Issuance Articles
Article 1 - Introduction The Commercial Companies Law attached hereto shall hereby come into effect. Article 2 - Introduction
Article 1 - Introduction
General Provisions
Article 1 (Amended By Law 28/2008) In the application of the provisions of the present law, unless the context requires otherwise, the words and expressions set forth below shall bear themeaning assigned to each of them: “Ministry” means the Ministry of Business and Commerce;“Minister” means the Minister of Business and Commerce;“Competent Department” means the relevant Department at the Ministry.“Memorandum of the Company” means the Memorandum of Association of the company.“Public Claim” means the criminal claim. Article 2 (Amended By Law 16/2006)
Article 1 (Amended By Law 28/2008)
In the application of the provisions of the present law, unless the context requires otherwise, the words and expressions set forth below shall bear themeaning assigned to each of them: “Ministry” means the Ministry of Business and Commerce;“Minister” means the Minister of Business and Commerce;“Competent Department” means the relevant Department at the Ministry.“Memorandum of the Company” means the Memorandum of Association of the company.“Public Claim” means the criminal claim.
A commercial company is a contract in terms whereof two or more natural or juristic persons agree to participate in a project for the purpose of making a profit, by contributing in money or in kind to share the profits and losses of such project in agreed proportions.The company may be constituted by one person in accordance with the provisions of Part Seven (as herein repeated) of this Law.
Every company incorporated in Qatar shall hold the Qatari nationality. Such company shall have its principal office in Qatar and shall not automaticallybe entitled to privileges legally reserved for Qatari nationals.
Every company incorporated in the State of Qatar shall take one of the following forms: General partnership Limited partnership Joint venture company/Particular Partnership Joint stock company/shareholding company Equities Partnership Limited liability company Sole proprietorship Holding company
Any company that does not take on the forms referred to in the preceding Article shall be deemed null and void, and any person who enters into a contract on behalf of such company shall be severallyand jointly liable for the obligations arising therefrom.
Save as for a joint venture company, the Memorandum of Association and any amendment thereto shall be drawn up in Arabic and shall be attested by the Notary Public, otherwise the said Memorandum or its amendment shall be null and void.
Partners may invoke nullity arising from failure to provide dully written or formalized Memorandum against each other, but no protest thereby may be admitted against third parties who may protest against the partners on the basis of such nullity.
Save as for a joint venture company, no company shall enjoy corporate personality unless registered in accordance with the provisions of this Law. The managers or Board members of such company shall be, mutatis mutandis jointly liable for all the damages suffered by third parties due to the non-registration of such company.
The share of a partner in a company may consist of a specified amount of fund (cash share) or may be made in kind (material assets) to serve the objects of the company. Such a share may take the form of work performance, provided that the share of a partner shall not be constituted by the reputation or the influence of such partner. The company's capital shall exclusively comprise cash and corporeal shares.
Where the share of a partner comprises a title or any other corporeal right, such partner shall, in accordance with the applied regulations in respect of sale agreement, be liable to the guarantee of such a share in case of amortisation or maturity or in the event of an evident flow or shortage therein. In the event of a share being based merely on utilization of property the applicable regulations in respect of rent agreements shall apply to matters referred to in the preceding paragraph.Unless otherwise agreed, where a partner's share involved entitlements with third parties, such partner's liability towards the company shall be absolved only upon the settlement of these entitlements.Unless otherwise agreed, where a partner's share is composed of efforts, then the profits arising from such efforts shall be the company's right unless such profits are achieved by virtue of a patent certificated.A partner whose share is performance of work shall not perform the same work for his own account.
Each partner shall be indebted to the company for the share pledged by himself andunless settled on due dates, default partners shall indemnify the company against damages caused by such delay.
No personal creditor may acquire his entitlements from the debtor's share in the company capital. However, such creditor may receive his entitlements from the dividends accrued to his debtor in accordance to the balance sheet of the company. If the company is dissolved, the creditor's entitlements shall be transferred to the share of his debtor in the surplus balance of the company's property after payment of the company debts. Where the partner's share comprises stocks, his personal creditor may, in addition to the entitlements referred to in the preceding paragraph, request the sale of these stocks to satisfy his entitlements from the sale proceeds.
The Memorandum of Associationmay not include any provision that deprives a partner of the profit or relieveshim from the loss; otherwise, such contract shall be deemed null and void. However, it may be stipulated that partners contributing only with efforts, shall be exempted from the loss.
Where a partner's share in profit or loss is not specified in the Memorandum ofAssociation, his share thereof shall be prorate to his share capital. Where a Memorandum determines the partner's share in profits only, his share in loss shall be equal to his share in profits. The same ruling shall also apply if only the partner's share in loss was determined in the Memorandum. Where a partner's share is limited to his efforts, and the Memorandum of Association have not fixed his share in the profit or loss, the company shall assess his work and such assessment shall be the basis for determining his share in the profit or loss in accordance to the aforementioned provisions. Where more than one partner contributes by their effort without assessment of their shares, such shares shall be deemed of equal value, unless proven otherwise. Where, in addition to his efforts, a partner' contribution is made in cash or in corporeal shares, he shall be entitled to a share in the profit or in the loss in consideration of his efforts, and to another share against his cash or corporeal share.
Fictitious profits may not be distributed to the partners, otherwise the company's creditors may claim from every partner to reimburse the amounts he so received even in good faith. The partner may not be obliged to reimburse the real profits that he has received, notwithstanding that the company might incur a loss in subsequent years.
All the contracts, correspondences, discharges and notices and other documents issued by the company shall bear its name and a statement of kind, head office and its serial registration number in the Commercial Register.In addition to these particulars, save as for general partnerships and limited partnerships, the company's capital and the paid-up amount thereof shall be indicated. Where a company is in liquidation, such fact shall be stated in the papers issued thereby.
Notwithstanding the provisions pertaining to the incorporation of companies, the provisions of the present Law shall apply to foreign companies that operate their activities in the State.
Without prejudice to the special provisions of each company, the provisions of this Part shall apply to all companies stipulated herein.
General Partnership
Article 19 A general partnership is a company which comprises two or more natural persons, who shall be jointly liable for the company obligations to the full extent of all their property. Article 20
Article 19
A general partnership is a company which comprises two or more natural persons, who shall be jointly liable for the company obligations to the full extent of all their property.
The title of the general partnership shall be composed of the names of all partners. However, the company's title may be restricted to one or more partners followed by the term “and partners” wherever it appears. The name of the company shall be complying with the reality. Where a name of an individual, who is not a partner therein, is knowingly embodied in the name of the company, such person shall be jointly liable for the company's obligations. However, the company may maintain in its name a name of a partner who withdrew from the partnership or died, if the withdrawn person or the heirs of the deceased partner so agree. The company may have a special trade title provided that it is associated with an indication that it is a general partnership.
All partners in a general partnership must be natural persons
The Memorandum of Association of a general partnership must be drawn up in writing and signed. In particular the Memorandum shall comprise the following: Name, purposes, headquarters and branches (if any) of the company. Name, family name and surname (if any) of every partner and his nationality, date of birth and place of residence. Company capital and shares contributed by each partner, whether paid in cash or in kind, or rights with third parties, the estimated value of such shares, their submission method and due dates. Date of incorporation and term. Management of the company and name of the persons who are authorized to sign on behalf of the company and their respective authorities. Commencement and end of the fiscal year of the company. Rate of distribution of profits and losses.
Partners may adopt written Articles of Association for the company that include the detailed provisions agreed upon for the management of the company. A copy of this Articles of Association shall be attached to the Memorandum of Association.
The Memorandum of Association of the company and all the amendments made thereto shall be entered and published in the Commercial Registry according to rules pertaining to this Registry. A summary of the Articles of Association and all the amendments made thereto shall also be published in a local daily Arabic newspaper at the company's expense.Unless the registration and announcement procedures are complete, the existence of the company shall not be asserted in defences against third parties in good faith. The failure in the fulfilment of the registration and announcement procedures shall lead to the rejection of any claims asserted by the company against others. Nevertheless, third parties in good faith may assert the existence of the Company in claims placed against partners thereof even though such registration and announcement procedures are not complete.
A partner in a general partnership shall have the status of merchant. He shall be deemed as conducting commercial business under the name of the company. The bankruptcy of the company shall lead to the bankruptcy of all partners.
The share of the partners in the general partnership may not be in the form of negotiable instruments.
in a partnership company, assignment of shares shall not be permitted except with the consent of all partners or in accordance with the terms stipulated in the company's Memorandum of Association. In this case, the Memorandum shall be amended and the assignment shall be published in accordance with Article 24 herein. Any agreement whereby non-conditional assignment of the shares is allowed shall be null and void. Nevertheless, the partner shall be entitled to assign to a third party the rights related to his share in the company. Such agreement shall have no impact upon any other one except the parties thereto.
The creditors of the company shall have the right of recourse against the company and any partner's personal property. All partners of the Company shall be jointly liable to creditors of theCompany. Eexecution against assets of a partner for the liabilities of the company shall not be permitted except where a final judgment against the company has been obtained, notice has been served and settlement has not been made on time.The execution judgment issued against the company shall be evidence against the partner.Where any partner settles any liability against the company, he is entitled to recourse against the company. He is also entitled to recourse against the other partners each according to his share in the debt. Where any of the partners is insolvent, the responsibility of the insolvency shall be borne by the partners who settled the debt, each according to the amount of his share.
Except with the partners' approval, it shall not be permitted for a partner, to conduct on his own account or on the account of any third party, any activity of the kind the company is practising, or to be a partner in a competing company if this company is a joint company or a limited partnership or a company having limited liability.Where any of the partners violates this rule, the company shall be entitled to claim compensation from him and consider all the operations performed for his own account as having been done for the account of the company.
Where a partner joins the company, such partner shall become responsible collectively with the other partners in all his property for the liabilities existing before and after joining the company. Any agreement between the partners to the contrary shall not be asserted against third parties.
A partner who retires from partnership shall be held harmless of such partnership liabilities as might arise after his retirement is proclaimed.
A partner who assigns his share in the company, shall not be released of the liabilities of the company towards it creditors unless the creditors approve such assignment.
A partner who is not a manager may not interfere in the management affairs of the company. However, such partner may have access to the core operations of the company, inspect its ledgers and documents and may obtain by himself or through his agent a summary of the financial status of the company and may provide advice to the manager of the company. Any agreement to the contrary shall be null and void
Decisions of general partnership shall be made by the unanimous consensus of the partners, unless otherwise stipulated in the Memorandum of Association. Nevertheless, resolutions pertaining to the amendment of the Memorandum of Association shall not be valid unless made by the unanimous agreement of the partners.
The management of a general partnership shall be carried out by all the partners unless such management, by virtue of the Memorandum of Association or a separate contract, is assigned to one or more partners or to one or more persons other than the partners.
Where the company is directed by more than one manager, and each of them is assigned a specific function, each manager shall be responsible only for the functions within his competence. In the case of numerous managers who are collectively responsible for the management of the company, their decisions shall only be valid if reached by unanimity or by the majority of votes as stipulated in the Memorandum of Association. However, each manager may individually carry out urgent matters if omission thereof may cause substantial damage to the company or loss of sizeable profit thereto.In the case of numerous managers and where no specific function was assigned to each manager and where it is not stipulated that they should work collectively, any of them may carry out any of the management operations, provided that other managers have the right of veto against any such operation before it is completed. In this case, the matter shall be decided according to the majority of votes. In the event of a tie, the matter shall be referred to the partners.
Where the manager is a partner and appointed in the Memorandum of Association, he may not be removed except by the partners' unanimous vote or by virtue of a decision issued by the court upon the request of the majority of partners. Unless otherwise stipulated in the Memorandum of Association, such expulsion in the event of partnership or appointment of the manager as mentioned above shall necessarily entail the dissolution of the company.Where the manager is a partner appointed by a contract independent of the Memorandum of Association, or is not a partner, whether appointed in the Memorandum of Association or in an independent contract, such manager may be expelled by a majority of the partners' votes. This expulsion shall not cause the dissolution of the company.
Where the manager is a partner and appointed in the Memorandum of Association, he may not decline management except for acceptable reasons, otherwise he shall be liable for the damages. Save as otherwise stipulated in the Memorandum of Association, the retirement of such partner shall result in the dissolution of the company. Where the manager is a partner and appointed by a contract independent of the Memorandum of Association, or where the manager is not a partner, whether appointed by virtue of the Memorandum of Association or by an independent contract, such manager may resign from management, provided that he selects an appropriate time to resign his post by notice served to the partners before a reasonable time, otherwise he shall be liable for damages. Such resignation shall not lead to the dissolution of the company.
Unless limited by the Memorandum of Association, the manager may conduct all normal management operations that comply with the objectives of the company. the manager may compound on the rights of the company or seek arbitration if the compounding and arbitration achieve the interest of the company.The company shall be bound by any work carried out by the manager in the name of the company within his authority, even if the manager uses the signature of the company for his own account, unless the one with whom he contracted has acted in bad faith.
Save as otherwise agreed by the partners or explicitly expressed in the Memorandum of Association, the manager may not exceed his normal dispositions. In particular such restriction shall apply to the following acts: Donations, except for the ordinary small contributions. Sale of real estates of the company, unless disposal of such real estate is part of the objectives of the company. Mortgage of the real estates of the company, even if the manager is authorized to sell such real estate under the Memorandum of Association. Sale or mortgage of the company premises. Guarantee of third parties debts.
The manager may not conclude contracts for his own account with the company except with the consent of all partners, to be issued for each case separately.The manager may not be permitted to practise any of the activities similar to those of the company, except with the approval of the partners.
A manager shall be held accountable for damages sustained by the company, the partners or third parties as a result of his violation of the provisions of the Memorandum of Association or for the mistakes committed by him in the performance of his duties. Any provision to the contrary shall be null and void.
The profits, losses and shares of each partner shall be determined at the end of the fiscal year of the company as per the balance sheet and profit and loss account.Each partner shall be deemed a creditor of the company with his share in the profits upon the determination of such share with the approval/endorsement of balance sheet.Unless otherwise agreed upon, any shortfall in the capital of the company due to loss shall be made up from dividends of the following years. Notwithstanding the above, a partner may only make up the shortfall of his share in the capital due to losses by his own consent.
Limited Partnership
Article 44 The limited partnership is a company comprising two categories of partners: Partners in the general partnership who manage the company and who are responsible jointly for its liabilities in their private assets. Silent partners who contribute to the capital of the company without being responsible for the liabilities of the company except to the extent of the capital they invest in the company or they undertake to pay on behalf of the company. Article 45 (Amended By Law 16/2006)
Article 44
The limited partnership is a company comprising two categories of partners: Partners in the general partnership who manage the company and who are responsible jointly for its liabilities in their private assets. Silent partners who contribute to the capital of the company without being responsible for the liabilities of the company except to the extent of the capital they invest in the company or they undertake to pay on behalf of the company.
All the joint partners shall be natural persons.
The Memorandum of Association of the company shall include the names of joint partners and silent partners.
The name of a limited partnership shall only be composed of the names of the joint partners in addition to an indication showing the existence of other partners. It may have a special commercial name provided that the name is followed by words showing that it is a limited partnership.The name of the silent partner may not be stated in the name of the company. Where the name of a silent partner become, with his knowledge included, such silent partner shall be jointly responsible for the liabilities of the company as against bona fide third parties.
The silent partner may not interfere in the management of the company even under a power of attorney; otherwise such partner shall be jointly responsible for the liabilities arising out of his management. The silent partner may undertake the liabilities of the company fully or partially as per the volume or repeat work of the business and in accordance with the trust bestowed by others on him due to such work.However, it shall not be deemed as interference; monitoring the actions of managers of the company, provide advice thereto and permit them to act outside their mandate.
The silent partner may request to be furnished with a copy of the balance sheet, the profit and loss statements and verify the accuracy of their contents. To realise this, the silent partner may, by himself or through a representative or others review the ledgers and documents of the company, provided the company is held harmless as a result of such acts.
Unless otherwise stipulated in the Memorandum of Association, decisions of the limited partnership shall be issued by the unanimous votes of joint partners. The decisions pertaining to the amendment of the Memorandum of Association shall be valid only if endorsed unanimously by the joint and silent partners.
Notwithstanding the provisions stipulated in this Part, the limited partnership company shall be subject to the same rules as those applicable to the general partnership
Joint Venture
Article 52 The joint venture company comprises two or more persons.The joint venture company is a silent company which does not affect the rights of others or enjoy juristic identity. The joint venture shall not be subject to any registration procedures. The existence of such joint venture company may be substantiated by all means of substantiation including evidence and presumptions. Article 53
Article 52
The joint venture company comprises two or more persons.The joint venture company is a silent company which does not affect the rights of others or enjoy juristic identity. The joint venture shall not be subject to any registration procedures. The existence of such joint venture company may be substantiated by all means of substantiation including evidence and presumptions.
The Memorandum of Association of the joint venture company shall define its objectives, the rights and liabilities of the partners, the distribution of profits and losses between partners, the modus operandi of company management and other basic elements.
he joint venture company shall not be permitted to issue bonds or negotiable instruments.
Unless the Memorandum of Association stipulate otherwise, each partner in a joint venture company shall be the owner of the share taken by him.Where the share becomes a particular material asset and the bankruptcy of the partner who possesses it is declared, then its owner shall have the right to recover the same from the bankruptcy after having paid his share of the company's losses.Furthermore, if the share is in cash or undivided kind, the owner of such share shall only be entitled to participate in the bankruptcy in his capacity as a creditor of the share value after deduction of his share in the company's losses.
Third Parties may recourse only against the partner or partners with whom they concluded a transaction.However, if the partners conduct any business that reveals the existence of the company to third parties, then the third parties shall consider the joint venture company as a real company, and the partners shall be jointly liable towards them.
The partner in a joint venture company shall not be considered a merchant, unless he carries out commercial transactions by himself.
Each partner may demand access to the ledgers and documents of the company either by himself or through an agent, provided that the company is held harmless. Any agreement to the contrary shall be null and void.
Unless otherwise stipulated in the Memorandum of Association, decisions in the joint venture company shall be adopted by the unanimous votes of partners. Decisions pertaining to the amendment of the Memorandum of Association shall be valid only if endorsed unanimously by the partners.
Where there is a non-Qatari partner among the partners, the joint venture company shall not be permitted to conduct business that is prohibited by law for non-Qatari nationals.
Joint Stock Company
Chapter One
Article 61 The Joint Stock Company (JSC) is a company whose capital is divided into negotiable shares of equal value and a shareholder therein shall be liable only to the extent of his share in the capital. Article 62
Article 61
The Joint Stock Company (JSC) is a company whose capital is divided into negotiable shares of equal value and a shareholder therein shall be liable only to the extent of his share in the capital.
The JSC shall derive its name from its objectives. It cannot be a name of a natural person unless the company objective is intended for the investment of a patent registered under the name of this person or it has acquired a commercial entity and took that name as its own.In all cases, the term “Qatari joint stock company” shall be appended to the name of the company.
The Joint Stock Company shall have a definite term that must be specified in the Memorandum and Articles of Association of the company. Where the objectives of the company require the performance of a specific task, the company shall expire upon the realization or extinction of its object. The specified term may be extended by a decision of the extraordinary meeting of the general assembly.
The capital of the company must be adequate to achieve the objectives for which it was incorporated. In all cases, the capital of the JSC, which issue its shares for public subscription shall not be less than ten million (10,000,000) Qatari Riyals.
The JSC Memorandum and Articles of Association must comply with the two forms issued under a Ministerial Resolution. Breach of these two forms may not be permitted unless there are strong reasons approved by the Minister.
Chapter Two
Incorporation of the Company
Article 66 A JSC shall be incorporated by a ministerial decision. The number of founders or shareholders may not be less than five persons. Article 67 Cancelled (Repealed By Law 16/2006)
Article 66
A JSC shall be incorporated by a ministerial decision. The number of founders or shareholders may not be less than five persons.
1. The government, other public authorities and corporations, and companies in which the State holds a minimum 51 percent of shares or less, may, upon approval of the Council of Ministers,incorporate one or more joint stock companies either by itself or jointly with one or more founders, whether a Qatari national or a foreigner, or a natural, juristic or private person.” Such companies are subject to the provisions of this Law, except to the extent that they are not in conflict with the agreements or situations concluded thereunder, or upon incorporation and the provisions stipulated in its Memorandum and Articles of Association.
The Memorandum and Articles of Association shall be set up by the founders in accordance
The founders shall form a committee of not less than three and not more than five members to undertake the procedures of incorporation with the concerned authority.
The application for the incorporation of the company shall be submitted to the Ministry attached with a draft copy of the Memorandum and Articles of Association of the company. The Ministry may request any additional information it deems necessary, and the supporting documents and papers. The Ministry may also request to review the feasibility study of the project. The Ministry may request amendments to the draft Memorandum and Articles of Association so as to be consistent with the provisions of this Law and the two aforementioned forms in Article 65.
Where the Ministry approves the application for the incorporation of the company, the founders shall sign the Memorandum and Articles of Association in accordance with the proposals approved by the Ministry. The Memorandum and Articles of Association shall be authenticated at the Notary Public and submitted to the Ministry. Accordingly, the Minister shall issue a decision concerning the company's incorporation in a period not exceeding sixty days from the date of submission of the Memorandum and Articles of Association.
Where the application for incorporation is rejected, or the period stated in the previous Article expires without response, the founders may appeal to the Council of Ministers within thirty days, from the date of the rejection notification or the expiry of the period, as the case may be. The decision issued by the Council of Ministers in this respect shall be final.Where sixty days lapse without the Council of Ministers issues a decision, the appeal shall be deemed rejected.
Where the application for the company incorporation is rejected by a final decision, the founders shall not have the right to submit a new application for the incorporation of the same company before the lapse of at least six months from the date of the final rejection decision.
The decision of the incorporation of the company shall be published in the Official Gazette appended with the Memorandum and Articles of Association. The company may only acquire a corporate identity after its declaration which shall be by registration in the Commercial Register and publication in the Official Gazette.
Founders shall subscribe neither less than 20% nor more than 60% of the company's capital. No founder shall subscribe to a higher percentage than what is specified in the Articles of Association. The founders shall, before the publication of the subscription prospectus, deposit the amount equal to the percentage required to be paid up by the public for each share upon subscription.Before inviting the public for subscription, the founders shall furnish the Ministry with a bank certificate proving that they have subscribed to the company shares with the limits specified by this Article and that they have deposited in the company account the amount equivalent to the percentage due to be paid by the public for each share at the subscription.Deposit of this amount shall be stated in the subscription prospectus. The bank certificate shall be enclosed with the draft subscription invitation prepared by the founders in accordance with the provisions of the following article. Having satisfied the foregoing, the Minister shall authorize the publication of the invitation prospectus in two local daily newspapers.
The invitation for public subscription shall be announced in two local Arabic-language daily newspapers, at least one week before the commencement of subscription. The subscription prospectus shall include the following details: Names and nationalities of founders. Name, objects and head office of the company. Amount of capital; paid capital; type of shares; value and number thereof; percentage of what was offered for public subscription, shares subscribed by the founders and the restrictions imposed on transfer of shares. Shares in kind and particulars thereof as well as entitlements (if any). Privileges granted to the founders and others (if any). Method of dividends distribution. Estimated statement of the expenses of the company incorporation. Fulfilment of the founders to the payment of the shares values subscribed by them. Minimum limit of shares to which a person can subscribe and also the maximum limit without exceeding the percentage prescribed for the founder. Date, deadline, domicile and terms of subscription. Date of licence authorizing the incorporation of the company. Statement of assignment of shares to subscribers when subscription exceeds the number of shares available for sale. Any other matters which affect the rights or obligations of the shareholders. The founders or their representatives shall sign the subscription prospectus and shall be jointly liable for the authenticity of the contents thereof as well as fulfilment of the aforesaid requirements.A statement signed by the auditor and indicating that the prospectus has been revised and attested by the auditor shall be enclosed with the prospectus.
Subscription shall be undertaken at one or more banks licensed to operate in the State. Payment of instalments due upon subscription shall be made at the bank. The payment shall be credited to a special account opened in the name of the company.
Subscription shall be made by a declaration signed by the shareholder stating the number of shares subscribed for, the shareholder's approval of theCompany's the Memorandum and Articles of Association, his address in the State of Qatar and any other information that may be deemed necessary. Subscription shall be duly made and unconditional. Any condition made by the subscriber in the subscription application shall be deemed null and void.The subscriber shall submit the subscription application to the bank and pay the due amount upon obtaining a receipt signed by the bank stating the name and address of the subscriber; date of subscription, and number of shares subscribed to and paid-up instalments. The subscription shall be final when the subscriber receives such receipt.
Each subscriber shall be furnished with a hard copy of the Memorandum of Association to be mentioned in the subscription receipt received from the bank. During the subscription period, stakeholders may obtain the company's Articles of Association in hard copy without or with a reasonable consideration as specified by the subscription prospectus.
The bank shall keep all the funds paid up by the shareholders in the account of the company under incorporation. Such funds may only be submitted to the Board of Directors after declaration of the company's incorporation and its registration in the Commercial Register.
The subscription shall remain open for a minimum period of two weeks and a maximum period of four weeks.Where the shares have not been fully subscribed for during the subscription period, the founders may, after obtaining the approval of the Ministry, extend the subscription period for a maximum period of two weeks. Where, during the extension period, the shares have not been fully subscribed for, the founders must either relinquish the incorporation of the company or reduce the capital thereof to the extent for which the subscription was achieved, without prejudice to the provisions of Article 64 herein.
Where the company is not incorporated, the founders shall be jointly liable for refunding the subscribers the paid-up value of shares during a maximum period of one week from the date specified for closing the subscription pursuant to the provisions of the foregoing Article. The founders shall also be jointly liable for reimbursement of such funds and expenses incurred during the incorporation of the company. The founders shall be jointly liable before third parties for operations and transactions thereby during the incorporation period
Where the capital is reduced, the subscribers may opt to withdraw their subscription within a period not less than the period of the initial subscription, otherwise their subscription shall be deemed final.
In case of oversubscription, the shares shall be distributed, to subscribers pro rata to the percentage of their subscriptions.In all cases, the surplus subscription funds shall be refunded to subscribers by the bank within a maximum period of two weeks from the closing date of the subscription
Any concerned party may request an invalidity of a subscription that is contrary to the aforesaid provisions within thirty days from the date of closure of the subscription.
The founders shall inform the Ministry within thirty days from the date of closure of the subscription of the subscription results; value of shares paid by the subscribers, their names and number of shares subscribed to by each subscriber.
The founders shall, within the period specified in the foregoing Article, invite subscribers to a constituent general assembly meeting. A copy of the invitation shall be sent to the Ministry.Such constituent general meeting shall only be valid where the quorum present holds at least half of the shares issued capital. The Meeting shall be chaired by one of the founders to be elected by the general assembly.
Irrespective of shares held, any subscriber shall have the right to attend the general assembly meeting.
The founders shall submit to the constituent general assembly a report including sufficient information as to the incorporation process along with the supporting documents. In particular, the constituent general assembly shall discuss the following: Report of the founders regarding the processes of the company incorporation and the expenses it entailed. Adoption of the Articles of Association. Election of the first Board of Directors and appointment of auditors as well as determination of their remunerations. Approval of the evaluation of shares in kind (if any). Final announcement of the incorporation of the company. The decisions of the constituent general meeting shall be adopted by absolute majority of the shares duly represented therein according to the provisions of this Law.
The first Board of Directors shall take the measures to announce the company in accordance with this Law. Members of the first Board of Directors shall be jointly liable for all damages incurred due to failure to take the aforementioned measures of announcement. Results of all acts carried out by the founders on behalf of the company prior to its announcement shall be transferred to the company upon its announcement and all expenses incurred by the founders to this effect shall be borne by the company
Where any fault has occurred in the procedures of incorporating a JSC, any concerned party may, within five years from its incorporation, warn the company in writing to rectify such fault, within a month from the date of notification.Failing regularization within the time limit, the concerned party may seek a ruling to nullify the company and it shall be dissolved as a de facto company. However, the shareholders may not rely on the nullity of the company as a defence against third parties acting in good faith.
Where any fault has occurred in the procedures of incorporating a company, the shareholders and the stakeholders may, within a period allowed for submission of a nullity claim pursuant to the previous Article, submit a claim of joint liability against the founders, first members of the Board of Directors and the first auditors
Chapter Three
Management of Joint Stock Company
Section 1
Board of Directors
Article 94 The management of a JSC shall be undertaken by an elected Board of Directors, the number of whose members and term of office shall be provided for by the Company's Articles of Associations. The members of the Board of Directors shall not be less than five and not more than eleven and their term of office shall not exceed three years.A member of the Board of Directors may be re-elected more than once unless otherwise stipulated in the Articles of Association. A member of the Board of Directors may withdraw from the Board provided that such withdrawal is made at an appropriate time, otherwise he shall be held accountable to the company. Article 95
Article 94
The management of a JSC shall be undertaken by an elected Board of Directors, the number of whose members and term of office shall be provided for by the Company's Articles of Associations. The members of the Board of Directors shall not be less than five and not more than eleven and their term of office shall not exceed three years.A member of the Board of Directors may be re-elected more than once unless otherwise stipulated in the Articles of Association. A member of the Board of Directors may withdraw from the Board provided that such withdrawal is made at an appropriate time, otherwise he shall be held accountable to the company.
The general assembly shall elect the members of the Board of Directors by secret ballot, otherwise, the founders may appoint inter se the first Board of Directors for a maximum period of five years.
The member of the Board shall fulfill the following conditions: He must be less than twenty-one years old. He must not have been convicted in any offence or a crime relating to honour and honesty or of one of the crimes provided for in Articles 324 and 325 of this Law unless he is rehabilitated. He must be holder of a number of shares determined by the Articles of Association and specified as a security for the rights of the company, shareholders, creditors, and third parties. Such shares shall be deposited within sixty days from the date of commencement of membership, at one of the approved banks. The deposited shares shall not be subject to transfer, lien or attachment until the balance sheet of the last financial year in which he was holding office is approved. Failing to provide the aforesaid security nullifies the membership of the Board member
With the exception of government representatives in joint stock companies and persons who hold at least 10% of the capital therein, no person, either in his personal capacity or as a representative of one of the corporate persons, shall be permitted to become a member of the Board of Directors of more than three joint stock companies whose headquarters are located in the State nor shall such person be the Chairperson or a vice-Chairperson in more than two companies whose headquarters are located in the State. In all cases, no person, either in his personal capacity or as a representative of one of the corporate persons, shall neither be a managing director of more than one company whose headquarters is located in the State, nor be a member in the Board of Directors of two companies having similar activities. Failing the above nullifies the membership in the Board of Directors exceeding the quorum prescribed herein according to the date of membership. A manager whose office is invalidated shall reimburse all amounts received thereby from the company or companies.
Where the State or public authority or corporation becomes a shareholder in a joint stock company, the State or public authority or corporation shall, instead of participating in electing the Board of Directors, delegate representative(s) to participate in the Board pro rata to the shares held. The number of such representatives shall be deducted from the total number of Board's members. The State or public authority or corporation shall have the exclusive right to dismiss such representatives and replace them at any time. The representatives of the State or public authority or corporation appointed in the Board of Directors shall have the same rights and liabilities accorded to elected members. The State or public authority or corporation appointed shall be liable for the actions of its representatives towards the company; creditors and shareholders' therein. The representatives of the State or public authority or corporation in the JSC Board of Directors shall be exempted from submitting the security shares for their memberships.
The BoD, through secret ballot, shall elect a Chairperson and a vice-Chairperson for one year unless the Articles of Association determines otherwise. The term of the Chairperson and vice-Chairperson shall not exceed three years.The BoD may elect, through secret ballot, one or more managing directors. Such managing directors shall jointly or severally, according to the decision of the Board have the right to sign on behalf of the company.
Where the office of one of the Board members becomes vacant, such office shall be filled by the member who received a majority of votes from the shareholders who have not attained membership of the Board. Where a justifiable reason prevents such manager from taking up the office, he shall be replaced by the next member who received a majority of votes. The new member shall only complete the unexpired term of his predecessor. Where the vacant positions amount to one quarter of the original positions, the Board of Directors shall invite the general assembly to meet within a maximum period of two months from the date on which the last position becomes vacant in order to elect the members for these vacancies.
Each company shall annually provide the Ministry with a detailed list, endorsed by the Chairperson, including the names, capacities and nationalities of the Chairperson and Board members. The company shall inform the Ministry of any change in this list as soon as it occurs.
The Chairperson shall be deemed the head of the company and shall represent the company before courts and third parties. The Chairperson shall implement the Board decisions and abide by its recommendations. The Chairperson may delegate some of his powers to other members of the Board.The vice-Chairperson shall replace the Chairperson during his absence.
The Board of Directors shall convene upon the invitation of its Chairperson pursuant to the provisions of the Articles of Association at the request of at least two members.The meeting shall be valid only if attended by half the members, provided that three members thereof at least are present, unless the company's articles of association provide for a higher number or ratio. The Board of Directors shall meet at least six times during the fiscal year of the company, unless the Articles of Association provide otherwise. The meeting of the Board of Directors shall be held at least every two months.An absent member may delegate in writing another in the Board meetings to act on his behalf in the attendance and voting, provided that one member cannot represent more than one member. The decisions shall be adopted by majority of votes of the present representatives. In the event of a tie, the Chairperson shall have a casting vote. Voting by mail shall not be permitted.A member not in agreement with a decision taken by the Board shall put such objection in the meeting minutes.
Where a Board member is absent from three consecutive meetings of the Board or five inconsecutive meetings without acceptable justification to the Board, he shall be deemed resigned.
Minutes of the Board meetings shall be prepared in a special record to be signed by the Chairperson, the managing director (if any), and the member or the officer who undertakes the secretarial work of the Board. The minutes of meetings shall be regularly recorded in the record after each meeting and in serial order without deletion or erasure. The signatories shall be liable for accuracy of facts recorded in the minutes and its compliance with the law and the Articles of Association of the company.The pages of the register shall be numbered in sequence. Each page of the register shall be stamped by the competent authority and signed by the competent official.The competent official shall confirm at the top of the pages the numbering and stamping of the pages and his signature before use.It shall not be permitted to stamp a new register until after the previous register has been submitted to the competent authority and the competent official has recorded its closure
Subject to the powers of the General Assembly as specified herein or in the company's Articles of Association, the Board of Directors shall have full authority to assume all the powers necessary to achieve the Company's objectives. The Board may, within its mandate, authorise one of its members to carry out one or more specific tasks or supervise one of the company's activities.
Neither the Chairperson nor any other Board member may participate in any business competitive with that of the Company or trade for his own account or the account of third parties in one of the activities practised by the company.The company may otherwise demand indemnity therefrom, or considers businesses carried out for their account as for the company's account.
The Chairperson, any Board member or director may not have any direct or indirect interest in the contracts, projects and transactions concluded for the account of the company. Shall be exempted from such restriction, the public contracting works and tenders where all the competitors are permitted to participate on equal footing. Where one of the persons mentioned in the previous paragraph offers the best tender, the ordinary general meeting, shall approve the same, which shall be annually renewed if such contracts and projects are regular and renewable.In all cases, it shall not be permitted for any of the aforementioned concerned parties to attend any of the ordinary meetings of the general assembly or meetings of the Board of Directors if such meetings are pertaining to a matter related to any one of them.Anyone who breaches the provisions of this Article shall be dismissed from his office in the company.
The company shall not give cash loans whatsoever to any member of its board or guarantee any loan contracted by any of them with third parties. However, as an exception, banks or other financing companies may grant loans to the Board members or open a credit account for them or guarantee a loan contract concluded with third parties in accordance with the same rules and conditions that the company follows towards public customers.Without prejudice to the right of the company to claim compensation from the defaulter in due time, any action being made in contravention of this Article shall be null and void.
The Chairperson, member of the Board of Directors or any staff of the company are prohibited from utilizing the information accessible to them by virtue of their membership or position for the achievement of a benefit for themselves, or for their spouse, children or any of their immediate relatives up to the fourth degree as a result of trading in the securities of the company. No one of such persons shall have any interest, directly or indirectly, with anybody involved in activities intended to affect the prices of the securities issued by the Company.
The JSC shall be bound by all acts performed by the Board of Directors acting within their remit. The company shall also be accountable as to damages caused by unlawful acts by the members of the Board of Directors
The Chairperson and members of the Board shall be jointly liable for compensating the company, shareholders and third parties against damages arising out of acts of fraud or misuse of powers, violation of the provisions of this Law or the Articles of Association, and any maladministration. Any provision to the contrary shall be null and void.
Members of the Board of Directors shall all be liable under the preceding Article, if a default arises from a decision adopted unanimously thereby. However, in the event of decisions reached by majority votes, dissident members shall not be held liable if they entered their objection in writing in the minutes of the meeting. The absence from the meeting in which a decision was adopted shall not be a reason for exemption from liability unless it is proven that the absent member did not know about the decision or that he was unable to object to the same upon his knowledge thereof.
The company, within five years from occurrence of a default or negligence resulting in damages to a group of shareholders, may file a liability claim against the Board members for such default or negligence.The ordinary meeting of the general assembly shall take a decision appointing a person to pursue the case on behalf of the Company.However, if the Company is under liquidation, the decision to file the case shall, by a General Assembly's resolution rest with the liquidator of the Company.
When the aforesaid default causes personal damage to a shareholder, he may independently sue the company, provided that he informs the company of his intention thereto.Any provision in the Articles of Association of the company to the contrary shall be null and void.
Any decision adopted by the general assembly shall in no way discharge the Board of Directors from liability or dismiss a liability claim against Board members because of defaults committed during the execution of their duties. If the act giving rise to liability was forwarded to the general assembly and it was ratified thereby, the liability claim shall be dropped after five years from that meeting of the general assembly. However, if the act attributed to the Board members is a criminal act, the liability claim shall not become invalid until the public claim is invalidated.
The general assembly may, by a resolution adopted by the absolute majority of the Board of Directors or by a request signed by shareholders possessing not less than 25% of the subscribed shares in the capital, dismiss the Chairperson or any elected member of the Board.Consequently, the Chairperson shall call the general assembly for a meeting within ten days from the date of the dismissal notice; otherwise, the competent authority shall make such an invitation.
The company's Articles of Association shall determine the remuneration of the members of the Board of Directors which shall not exceed 10% of the net profit after the deduction of the legal reserves and depreciation, and after the distribution of dividends at not less than 5% of the paid-up capital to the shareholders. It may be stipulated in the company's Articles of Association, upon the approved of the general assembly that the members of the Board receive a certain amount if the company does not make profits. The ministry may determine a higher limit for such amount.
The Board of Directors shall prepare every fiscal year the balance sheet, statement of profits and losses, cash flow statements, and justifications compared to the previous fiscal year, all of which shall be attested by the company's auditors. The Board of Directors shall also prepare a report on the activities of the company; its financial position during the previous fiscal year, and future plans for the coming year. Within a period not exceeding three months from the end of the fiscal year, the Board shall prepare such statements and documents and submit them to the general assembly meeting to be held within a maximum period of four months from the end of the fiscal year of the company.
The Board of Directors shall invite all shareholders to the general assembly meeting by an announcement published in two local Arabic daily newspapers and on the website of Qatar Securities Market.The advertisement shall be published at least fifteen days before the meeting of the general assembly. The announcement shall include sufficient summary of the agenda of the meeting, all statements and documents provided for in the previous Article and the report of the company auditors.A copy of the announcement shall be sent to the competent authority at the same time that it is sent to the newspapers.
Annually, the Board of Directors shall, three days before the meeting of the general assembly to examine the balance sheet and the Board report, present to the shareholders, a detailed statement including the following: All the amounts received by the Chairperson and each member of the Board in the fiscal year including remuneration, fees, salaries, bonuses for attending the meetings, and compensation for the expenses in addition to the amounts received by them in their capacities as technical or administrative employees or for any technical, administrative, or consultative work done for the company. Material benefits enjoyed by the Chairperson and each member in the Board during the fiscal year. The bonuses proposed by the Board to be distributed to the members. Amounts specified to each member of current or previous managers as pension or reserve or compensation for the end of the service. Deals in which the Board members or managers have interests that contradicts with the interests of the company. The final amounts spent for the purposes of advertisement in any form with the details of each amount. Donations with details of the party to whom the donations were made, the reason and particulars thereof. For banks and other financial companies, a report of the auditor shall be attached to certify that all cash loans or credits or guarantees given by any of these institutions to the Chairperson or Board members during the fiscal year have been executed without violating the provisions of Article 109 of this Law.This detailed statement shall be signed by the Chairperson and one member of the Board.The Chairperson and members of the Board shall be liable for the implementation of the provisions of this Article and the verification of data in all the documents
Section 2
General Assembly
Article 122 The general assembly shall be held upon the invitation of the Board of Directors at least once in a year at the place and date fixed by the Board with the approval of the competent authority. The meeting shall be held within four months following the end of the fiscal year of the company.The Board may, whenever it deems appropriate, invite the general assembly to the meeting Article 123 (Amended By Law 28/2008)
Article 122
The general assembly shall be held upon the invitation of the Board of Directors at least once in a year at the place and date fixed by the Board with the approval of the competent authority. The meeting shall be held within four months following the end of the fiscal year of the company.The Board may, whenever it deems appropriate, invite the general assembly to the meeting
The trading of the company shares shall be suspended on the day the meeting of the general assembly is held.
The Board of Directors, based on the auditor request, shall invite the general assembly to convene. If the Board fails to convene the meeting within fifteen days from the date of such request, the auditor may directly call for the meeting after the approval of the Ministry.For serious reasons, based on the request of one or more shareholders who hold at least 10% of the capital, the Board shall call for the general assembly meeting within fifteen days from the date of such request, otherwise the Ministry, based on a request by the shareholders, shall extend the invitation on the expense of the company. The agenda in these two cases shall be limited to the subject matter of the request.
Subject to the provisions of Article 88 and 124 herein, the Ministry shall convene the general assembly of the company for a meeting in the following cases: Where thirty days pass from the date fixed in Article 122 of this Law without extending the invitation to hold the general assembly meeting. Where the number of the members of the Board becomes less than the minimum limit provided for in Article 100 of this Law, without extending the invitation to hold the general assembly meeting. Where it is proved to the Ministry, at any time, that there has been a breach of law or of the Articles of Association of the company or if a serious default occurs in its management. In all these cases, the specified procedures pertaining to convening the meeting of general assembly shall be followed and the company shall bear all costs involved.
The Chairperson shall publish the balance sheet, statements of profits and losses, sufficient summary of the Board report, and the full text of the report of the company auditors in two local Arabic dailies at least fifteen days prior to the date fixed for the general assembly meeting. A copy of such documents shall be submitted to the Ministry.
The agenda of the annual meeting of the general assembly shall contain the following: Consideration and approval of the board's report on the company's activities and financial position during the ended financial year. Discussion and approval of the company balance sheet and profit-and-loss accounts. Election of members of the Board of Directors, if required. Appointment of auditors and determination of their remuneration. Consideration of discharging the Board members. Consideration and approval of proposals by the Board of Directors pertaining to distribution of dividends.
Each shareholder shall have the right to attend the meetings of the general assembly and shall have one vote against each share held by him. The decisions shall be taken with absolute majority of the shares represented in the meeting. Minors and interdicted persons shall be represented by their legal representatives. Proxies may attend meetings on behalf of their principals provided that the principals themselves are shareholders. The proxy agreement shall be exclusive and in writing. The shareholder may not request a member of the Board of Directors to represent him in the general assembly meetings. In all cases, the number of shares held by a proxy, in this capacity, shall not exceed 5% of the capital of the company. Notwithstanding the corporate persons, no shareholder, whether in his original capacity or his capacity as a proxy, shall have a number of votes exceeding 25% of the votes specified for shares represented in the meeting.
Without prejudice to the provisions of this Law pertaining to the extraordinary meeting of the general assembly, the general assembly shall be mandated to examine the following in particular: Discussion of the report of the Board of Directors concerning the activities of the company; financial position during the year and future plans thereof. The report shall include a detailed explanation of revenue and expense items, detailed statement of the method proposed by the Board for distribution of annual net dividends, and a fixed date for disposal of these dividends. Discussion of the auditor's report concerning the company balance sheet and final accounts submitted by the Board of Directors. Discussion and approval of the company balance sheet, profit and loss accounts and dividends to be distributed. Consideration of the discharge of members of the Board of Directors. Election of members of the Board and appointment of auditors and determination of their remuneration for the next fiscal year unless stipulated in the Articles of Association. Examination of any other proposal tabled by the Board in the agenda in order to take a decision thereof. The general assembly may not deliberate on matters not included in the agenda. However, the assembly shall have the right to deliberate on serious matters that may arise during the meeting. Should a number of shareholders who represent at least one tenth of the company capital request an inclusion of specific matters in the agenda, the Board shall respond to such request, otherwise the assembly shall be entitled to decide on the discussion of such matters
The general assembly shall be chaired by the Chairperson of the Board of Directors or his deputy or whoever the Board assigns therefore. In the absence of such persons, the general assembly shall appoint a Chairperson and a secretary for its meeting inter se.Where the Assembly is discussing a matter related to the Chairperson of the meeting, it shall select a Chairperson from among the shareholders.
The general assembly meeting shall be valid if the following are satisfied: The Ministry through a representative attends the meeting, following an invitation at least three days prior to the meeting. It is attended by shareholders representing at least one half of the capital of the company unless the Articles of Association provide for a higher representation. Where the quorum is not present in the first meeting, a second meeting shall be held in compliance with the provisions of Article 120 of this Law. Invitation shall be extended at least three days prior to the meeting. The second meeting shall be valid irrespective of the number of shares represented therein.
Every shareholder shall have the right to discuss matters listed in the agenda and to seek clarifications from members of the Board of Directors. The Board shall respond to the extent that is not detrimental to the company's interests.A shareholder may revert to the general assembly should he feel that the answer to his query is not satisfactory. A decision issued by the general assembly to this effect shall be duly implemented. Any condition provided for in the Articles of Association of the company to the contrary shall be null and void.
The Articles of Association shall determine the mechanism of voting with regard to the general assembly decisions. The voting shall be by secret ballot if a decision is related to the election or dismissal of the Board members, the institution of a liability claim against the Board members, or if it is requested by the Chairperson of the Board or a number of shareholders who represent at least one tenth of the votes attending the meeting.The members of the Board may not participate in voting on the decisions of the general assembly on matters concerning their discharge of liability towards the company.The decisions issued by the general assembly in accordance with the provisions of this Law and the Articles of Association shall be binding on all shareholders whether they are present in or absent from the meeting in which the decisions were taken and whether they are in agreement or disagreement. The Board of Directors shall implement such decisions as soon as they are issued and provide the Ministry with a copy thereof within fifteen days from the date of issue.
The minutes of the general assembly meeting shall indicate the names of attending shareholders either in person or by proxy, the number of shares held in person or represented by those present, the number of votes allocated thereto, decisions made, the number of votes for or against them, and sufficient summary of discussions held during the meeting.The minutes of the meeting shall be signed by the Chairperson, secretary, vote collectors and auditors. Signatories to the minutes shall be liable for the validity of the contents thereof
Minutes of the general assembly shall be recorded in a special register.The records and minutes of the meetings of the general assembly shall be governed by the same provisions as the records and minutes of the Board of Directors pursuant to Article 105 of this Law. A copy of the minutes of meeting of the general assembly shall be sent to the competent authority within a maximum of one month from the date of the meeting.
Without prejudice to the rights of bona fide third parties, any decisions inconsistent with the provisions of this Law or the Articles of Association of the company shall be null and void.Any decision made in favour of or causing damage to a particular group of shareholders or that may bring a special privilege to the Board members while conflicting with the interest of the company shall be abrogated.In the event of abrogation of a decision, such decision shall be deemed as of no effect with regard to all the shareholders. The Board of Directors shall publish this abrogated decision in two local daily newspapers issued in Arabic.The abrogation claim shall not be entertained after the lapse of one year from the issue of the challenged decision. The filing of the claim shall not result in the suspension of the decision unless the court orders otherwise. The abrogation claim shall not be entertained except from the shareholders who opposed the decision and established their objection in the minutes of the meeting or those who were absent in the meeting for any acceptable reasons.
Section
Extraordinary General Assembly Meeting
Article 137 Decisions on the following issues shall not be taken except in an extraordinary general assembly meeting: Amending the Memorandum and the Articles of Association of the company. Increasing and decreasing the company's capital. Extension of the term of the company. Dissolution of the company or its liquidation, transformation or amalgamation with another company. Sale of the venture for which the company was established or disposal of it in any other manner. The Commercial Register shall record any resolution taken to approve any of these matters.However, the general assembly shall not be entitled to make amendments to the Articles of Association of the company that are likely to increase the burdens on shareholders or to amend the main objective of the company or change its nationality or transfer the headquarters of the company incorporated in the State to any other state. Any provisions stipulating otherwise shall be null and void. Article 138
Article 137
Decisions on the following issues shall not be taken except in an extraordinary general assembly meeting: Amending the Memorandum and the Articles of Association of the company. Increasing and decreasing the company's capital. Extension of the term of the company. Dissolution of the company or its liquidation, transformation or amalgamation with another company. Sale of the venture for which the company was established or disposal of it in any other manner. The Commercial Register shall record any resolution taken to approve any of these matters.However, the general assembly shall not be entitled to make amendments to the Articles of Association of the company that are likely to increase the burdens on shareholders or to amend the main objective of the company or change its nationality or transfer the headquarters of the company incorporated in the State to any other state. Any provisions stipulating otherwise shall be null and void.
Subject to the provisions contained herein, the provisions pertaining to the ordinary general meetings shall apply to the extraordinary general meetings.
The extraordinary general meeting shall convene only at the invitation of the Board of Directors. The Board shall extend this invitation if so requested by a number of shareholders representing at least 25% of the company capital. Where the Board fails to hold the meeting of the general assembly within fifteen days of this request, the applicants may request the Ministry to address the invitation on behalf of the company
The extraordinary meeting of the general assembly shall be valid only if attended by the shareholders representing at least three quarters of the company capital.Where a quorum is not present, the meeting shall be held within thirty days following the first meeting. The second meeting shall be valid if attended by the shareholders representing one half of the company capital.Where a quorum is not present in the second meeting, a third meeting shall be called to convene within thirty days following the second one. The third meeting shall be valid irrespective of the number of the shareholders attending. Where the discussion pertains to the dissolution of the company or its transformation or amalgamation, the meeting shall be valid only if attended by the shareholders representing at least three quarters of the company capital.In all the foregoing situations, the decisions shall be adopted by a two thirds majority of the shares represented in the meeting.The Board of Directors shall publish a decision of the extraordinary meeting of the general assembly if it includes the amendment of the Articles of Association of the company
Chapter Four
Auditors
Article 141 The JSC Company shall have one or more auditor who shall be appointed by the general assembly for one-year. The general assembly shall determine the remunerations of the auditor(s). The general assembly may reappoint such auditor(s) provided that the period of appointment shall not exceed five consecutive years. The Board of Directors may not be authorised in this respect. However, the founders may appoint an auditor who shall carry out his duties until the first general assembly is convened. Article 142
Article 141
The JSC Company shall have one or more auditor who shall be appointed by the general assembly for one-year. The general assembly shall determine the remunerations of the auditor(s). The general assembly may reappoint such auditor(s) provided that the period of appointment shall not exceed five consecutive years. The Board of Directors may not be authorised in this respect. However, the founders may appoint an auditor who shall carry out his duties until the first general assembly is convened.
The Auditor shall be enrolled in the professional auditors' register in accordance with the applicable laws and regulations in the State.
An auditor shall not be permitted, in any capacity, to participate in the incorporation of the company or to be a member of its Board or to carry out any technical or administrative or advisory works in the company. An auditor shall also not be permitted to be a partner or a proxy or an employee of any of the company founders or any Board member or to become a relative of the company founders or any Board member up to the fourth degree. Any appointment of an auditor contrary to these provisions shall be null and void
In the event where there is more than one auditor, they shall be jointly liable for activities pertaining to auditing.
Article 145The accounts auditors shall assume the following tasks: Audit the operations of the company. Verify the accounts of the company according to the applicable rules of auditing, requirements of the profession and its scientific and technical principles. Inspect the balance sheet and the profit and loss accounts. Take note of the implementation of the law and the Articles of Association of the company. Inspect the financial and administrative systems of the company as well as the internal financial auditing systems of the company in order to confirm its compliance with good conduct and good keeping of finances of the company. Verify the assets of the company and its ownership and confirm the legal compliance and validity of company obligations. Review the decisions of the Board of Directors and instructions issued by the company. Any other duties to be carried out by the auditor pursuant to this Law, the Auditors' Profession Regulation Law and other relevant auditing systems and principles. The accounts auditor shall submit a written report to the general assembly on his function. He or his representative shall read out the report before the general assembly. A copy of this report shall be sent to the concerned authority.
The report of the auditor aforementioned in the previous Article shall include the following: Whether the auditor has satisfactorily obtained all information, statements, and explanations that he deems necessary to perform his duties. Whether the balance accounts and regular records are consistent with the established universal principles and whether they clearly reflect the financial position of the company and the results of its operations and whether the company's balance sheet and profit and loss account are consistent with its ledgers and records. Whether the auditing procedures made by him for the accounts of the company are considered sufficient in his opinion to form the reasonable basis for expressing his opinion as to the financial position, business results and cash flows of the company in accordance with internationally approved auditing principles. Whether the financial statements contained in the report of the Board of Directors addressed to the general assembly conform to the company records and ledgers. Whether stocktaking was conducted according to established principles. Whether there were violations of the provisions of this Law or the Articles of Association of the company which occurred during the year the subject of the auditing and whether they had fundamental impact on the results of the company business and its financial position and if these violations still exist, in the light of information available to him.
Where it is not possible for the auditor to conduct functions and duties assigned thereto in accordance with the provisions of this Law, for any reasons, the auditor shall, before excusing himself from auditing, submit a report to the Ministry copied to the Board of Directors explaining the reasons preventing him from performing his duties. The Ministry shall discuss these reasons with the Board where possible, otherwise the Ministry shall call for a general assembly meeting to consider such matters.
Where the company has one or more auditors, they shall submit one report. This report shall be read out by one of them at the general assembly meeting. Where the general assembly decides to approve the report of the Board of Directors without hearing the report of the auditor, such decision shall be deemed null and void.
The auditor shall be responsible for the authenticity of the information and details stipulated in his report in his capacity as the representative for all shareholders. Every shareholder shall have the right, during the general assembly meeting, to discuss and request explanations from the auditor with regard to the content of his report.
The auditor and his employees shall not be permitted to trade in the shares of the company whose accounts are audited by him, whether this trading is conducted directly or indirectly, otherwise the auditor shall be dismissed and held accountable. The auditor shall also be requested to indemnify against any damage resulting from the breach of the provisions of this Article.
The auditors shall keep the secrets of the company and shall not, except in the general assembly meeting, disclose to the shareholders or others, any of the secrets of the company known to him by virtue of his assignment, otherwise he shall be dismissed and held accountable. The auditor shall indemnify the company or the shareholders or third parties against damages sustained thereby as a result of defaults on his part. In the case of more than one auditor, they shall be jointly liable for damages caused by their default.Any liability claim on the ground set out in the preceding paragraph shall not be considered after one year from the date of the general assembly meeting in which the report of the auditor was submitted. If the act attributed to the auditor constitutes a criminal offence, the claim shall stand valid throughout the duration of the general claim.
Chapter Five
Company Capital
Shares
Article 152 (Amended By Law 16/2006) The company's capital shall be divided into equal shares. The nominal value of each share shall not be less than ten Qatari Riyals. The issue expenses of these shares may not exceed 1% of the nominal value of the share.However, the nominal value of a share may not be less than ten Qatari Riyals provided that the Ministry's approval is granted. Article 153
Article 152 (Amended By Law 16/2006)
The company's capital shall be divided into equal shares. The nominal value of each share shall not be less than ten Qatari Riyals. The issue expenses of these shares may not exceed 1% of the nominal value of the share.However, the nominal value of a share may not be less than ten Qatari Riyals provided that the Ministry's approval is granted.
The shares of a company incorporated in Qatar shall be nominal
A share in the Joint Stock Company is indivisible. However, where the share is held by a number of persons, they shall elect one of them to represent them to use the rights pertaining to such share. All such persons shall be jointly liable for the obligations arising from the ownership of the share.It shall not be permitted to issue a share for less than its nominal value. However, the share may be issued at a higher price than its nominal value if so stipulated by the Articles of Association of the company or approved by an extraordinary general meeting of the company. In this case, the difference shall be added to the legal reserve.
The share value shall be paid in cash, in a single payment or instalments. An instalment value due to be paid up at subscription may not be less than 25% of the share value.In all cases, the share value shall be completely paid within five years from the date of the publication of the company's incorporation in the Official Gazette.
At the time of subscription, the company shall issue temporary certificates wherein the names of the shareholder, number of subscribed shares, amounts paid up and outstanding instalments shall be stated. These certificates shall stand for the ordinary shares until Amended with shares upon payment of all instalments
Where the shareholder fails to pay any instalment of the share value on its due date, the Board of Directors may act on the share by notifying the shareholder and calling for the payment of the due instalment by registered mail. In the event of the failure to pay within thirty days, the company may sell the share in a public auction or on the Stock Exchange. The company shall settle the defaulted instalments and expenses from the proceeds of sale and the remaining amount shall be returned to the shareholder. Notwithstanding the above, the defaulting shareholder may, even on the day of sale, pay the value due from him plus the expenses of the company. If the proceeds of sale are insufficient to settle these amounts, the company may collect them from his private assets. The company shall cancel the share on which such action was taken and the buyer shall be given a new shareholding in the place of the cancelled share. The sale shall be recorded in the share register stating the name of the new owner.
The company may hold material shares given against non-cash assets or evaluated rights. The founders shall request a civil court to appoint one or more experts to establish whether these shares were properly evaluated and rectified. Estimation of these shares shall not be final until approved by a group of underwriters with a majority possessing two thirds of the cash shares.Holders of shares in kind shall not have the right to vote even if they hold cash shares.Shares in kind may not represent shares that were not paid up completely. The shares representing material dividends shall not be delivered until their complete ownership is transferred to the company.
The company shall maintain a special record called the Shareholders Register, which includes names of shareholders, their nationalities and place of residence, shares held by each of them and the paid-up amount of the share value. The Ministry shall have the right to access these particulars and acquire copies thereof.The company may deposit a copy of this Register with any other authority in order to follow up affairs of shareholders and authorize that authority to keep and organize this Register, if it so wishes. The shareholders may also view this Register free of charge.Every concerned party shall be entitled to correct particulars included in the Register, especially when a name is entered or deleted without due justification. A copy of these particulars and any amendments thereof shall be sent to the concerned authority within a maximum of two weeks before the date specified for disposal of dividends to the shareholders.
Where the shareholding company intends to enlist its shares in the securities market, the procedures and principles as stipulated by the laws, regulations and guidelines for organizing the trading operations of securities in the State shall be followed, particularly those related to the handover of the Register provided in the previous Article to the body specified by these laws, regulations and guidelines.
Ownership of the shares shall be transferred upon their registration in the Shareholders Register and the share shall be transferred upon this registration. No objection against the company or others with regard to its disposal transaction shall be made except from the date of its registration in the Shareholders Register.Notwithstanding the above, the company shall be prohibited from disposing of shares in the following conditions: If such a disposal is contrary to the provisions of this Law or the Articles of Association of the company. If the shares are under lien or sequestration by a court order. If the shares are lost and no substitutes have been given.
Shares may be mortgaged by submitting them to the mortgagee. The mortgagee may receive the profits and use the rights related to the shares unless otherwise agreed in the mortgage contract
Sequestration on the company assets due to the debts of any shareholder shall not be permitted. Sequestration may be placed on shares of the indebted shareholder and profits accrued there from and sequestration shall be noted on the share entry in the Shareholders Register in accordance with Article 159 of this Law.
All decisions issued by the general assembly shall apply to the sequestrator, creditor and mortgagor in the same way as to the shareholder whose shares were sequestrated or to the mortgagor.Nonetheless, the sequestrator or mortgagor may not attend meetings of the general assembly or participate in its deliberations or approve its decisions. He shall not have any rights in the company.
The founders shall not be permitted to dispose of their shares until the completion of two years from the incorporation of the company. In the event of the death of any founder, the heirs shall have no right to dispose of the shares of their testator within this period.
All decisions issued by the ordinary or the extraordinary general assembly affecting the shareholder's rights derived from the provisions of this Law or the Articles of Association of the company or increasing his liabilities shall be deemed null and void.
The company Articles of Association may provide for restrictions pertaining to share trading, provided that these restrictions shall not prohibit the share trading.
Debentures
Article 168 The company may purchase its debentures for purposes of sale in accordance with measures determined by Qatar Financial Markets Authority. Article 169
Article 168
The company may purchase its debentures for purposes of sale in accordance with measures determined by Qatar Financial Markets Authority.
Debentures shall be nominal, and shall remain so until their value has been settled completely.
No loan debenture may be issued without fulfilling the following conditions: It must be provided for in the company Articles of Association. The company capital must be fully paid up. The value of debentures shall not exceed the current capital as per the latest approved balance sheet, unless these debentures are guaranteed by the State or one of the banks operating therein.
Debentures issued for a single loan (one credit) shall grant their owners equal rights, and any provisions to the contrary shall be null and void.
Debentures declared for public subscription shall be made through one or more banks accredited and operating in the State. Debentures shall be offered to the public at least fifteen days in advance by advertisement in two local daily newspapers published in Arabic and shall be signed by the members of the Board of Directors and include particulars determined by a decision issued by the Ministry. These particulars, inter alia, include the following: Decision of the general assembly for the issue of debentures and its date. Number of debentures issued and their value. Commencement and end date of subscription. Date of maturity of debentures, terms of payment and payment guarantees. Value of debentures already issued, their guarantees and the unpaid amount thereof upon the issue of the new bonds. The company capital. Headquarters of the company, date of incorporation and duration. Value of shares in kind. Summary of last balance sheet of the company approved by the accounts auditor.
New loan debentures shall not be permitted to be issued unless the subscribers to the previous debentures have paid the full value of the old debentures, provided that the balance of that value in addition to the value of new debentures shall not exceed company capital according to the latest approved balance sheet.
Within one month from the closure of subscription, the Board of Directors shall provide the Ministry with a statement on the subscription process and the names of subscribers and their nationalities and their respective subscriptions.
Decisions adopted during the shareholders' general assembly shall apply to debenture holders. Nevertheless, the general assembly may not amend the rights given to the debenture holders without approval issued by them in their general meeting according to the rules laid down at the extraordinary general meeting of the shareholders.
Debentures shall not be converted into shares unless so stipulated in the conditions of the debenture in accordance with the terms provided for in the preceding Article.If conversion is approved, the debenture holders may, at his discretion, either accept the conversion or receive the nominal value of the stock.
Where a share certificate or a nominal stock is lost or damaged, the holder thereof may demand a new instrument in replacement thereof.The owner shall publish, in one local Arabic newspaper, the serial numbers of the lost or damaged instruments.Where, within thirty days from the date of publication, no objection is received by the company, it shall provide the holder with a new instrument wherein it shall be stated that it is issued in replacement of a lost or damaged one. Such certificate shall grant its holder all the rights and obligations related to the lost or damaged instruments.
Anyone opposing the issue of an instrument in replacement of a lost or damaged one shall file his suit in the competent court of jurisdiction within fifteen days from the date of submitting his opposition. Failing which, the objection shall be deemed null and void.
Upon being notified of the final judgment, the concerned authority shall deliver to the owner the certificates in lieu of the lost or damaged ones upon notifying them of the final decision.
Chapter Six
Company Finance
Article 180 As specified in its Articles of Association, the company shall have a fiscal year of not less than twelve months except for the first fiscal year. Article 181
Article 180
As specified in its Articles of Association, the company shall have a fiscal year of not less than twelve months except for the first fiscal year.
At least two months prior to the annual general meeting of the company, the Board of Directors shall show, in each fiscal year, the balance sheet of the company, statements of profits and losses, and a report on the company activities during the previous fiscal year and its financial status during that year to the accounts auditor. The Chairperson of the Board of Directors and one of the members shall sign these documents.
The company shall publish biannual financial reports in the local Arabic daily newspapers for the reference of the shareholders. The accounts auditor shall verify these reports and the same shall not be published without the approval of the concerned authority
Unless a higher rate is specified by the Articles of Association of the company, 10% of the net profit of the company shall be deducted annually to create the legal reserve.The general assembly may stop making such deduction whenever the legal reserve reaches one half of the paid-up capital.The legal reserve may not be distributed among the shareholders. However, the excess beyond one half of the paid-up capital may be used for the distribution of dividends among the shareholders up to 5% in years where the company does not attain sufficient net profit to distribute this rate.
Upon a proposal by the Board of Directors, the general assembly may decide to annually deduct a portion of the net profits for an optional reserve. The optional reserve shall be used for any other purposes as decided by the general assembly.
A percentage specified by the Articles of Association of the company or the Board of Directors shall be deducted annually from the gross profit of the company for the depreciation of the company assets or as a compensation for their devaluation. This percentage shall be used to repair or purchase the necessary material and equipment for the company and shall not be distributed among the shareholders.
The general assembly shall decide to deduct part of the profits for compensating the company obligations arising out of the labour laws.The company Articles of Association may provide for the formation of a special fund to assist the company employees.
The Articles of Association of the company shall stipulate the minimum part of the net profits to be distributed among the shareholders after the deduction of the legal and optional reserves.The shareholder shall be entitled to his share of profits once a decision is issued by the general assembly. The Board of Directors shall implement this decision within thirty days from the date of its issue.
Chapter Seven
Amendment of Company Capital
Capital Increase
Article 188 Company capital shall not be increased unless the value of shares is completely paid Article 189
Article 188
Company capital shall not be increased unless the value of shares is completely paid
The company capital may be increased by a decision adopted by an extraordinary general assembly and the approval of the Ministry. The decision shall specify the amount of increase and issue rate of new shares.The general assembly may authorize the Board of Directors to fix the date for the implementation of that decision not later than one year from its date of issue
The company capital shall be increased by one of the following methods: Issue of new shares. Capitalization of the reserve or a part thereof or of the profits. Conversion of debentures into shares. Issue of new shares against shares in kind or evaluated right.
Regulations pertaining to subscription in the original shares shall apply to subscription in the new ones.
New shares shall be issued with a nominal value equal to the nominal value of the original shares. However, the extraordinary general assembly may decide a share premium to the nominal value of the share and determine its amount provided that approval of the Ministry is obtained. This share premium shall be added to the legal reserve.
The shareholders shall have priority to subscribe to the new shares. The shareholder shall not be permitted to assign his right in such priority to other persons
The Chairperson shall publish a statement in two local Arabic daily newspapers notifying the shareholders of their priority in subscription, opening date, closing date and price of the new shares.
Distribution of shares to applicant shareholders shall be pro rata to the shares held by them provided that it does not exceed their respective applications. The remaining shares shall be distributed to the shareholders who applied for more than the percentage of shares held by them. The remaining shares may also be offered for public subscription or disposed of upon approval of the concerned authority. Should shares in kind be included in subscription in such capital increase, evaluation of such shares shall be done in accordance with the provisions concerning the same, provided that the extraordinary general meeting shall stand for the general assembly of incorporation.
In the event that new shares are offered for public subscription, a subscription prospectus shall be published specifically, containing the following particulars: Reasons of capital increase. Decision of capital increase taken by the extraordinary general assembly. Company capital at the time of issuing new shares, amount of increase, number of new shares and premium, if any. Particulars of shares in kind or evaluated right, if any. A statement of profits distributed by the company during the three years prior to the date of the decision taken for the capital increase. Certificate from the accounts auditor to certify that statements included in the prospectus are accurate. This prospectus shall be signed by the Chairperson and the accounts auditor and they shall be jointly liable for the accuracy of particulars stated therein.
In the event of increasing the capital by the capitalization of distributable reserves, gratis shares shall be issued and distributed among the shareholders pro rata to shares held by each of them, or by increasing the nominal value of the shares proportionate to the casual increase of capital. This shall not impose any financial burdens on the shareholders.
Conversion of the debentures into shares shall be made by recovery of debentures, cancellation thereof, giving their holders shares in return and adding their value to the capital.
Decrease of Capital
Article 199 Subject to the Ministry's approval, the capital shall not be decreased except by a decision adopted in an extraordinary general assembly and after hearing the report of the accounts auditor. Such decrease may be made in the following two cases.1. If the capital exceeds the company's needs.2. If the company sustains losses. Article 200 (Amended By Law 16/2006)
Article 199
Subject to the Ministry's approval, the capital shall not be decreased except by a decision adopted in an extraordinary general assembly and after hearing the report of the accounts auditor. Such decrease may be made in the following two cases.1. If the capital exceeds the company's needs.2. If the company sustains losses.
The capital may be decreased by one of the following measures: Decreasing the number of shares by cancelling a number of shares equivalent to the value intended to be decreased. Decreasing the number of shares equivalent to the loss sustained by the company. Purchasing a number of shares equivalent to those intended to be decreased or cancelled.
The Board of Directors shall publish its decision to decrease capital in two local Arabic daily newspapers and the creditors shall provide the company, within sixty days from the date of publication, with supporting documents so that the company shall settle its immediate and provide adequate guarantees for deferred ones.
Where it is resolved to decrease the company capital through the purchase and cancelation of a number of its shares, all shareholders shall be invited to offer their shares for sale. Such invitation shall be published in two local Arabic daily newspapers.Shareholders may be informed by registered mail of the company's intention to purchase shares. Where the number of shares offered for sale exceeds the quantity decided to be purchased by the company, sale offers shall be reduced pro rata to the excess. The purchase price shall be fixed according to the provisions of the Articles of Association. Where no provision is stipulated in this respect, the company shall pay the fair price fixed by the company auditor in accordance with the prevailing evaluation methods or the market price, whichever is higher.
Section Eight
Private Joint Stock Company
Article 203 A number of founders, not being less than five, may, among themselves, incorporate a private Joint Stock Company whose shares shall not be offered for public subscription and they may subscribe to the full amount of the capital which shall not be less than two million Qatari Riyals. Article 204
Article 203
A number of founders, not being less than five, may, among themselves, incorporate a private Joint Stock Company whose shares shall not be offered for public subscription and they may subscribe to the full amount of the capital which shall not be less than two million Qatari Riyals.
Notwithstanding the provisions concerning public subscription and trading, all provisions contained herein with regard to public joint stock companies shall apply to private joint stock companies.
A private Joint Stock Company may be transformed into a public Joint Stock Company if it satisfies the following requirements: Nominal value of the shares issued must be paid up in full. The company must be more than two fiscal years old. During the pursuit of its objectives for which the company was established, the company must, during the two years preceding the application for transformation, have achieved net profits of not less than 10% of its capital, distributable to the shareholders. The decision of the transformation of the company must be adopted by a majority of three quarters in the extraordinary general meeting of the company. The Minister shall issue a decision declaring the transformation of the company into a public joint stock company. This decision, along with the Memorandum and Articles of Association of the company, shall be published at the expense of the company
Partnership Limited by Shares
Article 206 A partnership limited by shares is a company comprising two groups. One of them includes one or more partners jointly responsible for the debts of the company in all of their assets. The other group consists of shareholders, being not less than four. They shall not be responsible for the debts of the company except to the extent of their shares in the capital Article 207 (Amended By Law 16/2006)
Article 206
A partnership limited by shares is a company comprising two groups. One of them includes one or more partners jointly responsible for the debts of the company in all of their assets. The other group consists of shareholders, being not less than four. They shall not be responsible for the debts of the company except to the extent of their shares in the capital
In so far as the joint partners are concerned, the company shall be deemed a general partnership, and the joint partner shall be deemed a trader even if he had not attained such capacity before entering the company. All joint partners shall be citizens of the State.All joint partners shall be natural persons.
The name of the company shall consist of the name of one or more joint partners. An invented name or one derived from its own object may be annexed to its name.It shall not be permissible to insert the name of the shareholding partner in the company name, but, if inserted knowingly, he shall, with regard to bona fide others, be deemed a joint partner.In all cases, the term “partnership limited by shares” shall be added to the company name.
The capital of the company shall be divided into negotiable and indivisible shares of equal value.
The company capital shall not be less than one million Qatari Riyals fully paid at the time of incorporation.
Subscription in a partnership limited by shares shall be conducted according to the rules and regulations pertaining to subscription in shares of joint stock companies.
All the founder partners shall sign the company Memorandum and Articles of Association. The company Articles of Association shall include names of joint partners, their place of residence and nationalities in addition to the name of the manager appointed from among them.
The joint partner shall not be permitted to interfere in the management activities related to others even with authorization. However, he may participate in the internal management activities within the limits stipulated by the Articles of Association of the company
Where the joint partner violates the provisions of the preceding Article, he shall be held responsible in all of his assets for the liabilities arising out of the management work conducted by him. If he carries out such acts with authorization from the joint partners, the authorizing party along with him shall be responsible for the liabilities arising out of such activities.
Each partnership limited by shares shall have a general assembly comprising all joint partners and shareholders. Rules and regulations applicable to the general assembly of the Joint Stock Company as to its incorporation, meetings and voting on its decisions shall apply to the general assembly in the partnership limited by shares.The manager of a partnership limited shares shall replace the Board of Directors in inviting the general assembly for meetings.The general assembly shall represent shareholders before the managers.
The general assembly of the partnership limited by shares shall not be permitted to make disposal of the company matters related to others or amend the company Articles of Association without the approval of the managers, unless otherwise stipulated by the Articles of Association.
A partnership limited by shares shall have a supervisory Board comprising at least three members elected by the general assembly either from the shareholding partners or others in accordance with the Articles of Association. The joint partners shall have no vote in the election of the members of the supervisory Board.
The supervisory Board shall ascertain that procedures pertaining to the company's incorporation are taken in accordance with provisions of this Law and monitor its activities. For this purpose, the Board may request the managers to provide it with a report on their management. It may also examine the books, documents and records of the company and take stock of its assets.The Board shall express its views on such matters as the company managers may refer thereto, and declare its consent to the transactions whenever, under the Articles of Association, such consent is required.
The supervisory Board shall have the right to invite the general assembly to convene if significant breaches in the company management have occurred.The Board shall also submit at the end of each fiscal year a report on the results of its supervision to the general assembly of shareholders.The members of the supervisory Board shall not be responsible for the acts carried out by the managers or the results of these acts except for those discovered or which have come to their knowledge but of which they failed to notify the general assembly
The partnership limited by shares shall be managed by one or more joint partners. The provisions concerning the functions and removal of the managers of joint stock companies shall also apply to the managers of partnerships limited by shares.
The extraordinary general meeting shall not be permitted to take decisions regarding the amendment of the Articles of Associations of the company without the approval of all the joint partners, unless otherwise stipulated in the Articles of Association.
A partnership limited by shares shall have one or more auditor(s) who shall be subject to the same provisions that govern the auditors in joint stock companies
Subject to the provisions stipulated in this Part, the provisions concerning joint stock companies shall equally apply to partnerships limited by shares in the following: Rules pertaining to incorporation of the company and its registration. Rules concerning the company's financial accounts.
In the event of a vacancy in the post of the manager of the company, the supervisory Board shall appoint a temporary manager who shall attend to urgent administrative affairs until the general assembly meeting convenes.Such a temporary manager shall, within fifteen days from date of his appointment, invite the general assembly to convene in accordance with the procedures established by the Articles of Association, failing which the supervisory Board shall extend the invitation without delay. The temporary manager shall only be responsible for executing operations that are delegated to him.
Limited Liability Company
Incorporation of Company
Article 225 A limited liability company means a company in which the number of partners is not more than fifty and not less than two. Each partner shall be liable only to the extent of his share in the capital, and the partners' shares shall not be in the form of negotiable instruments. Article 226
Article 225
A limited liability company means a company in which the number of partners is not more than fifty and not less than two. Each partner shall be liable only to the extent of his share in the capital, and the partners' shares shall not be in the form of negotiable instruments.
A limited liability company shall have a name derived from its objectives or from the name of one or more partners. In both cases, the name of company may contain an inventive name provided that it is not misleading as to its objectives or identity.The term “limited liability company” or acronym shall be annexed to the company's name. In the event of failure on the part of the managers to observe the above clause, they shall be held responsible to the extent of their private assets as well as collectively for the liabilities of the company apart from remunerations.
The objective of a limited liability company shall never be the business of banks or insurance, or investment of funds for others in their own name or as agent.
A limited liability company shall neither seek public subscription for its formation nor increase its capital by obtaining loans. It shall not be entitled to issue shares or transferable bonds.
A limited liability company shall be established pursuant to the Memorandum signed by all partners, who shall include the following particulars, based on which a decision shall be issued by the Minister: Type, name and objectives of the company and its headquarters. Names of the partners, their nationalities, places of residence and addresses. Amount of the capital and share of each partner and particulars of the shares in kind, their amounts and names of subscribers therein, if any. Names and nationalities of the company managers and whether they are from partners or others, if their names are included in the Memorandum of Association. Names of members of the supervisory Board, if any. Term of the company. Methods of distribution of profits and losses. Conditions concerning the assignment of shares. Methods to be followed for addressing notices to the partners. The company Memorandum of Association may include provisions related to regularizing the right to recover the shares of partners, and method of evaluation when such right is exercised, as well as forming an optional reserve, organizing company finance and accounts and grounds for the company's dissolution
A limited liability company shall not be established unless all cash shares and shares in kind are distributed among the partners and the value of each share is paid in full.Cash shares of the company shall be deposited in one of the approved banks operating in the State. The bank shall not release the same except for the company managers and shall only do so upon the submission of documents proving the registration of the company in the Commercial Register.Where a partner submits a share in kind, it shall be mentioned in the company Memorandum of Association along with its value, the price accepted by other partners as well as the name of the partner and the amount this share represents in the capital against what he offered. The partner who offered the shares in kind shall be liable to others for the difference between the real and estimated value of such shares in the Memorandum. The remaining partners shall be jointly liable for the payment of such difference; unless it is proved that they are not aware of the same.However, a liability claim shall not be heard in this case after the lapse of five years from the date of the company registration in the Commercial Register.
The manager of the company shall apply for the registration of the company in the Commercial Register. Such application shall be annexed to the Memorandum of Association of the company along with other documents showing the distribution of shares among the partners, payment of their value in full and the deposit of the same in a bank operating in the State. Furthermore, all documents showing the delivery of shares in kind, if any, to the company shall be annexed. The company shall not conduct any of its activities unless after it is registered in the Commercial Register.
Shares and Capital
Article 232 The company capital shall be sufficient to achieve its objectives. It shall not be less than two hundred thousand Qatari Riyals distributed in equal value shares, and the value of each share shall not be less than ten Qatari Riyals.Profits and losses on the shares shall be distributed equally, unless otherwise stipulated in the company Memorandum of Association and in compliance with the provisions of Article 13 of this Law. Article 233
Article 232
The company capital shall be sufficient to achieve its objectives. It shall not be less than two hundred thousand Qatari Riyals distributed in equal value shares, and the value of each share shall not be less than ten Qatari Riyals.Profits and losses on the shares shall be distributed equally, unless otherwise stipulated in the company Memorandum of Association and in compliance with the provisions of Article 13 of this Law.
Company capital shall be distributed in shares of equal value paid up fully by the partners upon incorporation. A share shall be indivisible, and if the share is held by more than one person, the company may cease the use of rights pertaining to such shares until the holders of such shares choose one of them to be deemed as individual holder of the shares vis-à-vis the company. The company may fix a date for such owners to conduct this selection, failing which the company shall have the power to sell the share on behalf of its owners, and in this case the share shall be first offered to the partners and then to others.
The company shall keep a special ledger, at its head office for the partners, to include the following: Names of the partners, their places of residence, nationalities and professions. Number and value of shares owned by each partner. The assignments taken place of the shares along with the date of the same transactions, reasons of transferring the ownership, name of the assigner and assignee as well as their signatures. Total number of shares owned by the partners after the assignment. The company managers shall be collectively liable for the said register and the validity of its contents. The partners, and any concerned party, shall have the right to review this register
In compliance with the Memorandum of Association, a partner may, under an official instrument, assign his share to another partner or to other parties, and such assignment shall be valid with regard to the company and others only from the date of entry of the same in the company's register and the Commercial Register.The company may not refuse to enter the assignment in this Register unless it is inconsistent with its Memorandum of Association and this Law.
Unless the Memorandum of Association stipulates otherwise, a partner who intends to assign his share to a person who is not a partner in the company, for consideration, shall, through the company manager, notify the other partners of the assignment terms. Upon receipt of such notice, the manager shall notify the partners instantly. Each partner may request recovery of the said share at an actual price based on the same assignment terms. In the event of disagreement over the price, the company's auditor shall fix that price on the recovery date. If, after thirty days from the date of notification, no partner requests recovery of the share, the said partner shall be free to dispose of his share
The share of each partner shall be transferred to his heirs or his legatees. The provisions of the previous Article pertaining to recovery shall not apply to this transfer.
Where more than one partner uses the right of recovery, the shares, or the sold share, shall be divided among them pro rata to their shareholding, subject to the provisions of the aforementioned Article 233 of this Law.
Should the creditor of any partner practise execution procedures on the share of his debtor, he may agree with the debtor and the company on the method and terms of its sale, otherwise the share shall be offered for public auction. The company may recover the share for sale in favour of one or more partners on the same conditions of the auction within fifteen days from the date of awarding the tender. These provisions shall also apply in the case of bankruptcy.
Company Management
Article 240 The company manager shall have the full authority to carry out management affairs of the company, unless the Memorandum of Association limits his authorities.The manager's acts shall be binding on the company, provided that they are substantiated by the authority given to him.Any decision that provides for the change of managers or imposes restrictions on their powers shall not apply against others unless recorded in the Commercial Register. Article 241
Article 240
The company manager shall have the full authority to carry out management affairs of the company, unless the Memorandum of Association limits his authorities.The manager's acts shall be binding on the company, provided that they are substantiated by the authority given to him.Any decision that provides for the change of managers or imposes restrictions on their powers shall not apply against others unless recorded in the Commercial Register.
In the event of more than one manager, the Memorandum of Association may provide for the formation of a Board of Directors and determine both the tasks of the said Board and the majority needed for the validity of their decisions.
Provisions pertaining to liabilities of managers of a Joint Stock Company shall apply to the managers of a limited liability company.
Unless the approval of the general assembly is granted, the manager may not assume management in another competing company or a company that has similar objectives. He may not conclude, on his own account or on account of others, competing or commercial deals or transactions. Any breach of these provisions shall result in the dismissal of the manager and indemnity.
Where the number of the partners exceeds twenty, supervision shall be vested in a monitoring council comprising at least three partners for a limited period as stipulated in the company Memorandum of Association. The general assembly may reappoint them after the expiry of the said period or appoint other partners, and may dismiss them.The managers shall have no vote whether in the election of the monitoring council or in matters related to the removal thereof.
The monitoring council shall inspect the company ledgers and documents and shall carry out stocktaking of the funds, goods, financial papers and documents establishing the equities of the company. Furthermore, it may, at any time, instruct the managers to submit reports about their management. The monitoring council shall monitor the balance sheet and the distribution of the profits. The monitoring council shall submit its report in this regard to the general assembly of the company at least fifteen days before it convenes.
The members of the monitoring council shall not be liable for the actions of managers unless they became aware of the defaults therein and fail to refer to the same in their report to the general assembly.
A partner who is not a manager in a company where no monitoring council exists may offer advice to managers and request inspection, in the main office of the company, of its transactions, ledgers and documents. Any condition to the contrary shall be null and void
A limited liability company shall have a general meeting comprising all of the partners. The meeting shall convene at the invitation of the managers at least once every year within the four months preceding the expiry of the fiscal year at the venue and date stipulated in the Memorandum of Association.The managers shall invite the general assembly to hold a meeting if the same is requested either by the monitoring council or by a number of partners holding not less than one quarter of the capital.Invitations to the general meeting shall be sent by registered mail to each partner at the address stipulated in the Memorandum of Association, at least twenty-one days prior to the date of the meeting. The invitation letter shall include the meeting agenda, the venue and the time of the meeting and a copy of the balance sheet.
In each fiscal year, managers shall prepare the balance sheet of the company, the profit and loss accounts as well as report on the activities of the company and its financial position and their proposals about distributions of dividends within two months from the end of the fiscal year.Managers shall send copies of these documents, the report of the monitoring council and the auditor's report to the Ministry and to each partner within one month of preparing the aforementioned documents. Each partner shall be entitled to demand to be invited to a meeting to deliberate on such documents.
Each partner shall be entitled to attend the general assembly meeting irrespective of the number of shares owned by him. He may appoint a partner, other than a manager, to represent him by proxy at the general assembly meeting. Each partner shall have a number of votes equal to the number of shares owned or represented by him.
The agenda of the annual general assembly meeting shall include the following: Discussion of the report of the managers on the company activities and its financial position during the year, as well as the report of the monitoring council and that of the auditor. Discussion and approval of the balance sheet and the profit and loss accounts. Defining of the percentage of dividends to be distributed among the partners. Appointment of the managers and Board of Directors or the supervisory Board members (if any) and defining of their remunerations. Appointment of an auditor and fixing of his remunerations. Other matters within its jurisdiction in accordance with the provisions of this Law or the Memorandum of Association.
The general assembly may not deliberate on matters outside the scope of the agenda except if, during the meeting, certain significant facts demanding discussion are disclosed.Where a partner requests the inclusion of a specific item on the agenda, the managers shall comply therewith; otherwise the partner shall be entitled to revert to the general assembly meeting.
Each partner shall be entitled to discuss items on the agenda and the managers shall give replies to their queries. Where a partner considers the reply to his query as inadequate, he may revert to the general assembly whose resolution shall be enforceable.
Unless otherwise stipulated in the Memorandum of Association, the decisions issued by the general assembly shall be valid only if adopted by a number of votes representing at least one half of the capital.Where the requirement for such majority is not met during the first meeting, partners shall be invited to a second meeting, within twenty-one days from the first meeting. Unless otherwise stipulated in the Memorandum of Association, decisions in the second meeting shall be adopted by majority of the votes present.
The managers shall not be permitted to cast their votes on decisions related to their dismissal or suspension from the management.
It shall not be permissible to either amend the company Memorandum or to increase or decrease its capital, except by a decision issued by the general assembly based on the majority of votes holding three quarters of the capital, unless, in addition to the above quorum, a majority of the partners is stipulated in the company Memorandum of Association. Nevertheless, the partner's financial commitments shall not be increased except by their unanimous approval.
An adequate summary of minutes of the general assembly deliberations shall be issued. Together with the general assembly decisions, these minutes shall be entered in a special register kept at the headquarters of the company. Any partner may review the same either in person or through a proxy. He shall also be entitled to review the balance sheet, profit and loss accounts and annual report of the company.
The company shall have one or more auditors appointed each year by the general assembly. These auditors shall be subject to the same provisions as auditors in joint stock companies
Without prejudice to the rights of bona fide third parties, any resolution adopted by the general assembly or partners that is inconsistent with the provisions of this Law or the Memorandum of Association shall be null and void. Only the partners who object to such decision in writing and those who were unable to object after being made aware of it may demand the abrogation thereof.A nullified decision shall be invalid as against all the partners. After the lapse of one year from such decision, nullified claims shall be inadmissible, and, unless otherwise ordered by the court, the filing of the claim does not necessarily suspend the enforcement thereof.
The company shall allot each year 10% from the net profit to form the legal reserve.This allotment may be suspended if the reserve attains a value equivalent to 50% of the company capital. The legal reserve may be used to cover the losses of the company or to increase the capital of the company upon a decision by the general assembly.
Sole Proprietorship
Article 260 - (bis) 1 (Added By: Law 16 / 2006) Article 260 - (bis) 2 (Added By: Law 16 / 2006)
Article 260 - (bis) 1 (Added By: Law 16 / 2006)
Holding Company
Article 261 (Amended By Law 16/2006) A holding company is a joint stock or limited liability company that controls financially and administratively one or more other companies that becomes part thereof. The holding company shall own at least 51% of the shares or equities of this company or companies, whether these companies are joint stock companies, limited liability companies or sole proprietorships. Article 262
Article 261 (Amended By Law 16/2006)
A holding company is a joint stock or limited liability company that controls financially and administratively one or more other companies that becomes part thereof. The holding company shall own at least 51% of the shares or equities of this company or companies, whether these companies are joint stock companies, limited liability companies or sole proprietorships.
A holding company may not own shares in any kind of joint liability company or limited partnership company. It shall not own any shares in other holding companies
The capital of the holding company shall not be less than ten million Qatari Riyals
The objectives of the holding company shall be as follows: Participate in the management of its subsidiary companies or companies in which it holds shares. Invest property in shares, debentures and negotiable instruments. Provide the necessary support for its subsidiary companies. Own patent rights, commercial transactions, privileges and other legal rights. It shall also be entitled to exploit and lease its companies for itself or others. Own moveable and immoveable assets within the limits provided for in this Law.
In addition to its trade name, the term “holding company” shall be added to all documents, advertisements, correspondence and other documents that are issued by the holding company.
Without prejudice to the provisions of this Part, the provisions of this Law pertaining to joint stock companies, limited liability companies and sole proprietorships shall apply mutatis mutandis to all holding companies..
Transformation, Amalgamation, Division and Acquisition of Companies
Transformation of Company
Article 267 Pursuant to the provisions pertaining to amendment of the Memorandum or Articles of Association and provided that the conditions of incorporation and announcement with regard to the transformation of a company are fulfilled, a company may be transformed to take another status. A decision for transformation shall be annexed with a statement of all assets owned by the company, deductions and the estimated amounts of both of these. The company's transformation shall be entered in the Commercial Register. If a company is transformed to a joint stock company, three years must have lapsed from entry in the Commercial Register. Furthermore, the company must have achieved, by exercising its objectives, net profits that are distributable of not less than 10% of its capital within the two fiscal years preceding its request for transformation. Article 268
Article 267
Pursuant to the provisions pertaining to amendment of the Memorandum or Articles of Association and provided that the conditions of incorporation and announcement with regard to the transformation of a company are fulfilled, a company may be transformed to take another status. A decision for transformation shall be annexed with a statement of all assets owned by the company, deductions and the estimated amounts of both of these. The company's transformation shall be entered in the Commercial Register. If a company is transformed to a joint stock company, three years must have lapsed from entry in the Commercial Register. Furthermore, the company must have achieved, by exercising its objectives, net profits that are distributable of not less than 10% of its capital within the two fiscal years preceding its request for transformation.
Transformation of the company shall not result in the acquisition of a new legal personality. The transformed company shall maintain its rights and obligations that preceded its transformation.
Transformation shall not lead to a discharge of joint partners from liabilities that preceded transformation, unless otherwise approved by creditors. This approval shall be presumed if no objection was submitted by the creditors in writing within three months from the date they were formally informed of the transformation in accordance with the procedures issued under decree by the Minister.
In the event of transforming the company into a joint stock company, a partnership limited by shares or a limited liability company, each partner shall have shares or stocks equal to the value of his shares after valuation.If the partner's share falls short of the minimum limit of a share in a limited liability company, he shall have to make up the shortfall.
Partners or shareholders or stockholders who objected to the decision of transformation may request to withdraw from the company.
Amalgamation of Company
Article 272 Even if under liquidation, a company may be amalgamated with another company of the same or different kind. Article 273
Article 272
Even if under liquidation, a company may be amalgamated with another company of the same or different kind.
Amalgamation shall be by merging one or more companies to another existing company or by consolidation of two or more companies into a new company under incorporation. The amalgamation contract shall determine its conditions, especially those pertaining to the liabilities of the amalgamated company and the number of its stocks or shares in the capital of the company to be amalgamated into or formed by this amalgamation.Amalgamation shall not be valid unless a decision to this effect is issued by each Partner Company in accordance with the company Memorandum or Articles of Association. The amalgamation decision shall be announced by normal procedures pursuant to amendments made in the amalgamated company's Memorandum or Articles of Association.
Amalgamation by merger shall be undertaked as per the following procedures: A decision shall be issued by the amalgamated company calling for its dissolution. The net assets of the amalgamated company shall be evaluated according to the provisions concerning evaluation of the shares in kind contained herein. The parent company shall issue a decision increasing its capital in accordance with the evaluation of the amalgamated company. The increase in the capital shall be distributed among the partners in the amalgamated company pro rata to their shares. In the event of the shares being represented by stocks and provided that two years have elapsed since the date of incorporation of the parent company, the said stocks may be negotiated upon their issue.
Amalgamation by consolidation shall be effected by decision issued respectively by each of the companies in question calling for dissolution and thereafter the new company shall be established in accordance with the provisions stipulated herein. A number of stocks or shares shall be allocated to each amalgamated company equivalent to its share in the capital of the new company. These shares shall be distributed among the partners in each amalgamated company pro rata to their shares therein.
The decision of amalgamation shall be published in two local daily newspapers published in Arabic.
All the rights and obligations of the merged companies shall be carried over to the merging company or the company formed by the merger after the completion of the amalgamation procedures and registration of company in accordance with the provisions of this Law.The company that was merged into or formed by such amalgamation shall be the legal successor of the merged companies and shall replace them in all rights and obligations
Division of Company
Article 278 It is permitted to divide a company into two or more companies with the dissolution or maintaining of a company that was subject to division. In this event, the procedures and arrangements of amalgamation shall be adhered to for evaluation of the capital. Each company resulting from such a division shall have an independent legal personality and bear the effects thereof. A decision issued to effect such division shall specify the number of shareholders or partners, their names, the shares held by each of them in the companies incorporated as a result of this division, the rights and obligations of these companies and the method of distributing assets and deductions. Article 279
Article 278
It is permitted to divide a company into two or more companies with the dissolution or maintaining of a company that was subject to division. In this event, the procedures and arrangements of amalgamation shall be adhered to for evaluation of the capital. Each company resulting from such a division shall have an independent legal personality and bear the effects thereof. A decision issued to effect such division shall specify the number of shareholders or partners, their names, the shares held by each of them in the companies incorporated as a result of this division, the rights and obligations of these companies and the method of distributing assets and deductions.
Companies resulting from the division may take any legal form of companies taking into consideration the fulfilment of procedures of these forms according to the relevant legal provisions.
The division shall take place under a decision by extraordinary meeting of the general assembly of the company or partners, as the case may be, by majority vote representing three quarters of the capital.The companies resulting from such a division shall become legal successors to the divided companies to replace them legally within the limit of liability transferred pursuant to this division in accordance with the decision of division and without prejudice to the rights of the creditors.
Shares of the companies resulting from the division shall be negotiated as soon as they are issued, if the shares of the company subject to division were negotiable at the time the decision of division was issued.
Acquisition of a company shall take the form of direct or indirect ownership for part of the capital of another company or by obtaining a majority of voting rights through the purchase of all shares or part thereof or through a public offer for exchange or pursuant to an agreement with partners or shareholders without prejudice to the interests and objectives of the company or through any method provided for in the provisions of this Law. The acquisition shall not result in the abrogation of the legal personality of the company that was acquired or contravention of its rights and obligations.
Acquisition of company
Article 282 - (bis) 1 (Added By: Law 3 / 2010) Article 282 - (bis) 2 (Added By: Law 3 / 2010)
Article 282 - (bis) 1 (Added By: Law 3 / 2010)
Nullity of Company
Dissolution of Company
Article 283 In accordance with the grounds for dissolution of each form of company provided for in this Part, a company shall be dissolved on one of the following grounds: Expiry of the period fixed therefore in the Memorandum of Association unless renewed in accordance with the provisions included in the Memorandum or the Articles of Association. Fulfillment of the objectives for which the company was established or if it proves impossible for them to be fulfilled. Transfer of all stocks or shares to a number of partners or shareholders that is less than the number specified by this Law. Depreciation of all or most of the company assets to an extent whereby the investment of the remaining is deemed infeasible. Unanimous approval of the partners to dissolve the company before the end of its term unless a certain majority is provided for in the Memorandum of Association. Amalgamation of the company into another. Judicial order to dissolve the company or declaration of its bankruptcy. Article 284
Article 283
In accordance with the grounds for dissolution of each form of company provided for in this Part, a company shall be dissolved on one of the following grounds: Expiry of the period fixed therefore in the Memorandum of Association unless renewed in accordance with the provisions included in the Memorandum or the Articles of Association. Fulfillment of the objectives for which the company was established or if it proves impossible for them to be fulfilled. Transfer of all stocks or shares to a number of partners or shareholders that is less than the number specified by this Law. Depreciation of all or most of the company assets to an extent whereby the investment of the remaining is deemed infeasible. Unanimous approval of the partners to dissolve the company before the end of its term unless a certain majority is provided for in the Memorandum of Association. Amalgamation of the company into another. Judicial order to dissolve the company or declaration of its bankruptcy.
The court may dissolve any general partnership or partnership limited by shares or joint venture companies at the request of one of the partners if reasonable grounds justify the same. Any provision depriving the partners of the right to exercise such right shall be null and void.If the grounds of the dissolution are attributed to the acts of one of the partners, the court may order his removal from the company, and in this case the company shall continue to exist between the remaining partners. The share of the partner who is ordered to be removed from the company as per the value on the day of removal shall be paid to him in cash. This partner shall not have a share in the remainder of the company entitlements unless the latter resulted from preceding operations before his removal.The court may also order the dissolution of the company at the request of one of the partners in the event of failure on the part of any partner to fulfil his duties.
Joint liability companies or partnerships or limited partnerships shall be dissolved upon the death of a partner or the issuance of a judgment of sequestration, bankruptcy or insolvency against a partner. The Memorandum of Association may, however, include a provision for the validity of the company with the heirs of the deceased partner, even if such heirs are minors.Where the withdrawal of a partner is made mala fides or at an inappropriate time, judgment may be given for the continuation of the company in addition to indemnity, if necessary
Where no provision is made in the Articles of Association of a joint liability company or partnership or limited partnership regarding the continuation thereof in the event of withdrawal or death of one partner, judgment of sequestration, bankruptcy or insolvency against him, the partners may,