent insolvency, preserve assets, maintain records, disclose financial conditions, and avoid self-dealing transactions.
The UAE Cabinet has declared an 'Emergency Financial Crisis' under the UAE Bankruptcy Law, effective 28 February 2026. During this period, company directors face heightened scrutiny and expanded responsibilities under specific provisions of the Bankruptcy Law.
Key duties for directors include: acting in good faith with transparent decision-making; taking immediate action to prevent insolvency through cost-cutting, funding, or strategic alternatives; preserving company assets to maximize stakeholder value; maintaining enhanced records to demonstrate prudent management; promptly disclosing financial conditions to creditors and stakeholders; and avoiding transactions that primarily benefit directors at the company's or creditors' expense.
Failure to comply can result in personal liability for directors, including liability for company debts or legal action by creditors. Directors should seek professional legal and financial advice to ensure compliance and consider implementing enhanced governance measures.
Source
Reported by: Dentons UAE 4 Aug 2026 Read the original ↗ More from Dentons UAE →
Quick answers
What do I need to do?
Directors must review and understand their expanded duties under the Emergency Financial Crisis declaration, implement enhanced governance measures, and ensure compliance with duties to act in good faith, prevent insolvency, preserve assets, maintain records, disclose financial conditions, and avoid self-dealing transactions.
Who reported this?
Dentons UAE (UAE).
When was it announced?
4 Aug 2026.
Where can I read the original?
Read the original at Dentons UAE: https://www.dentons.com/en/insights/alerts/2026/august/4/directors-duties-in-light-of-the-declaration
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