Kuwait Companies Law (Law No. 1 of 2016)

المادة 1

In the application of this law, the following phrases and words shall bear the meanings corresponding to each of them: Announcement: The announcement in two daily local newspapers which are published in the Arabic language and on the company’s electronic website, if available. Authority: Capital Markets Authority. Company Contract: The memorandum of incorporation or the memorandum of incorporation and articles of association, if applicable. Incorporator: Anyone who takes actual part in the incorporation of the company, executes the contract thereof in person or through a representative and participates in the capital of the company with a cash or in-kind share. Minister: The Minister of Commerce and Industry. Ministry: The Ministry of Commerce and Industry. Publication: The publication in the Official Gazette (Al Kuwait Al Yawm). Proclamation: The Registration along with the Publication in the Official Gazette. Registration: Registration in the commercial register. Supervisory Authorities: The Ministry, the Authority or the Central Bank of Kuwait in respect of companies that are subject to the supervision of any of them, or any other authorities determined by the law.

المادة 2

The provisions stipulated in this section shall apply to all companies taking into account the special provisions related to each form of company provided for in this law.

المادة 3

The company is incorporated by virtue of a contract by which two or more persons undertake to participate in a profit-making project with each of them offering a contribution in assets or labour, to divide what is generated from the project in profits and losses. A company – under the circumstances stipulated in the provisions of this law – may be incorporated according to the unilateral intention of one single person. Companies whose purpose is not the generation of profit may also be incorporated by virtue of a contract or articles setting out the partners' rights and obligations as well as any other terms. The transfer of partners' interests shall be subject to the partners' right to redemption pursuant to the specific terms regulated by the Company Contract in addition to the provisions established in this law. The company shall not issue negotiable bonds or Sukuk and shall not receive donations. The company shall have a name of its own relevant to its purpose that may include the name of a partner or more. The executive regulations shall set out the regulations of these companies and the template of their memorandum of incorporation provided that they take one of the forms provided for in Article 4 that suits their nature on condition that they do not take the form of a Public Shareholding Company.

المادة 4

A company shall take one of the following forms: 1. General Partnership Company. 2. Limited Partnership Company. 3. Partnership Limited by Shares. 4. Joint Venture Company 5. Shareholding Company. 6. Limited Liability Company. 7. Single Person Company. Parties to an agreement, which does not constitute any one of the forms indicated in the previous paragraph shall be held personally and jointly liable for the obligations arising therefrom.

المادة 5

The Ministry shall notify the Incorporators of the incorporation of the company within three working days as of the date of submission of the documents and completion of the procedures as per the provisions of this law and the executive regulations thereto. See regulations regarding the Single Person Company in Articles 85 et seq. The executive regulations shall regulate the procedures of incorporation of a company and the amendment of its Company Contract, as well as the issuance of the licenses required to practice the activities of the company or any other procedures or approvals required by more than one authority in a manner that ensures that all such procedures are completed through a special department at the Ministry that includes representatives of the relevant governmental authorities.

المادة 6

The approval of the Central Bank of Kuwait or the Authority, as applicable, is required with regard to the incorporation of companies and to the Company Contract, which are subject to the supervision of either of them.

المادة 7

With the exception of the Joint Venture Company, the Company Contract shall be written in an authenticated document, or else, it shall be null and void. The partners may among themselves object to the validity of the Company Contract due to it not being written in the manner stated in the previous paragraph. However, they may not object such validity towards third parties. Third parties have the right to object the validity of the Company Contract towards the partners. If a judgment is rendered invalidating the Company Contract pursuant to the request of a third party, the company shall be deemed null and void towards such third party. However, if a judgment is rendered invalidating the Company Contract pursuant to the request of one of the partners, such invalidation shall only have effect towards such partner as of the date of filing the claim.

المادة 8

The company’s Incorporators or partners – as the case may be – shall be held jointly liable towards the company, its partners or third parties for damages incurred due to the invalidity of the Company Contract.

المادة 9

With exception of the Joint Venture Company, the Company Contract and any amendments thereto shall be Proclaimed in accordance with the provisions of this law. If the Company Contract is not Proclaimed in the stated manner, it shall be rendered ineffective towards third parties. If the lack of Proclamation is limited to one or more statements that are to be Proclaimed, only these statements shall be ineffective towards third parties. However, bona fide third parties shall be able to assert the existence of the company or any amendments to the Company Contract even if these have not been Proclaimed. The company’s managing directors or board members shall be jointly liable towards the company, its partners or bona fide third parties for damages incurred due to the lack of Proclamation. See Article 2 of the Authentication Law (Law No. (4) of 1961 as amended by Law No. (1) of 1965). The original Arabic language version of the law differentiates between "partner" (‫ )ﺷﺮﻳﯾﻚ‬and "shareholder" (‫)ﻣﺴﺎﻫﮬﮪھﻢ‬. The term "partner" (‫ )ﺷﺮﻳﯾﻚ‬is used for partners in the General Partnership Company, the Limited Partnership Company, the Partnership Limited by Shares and the Limited Liability Company. The term "shareholder" (‫ )ﻣﺴﺎﻫﮬﮪھﻢ‬is used only in the case of the Shareholding Company. In Section 1 (General Provisions) and Section 12 (Transformation, Merger, Division, Termination of Companies) the law uses the term "partner" (‫ )ﺷﺮﻳﯾﻚ‬to define both partners and shareholders. In Section 1 (General Provisions) a differentiation between partners and shareholders is only made in Articles 16 and 30. In the Arabic a term is used that clarifies that the company is considered invalidated ex ante towards the third party.

المادة 10

The Company Contract of the two forms of Shareholding Companies shall include the memorandum of incorporation and articles of association. Other forms of companies – with the exception of the Joint Venture Company – shall have a memorandum of incorporation and the partners may also establish articles of association. The company’s articles of association – if applicable – shall be considered part of the Company Contract. The executive regulations shall include the template of the memorandum of incorporation and articles of association for the companies stated in this law. Such template shall set out the information and the terms stipulated by the law and the executive regulations. It shall further set out the terms that partners and Incorporators may not agree to in contravention of the law and the executive regulations. The partners shall have the right to add such terms that do not contravene the mandatory provisions of this law and the executive regulations.

المادة 11

If the capital includes – at the time of incorporation of the company or of a capital increase – in-kind contributions, an auditing firm approved by the Authority shall assess such contributions. The executive regulations shall determine the basis and criteria of the valuation of in-kind contributions. Such valuation shall not be final unless the partners, constituent meeting or the general meeting approves it, as the case may be. The party making the in-kind contribution shall not have the right to vote on the approval of the valuation, even if it holds cash shares or cash membership interests. If the value of the in-kind contribution is ascertained to be less than one-tenth of the value it was contributed for, the company shall reduce its capital by an amount equivalent to such difference. The party making the in-kind contribution may also pay the difference in cash or may refrain from the subscription through the in-kind contribution. In all cases, in-kind shares may only represent fully paid shares or membership interests.

المادة 12

The company may not bear the name of another company or a similar name if such name belongs to a company that practices the same activity, except if such company is in liquidation and has approved the use of the name. The company, which claims that another company is using its name or a similar name, shall seek the Ministry to instruct the other company to change such name. The Ministry shall decide on the request within 60 days as of the date of its submission; or else, it shall be deemed rejected. The executive regulations shall set out the requirements for the request as well as the documents required to be attached thereto.

المادة 13

The company may change its name as per the procedures required to amend the Company Contract. The new name shall be Proclaimed. The change of the company name shall not affect the company's rights or obligations or any legal action initiated by In the original Arabic language version of the law a differentiation is made between shares (‫)ﺃأﺳﻬﮭﻢ‬, which define the shares in Shareholding Companies and those held by partners in Partnerships Limited by Shares and membership interests (‫)ﺣﺼﺺ‬, which define the shares held in a General Partnership Company, Limited Partnership Company, Joint Venture Company, Limited Liability Company and Single Person Company. or against the company.

المادة 14

The company shall have one or more specified objectives to which it shall remain restricted to the objectives indicated in the Company Contract. However, the company may perform activities that are similar, complementary, necessary or associated to the stated objectives. The company may amend its objectives even if this leads to a change in the company’s activities, provided that it shall follow the procedures of amending the Company Contract in accordance with the law. It is permitted to incorporate companies with the specific objective of issuing Sukuk or other such securitization activities or any other objective. The executive regulations shall state the criteria and specific regulations in this regard.

المادة 15

Without prejudice to the provisions of the aforementioned Law No. (7) of 2010 regarding Licensed Persons who operate in compliance with Islamic Shari'a, companies whose objectives are set to be in accordance with Islamic Shari'a shall perform their activities in compliance with Islamic Shari'a. Such companies shall form an independent Shari'a supervisory board to supervise the company’s operations. The members of this supervisory board shall not be less than three and shall be appointed by the partners' meeting. The Company Contract shall refer to this supervisory board, set out the method of its formation, its competencies and the way it functions. In case any dispute arises between the members of the Shari'a supervisory board in respect of any Shari'a provision, the company may refer such dispute to the Fatwa and Legislation Department at the Ministry of Awqaf and Islamic Affairs, which shall be considered the final arbiter in the matter. The Shari'a supervisory board shall submit an annual report to the company’s general meeting or partners' meeting. Such report shall state the supervisory board’s opinion to what extent the business of the company is compliant with Islamic Shari'a in addition to any other remarks it may have. This report shall be included in the company’s annual report. In all cases, if the activities of a company are within the objectives of the company and comply with the principles of Islamic Shari'a type contracts, the provisions of Articles 508, 992 and 1041 of the Civil Law and Article 237 of the Commercial Law shall not apply.

المادة 16

The company shall be incorporated for the term, which the Incorporators specify in the Company Contract. Such term may be extended prior to its expiry by virtue of a resolution issued by the general meeting of the partners or shareholders holding more than half of the capital. Licensed Person (‫ )ﺍاﻟﺸﺨﺺ ﺍاﻟﻤﺮﺧﺺ ﻟﻪﮫ‬is defined in Book 1 of the Executive Regulations to Law No. (7) of 2010 (CMA Decision 72 of 2015) as a natural person or legal person licensed by the Capital Market Authority to practice securities activities as provided for in Article 1-2 of Book 5 of the Executive Regulations to Law No. (7) of 2010. Partners' Meeting (‫ )ﺍاﺟﺘﻤﺎﻉع ﺍاﻟﺸﺮﻛﺎء‬is defined as the meeting of partners in the General Partnership Company and the Limited Partnership Company. This article should, however, be read to also include the General Meeting (‫)ﺍاﻟﺠﻤﻌﻴﯿﺔ ﺍاﻟﻌﺎﻣﺔ‬, which is defined as the meeting of shareholders/partners in the Shareholding Company, Limited Liability Company and Partnership Limited by Shares. Civil Law promulgated by Decree Law No. (67) of 1980 as amended Commercial Law promulgated by Decree Law No. (68) of 1980 as amended If no resolution of extension is issued and the company continues its activities, the term shall be automatically extended for another period equal to that specified in the Company Contract and in accordance with the same terms. A partner, who does not wish to remain in the company following the expiry of its term, may withdraw from the company. In such an event, the rights of such partner shall be assessed in accordance with the provisions of the first paragraph of Article 11 of this law.

المادة 17

The partner’s share may be a certain amount of money (cash contribution), an in-kind contribution or labour that may serve the company’s objectives. The partner’s contribution shall not be in the form of his reputation, influence or financial standing. Furthermore, only cash contributions and in-kind contributions shall constitute the company’s capital. Unless otherwise agreed upon by agreement or custom, the partners' contribution shall be of equal value and shall relate to property ownership and not only the usufruct.

المادة 18

All partners shall share the profits and losses in proportion to their share in the capital in accordance with the following principles: 1. If the Company Contract does not specify the portion of a partner's participation in the profits and losses, each partner shall participate in the profits and losses in proportions equal to their respective share in the capital. 2. If the Company Contract includes a provision that excludes a partner from sharing in the profits or exempts a partner from sharing in the losses of the company, such provision shall be null and void and the Company Contract shall remain valid. 3. If the Company Contract only specifies a partner’s share in the profit, such partner’s share in the loss shall be equal to that in the profit. The same shall apply if the Company Contract only specifies the partner’s share in the loss. Any provision granting a partner fixed interest income for his share in the company shall be null and void.

المادة 19

If the partner’s contribution is in the form of labour and his participation in the profit and loss is not specified in the Company Contract, such partner shall have the right to request a valuation of his labour. Such valuation shall be the basis on which the partner’s share in the profit and loss shall be determined in accordance with the aforementioned principles. It may be agreed that a partner who provides his participation only in labour shall be relieved from participating in the losses, provided that such partner is not paid for his labour. If a partner, in addition to his labour, provides a cash or in-kind contribution, he shall be deemed to have a share in the profits and losses for his labour and a separate share for his cash or in-kind contribution. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12.

المادة 20

Fictitious profits shall not be distributed, or else, the creditors of the company may demand repayment of such profits from the partners and whoever else has benefited from them, even if such benefiting person was bona fide. The company’s managing director or the board of directors that has recommended the distribution of such fictitious profits shall be held jointly liable for the repayment of such profits. A partner shall not be obligated to repay real profits received, even if the company incurs losses in the following years.

المادة 21

The company shall be liable for acts or the conduct of its managing director or board of directors performed in its name or on its behalf, if such acts or conduct remain within the company’s objectives, even if such acts or conduct extend beyond the restricted scope of the managing director or the board of directors' authority determined in the Company Contract and unless the company proves that he who was subjected to such acts or conduct was aware or had the means to become aware of such restrictions at the time of the occurrence of the act or conduct. The company may not repudiate its responsibility towards a bona fide third party for acts or conducts as described in the previous paragraph by claiming that the managing director or the board of directors have been appointed in contravention of the provisions of the law or the Company Contract unless the company proves that he who was subjected to such acts or conduct was aware or was able to be aware of such defect at the time of the occurrence of the act or conduct. The company’s managing director or the board of directors shall apply the care of a prudent person in exercising their powers and competencies.

المادة 22

All correspondence, receipts and other documents issued by the company shall bear the company’s name, its legal form and its registration number in the commercial register. With the exception of the General Partnership Company, the Limited Partnership Company, and the Partnership Limited by Shares, the capital of the company and the amount of capital that has been paid up shall additionally be indicated. If the company is in liquidation, this shall be mentioned in the papers issued by the company. The company’s legal representative who violates the provision of this Article shall be held jointly liable with the company for any damages incurred by a bona fide third party as a result of such violation, if it is proven that the company’s assets are insufficient to compensate for such damages.

المادة 23

Except for a Joint Venture Company, the company shall be vested with legal capacity as of the date of Registration. Every company established in the State of Kuwait shall be of Kuwaiti nationality and shall have its domicile in In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. Kuwait, the details of which shall be recorded in the commercial register. Such domicile shall be the valid address in respect of correspondence and legal notices that are addressed to the company. The change of such domicile shall not be deemed valid unless it is Registered in the commercial register.

المادة 24

The company shall not undertake its activities until after Proclamation and after obtaining the required licenses to undertake such activities.

المادة 25

Following incorporation, the company shall have rights in the contracts entered into and the acts performed by the Incorporators in the name of the company while it was under incorporation, if these were necessary for the incorporation. The company shall bear all the expenses of the Incorporators.

المادة 26

Following incorporation, the company shall not have rights in any act performed between the company under incorporation and its Incorporators, unless such acts have been approved by the constituent meeting in which the votes of Incorporators with an interest shall not be considered, unless the act is performed by all partners. In all cases, the Incorporators with an interest shall submit a report containing all relevant accounts and information related to such acts. Such report shall be made available at the company’s domicile seven days before the constituent meeting is convened. All shareholders shall have the right to access such report, and it shall be referred to in the invitation to the constituent meeting.

المادة 27

Without prejudice to the principles of criminal liability, the Incorporators shall - during the period of incorporation of the company - undertake to apply the care of a prudent person when dealing in the name and on behalf of the company. The Incorporators shall be jointly liable for any obligations or damages that may affect the company or third parties as a result of their actions or violation of these obligations. If the Incorporator receives any assets or information that relates to the company under incorporation, the Incorporator shall transfer such assets to the company in addition to any profits that he may have earned as a result of using such assets or information. The Incorporators shall be jointly liable for their obligations.

المادة 28

With respect to all companies, any claim filed by a company’s creditor against its partners shall not be heard if such claim has been refuted and five years have lapsed since the incorporation of the company or since the partner has exited the company and the case filed pertains to such partner. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "shareholder" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In the event a debt against the company existed during the partner’s participation in the company and such debt falls due after the partner has exited the company, the limitation period shall commence as of the due date of the claim. In accordance with the provisions in the previous paragraph, the limitation period, following which cases shall not be heard, shall begin on the date of Proclamation in all cases where a Proclamation is required.

المادة 29

If a judgment is rendered invalidating the Company Contract, the company shall in this case be deemed a factual company. The terms of the Company Contract shall apply in respect to its liquidation and the settlement of claims between the partners. The invalidity of the Company Contract shall not result in the invalidity of the conducts performed by the Company during the period prior to the date on which the final judgment is rendered in respect of the invalidity, unless such conduct is deemed invalid due to other reasons.

المادة 30

The Incorporators, shareholders or partners can - during the period preceding or following the incorporation conclude an agreement that governs the relationship among them. Such agreement may not include a condition that releases some or all Incorporators from their liability arising in connection with the incorporation of the company. It shall also not include any other terms that bind the company, except if such provisions have been approved by the company’s competent authority. Furthermore, the terms of such agreement shall not contravene the mandatory provisions of this law.

المادة 31

The Company Contract shall be kept at the company’s domicile and published on the company’s website, if available. Any person may obtain an original copy of the Company Contract in consideration for certain fees to be determined by the company.

المادة 32

Any party with an interest shall have the right to inspect the Company Contract, minutes of the Company’s general meetings and other relevant information and documents relating to the company and held at the Ministry. Such parties may obtain original copies in return for fees to be determined by the Ministry.

المادة 33

In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. In this Article the term "partner" includes both the "partner" and the "shareholder". See footnote 12. The General Partnership Company is a company established between two or more persons and that operates under a certain name. The partners of the company are personally and jointly liable with all their assets for all obligations of the company. Any agreement to the contrary is null and void.

المادة 34

Each partner in the General Partnership Company shall have the capacity of a merchant. Each partner shall be deemed carrying out merchant activities under the name of the company. The bankruptcy of the company shall result in the bankruptcy of all its partners. The capacity of the partner as a merchant shall not obligate him to carry out the duties of a merchant, except if such partner carries out other commercial activities that require him to do so.

المادة 35

The name of the Company shall be formed of the names of all partners, or one or more of their names with the addition of the phrase ("and Partners" or "and their Partners"). The name of the company shall correspond to its actual form and conform to its actual activities. The name of the company shall be followed by the phrase ("General Partnership Company"). The name of the company shall not include the name of a person who is not a partner therein. If the name includes the name of person who is not a partner and such person is aware of this, he shall be jointly liable with the partners for the obligations of the company towards bona fide third parties. Without prejudice to the provision in the previous paragraph, the company may use in its name, the name of a partner who has withdrawn or is deceased, if the partner who has withdrawn or the heirs of the deceased partner agree to such use.

المادة 36

The General Partnership Company may not obtain financing by issuing bonds or Sukuk through public offerings. In the original Arabic language version of the law a differentiation is made between the company title (‫)ﻋﻨﻮﺍاﻥن‬, which is used for the General Partnership Company, the Limited Partnership Company and the Partnership Limited by Shares and the name (‫)ﺍاﺳﻢ‬, which is used for the Limited Liability Company and Shareholding Company. This translation uses the term "name" for both Arabic terms. As defined in Articles 13 et seq. of the Commercial Law (Decree Law No. (68) of 1980). As defined in Articles 3 et seq. of the Commercial Law (Decree Law No. (68) of 1980). See footnote 33. Regulated in Articles 555 et seq. of the Commercial Law (Decree Law No. (68) of 1980). Similar to the meaning of corporate insolvency as understood in the UK or corporate bankruptcy as understood in the USA. As defined in Articles 13 et seq. of the Commercial Law (Decree Law No. (68) of 1980). See footnote 33. See footnote 33. The original Arabic language version of the law uses the phrase "conform to reality" (‫)ﻣﻄﺎﺑﻘﺎ ﻟﻠﺤﻘﻴﯿﻘﺔ‬. See footnote 33. See footnote 33. See footnote 33. See footnote 33. Book 1 of the Executive Regulations to Law No. (7) of 2010 (CMA Decision 72 of 2015) for definition of “Public Offering”

المادة 37

The capital of the company shall be sufficient to accomplish its objectives. The executive regulations shall state the minimum capital of the company and it shall be divided into equal membership interests that are not divisible.

المادة 38

The Company Contract of the General Partnership Company shall include the following particulars: 1. The name of the company and its trade name, if any. 2. The company’s headquarters. 3. The objectives of incorporating the company. 4. The term of the company, if any. 5. Name, title and residential address of each of the partners. 6. The manner of management and those responsible of the management as well as their powers. 7. The company's capital, the membership interest of each partner in the capital, a statement of any in-kind contribution, its nature and the assessed value. Kuwaiti partners shall own no less than 51% of the company's capital. 8. Special provisions regarding the distribution of profits and losses between the partners. 9. The financial year of the company. 10. Special provisions regarding the liquidation of the company and the division of its assets. The partners may add additional information.

المادة 39

The membership interests of partners in the General Partnership Company shall not take the form of negotiable securities.

المادة 40

Pursuant to Ministerial Decision No. 234 of 2015, the minimum capital for General Partnerships, Limited Partnerships, Partnerships Limited by Shares, Single Person Companies, Limited Liability Companies and sole proprietorships is KD 1,000. The minimum capital for a Closed Shareholding Company is KD 10,000 and for a Public Shareholding Company KD 25,000. The Arabic language version uses the phrase "the provisions subject to" (‫ )ﺍاﻷﺣﻜﺎﻡم ﺍاﻟﺨﺎﺿﻌﺔ‬instead of the phrase "special provisions" (‫)ﺍاﻷﺣﻜﺎﻡم ﺍاﻟﺨﺎﺻﺔ‬. Transfer of Membership Interests in a General Partnership Company A partner may transfer his membership interests in the company to the other partners. He may not transfer his membership interests to anyone who is not a partner in the company unless the Company Contract stipulates otherwise. Such transfer shall not be effective towards third parties unless the Registration procedures have been fulfilled.

المادة 41

A partner may transfer the financial rights attached to his membership interests in the company. The provisions regarding the assignment of rights shall apply to such transfer.

المادة 42

A partner may pledge his membership interests in the company. The pledge shall be made in writing. The pledge shall only be valid towards the company and third parties as of the date of Registration of the pledge in the commercial register.

المادة 43

The creditors of a personal debt of any of the partners shall not have the right to seize any assets of the company, but shall have the right to seize the membership interest of their debtor. If the creditor of a partner initiates execution procedures over a membership interest, such creditor may agree with the debtor and the company on the means of sale and the conditions thereof. In such case, the membership interests shall be transferred in accordance with the provisions set out in Article 40 of this law. If no agreement is reached on the means of sale within fifteen days as of the date of seizure, the membership interest shall be offered for sale by way of public auction in accordance with the procedures determined in the Civil and Commercial Procedures Law. The base price shall be determined after the valuation of the membership interest as set out in the first paragraph of Article 11 of this law. To the exclusion of the partner whose membership interests have been seized, the judge overseeing the sale shall grant the remaining partners three days to raise any objections against the bidder with the best offer to participate in the company. If none of the partners objects during the specified period, a judgment shall be issued awarding the auction. The Company Contract shall be amended on the basis of such judgment. Such amendment shall not be valid towards third parties unless the Registration procedures are fulfilled. The company or any of the partners may – until a judgment is rendered in respect of the auction award – fulfil the indebtedness of the partner whose membership interests have been seized. Within the aforementioned period, the company may also redeem part of the seized membership interests in favour of all or In the original Arabic language version of the law the broader term surrender (‫ )ﺗﻨﺎﺯزﻝل‬is used, which in its legal usage also includes the transfer of shares. See Articles 364 et seq. Civil Law (Decree Law (67) of 1980). See Articles 206 et seq. Civil and Commercial Procedures Law (Decree Law (38) of 1980) in regard to execution procedures. In the original Arabic language version of the law the broader term surrender (‫ )ﺗﻨﺎﺯزﻝل‬is used, which in its legal usage also includes the transfer of shares. See Articles 216 et seq. Civil and Commercial Procedures Law (Decree Law (38) of 1980) in regard to seizure of assets and specifically Articles 261 et seq. Civil and Commercial Procedures Law (Decree Law (38) of 1980) in respect of seizure of shares and membership interests. See Articles 253 et seq. Civil and Commercial Procedures Law (Decree Law (38) of 1980) in regard to public auction proceedings. See Article 266 et seq. Civil and Commercial Procedures Law (Decree Law (38) of 1980) in regard to the judge overseeing the sale (‫)ﻗﺎﺿﻲ ﺍاﻟﺒﻴﯿﻮﻉع‬. some of the partners up to the amount required to fulfil the creditor’s debt. If any of the partners objects to the bidder, who has been awarded the auction, joining the company, and neither the company nor the partners fulfil the creditor’s debt or redeem the membership interests in accordance with the provisions of the previous paragraph, the judge overseeing the sale shall render a judgment dissolving and liquidating the company and appointing a liquidator. Such judgment can be appealed in accordance with the provisions of the law.

المادة 44

The company shall be managed by one partner or more. The Company Contract shall determine the manner of the manager’s appointment, dismissal and the limits of his management authority. If the company has more than one manager and the Company Contract does not contain any specific provisions, decisions of the management shall be passed by a majority of the managers. In the case of a tie vote, the managers shall refer the matter to the partners for decision. Any approval shall be passed by decision of the majority of the partners.

المادة 45

If no manager is appointed and the Company Contract does not stipulate that the company shall be managed jointly by the partners, each partner shall have the power of management. Any partner shall have the right to object to any undertaking by another partner prior to its execution. In this case, the matter shall be referred to the partners for decision. Any approval shall be passed by decision of the majority of the partners.

المادة 46

The manager shall not transgress the limits of ordinary management without the approval of all the partners or by explicit reference in the Company Contract. Such prohibition shall specifically apply to the following actions: 1. Donations. 2. Selling real estate of the company, unless such action is deemed part of the company’s objectives. 3. Pledging the company’s assets. 4. Selling or pledging the company’s trading business. See Article 266 et seq. Civil and Commercial Procedures Law (Decree Law (38) of 1980) in regard to the judge overseeing the sale (‫)ﻗﺎﺿﻲ ﺍاﻟﺒﻴﯿﻮﻉع‬. The Arabic term of "trading business" (‫ )ﺍاﻟﻤﺘﺠﺮ‬is defined in Article 34 of the Commercial Law (Decree Law (68) of 1980). 5. Borrowing. 6. Guaranteeing third party debts. 7. Non ex lege arbitration. 8. Settlement and discharge of obligations.

المادة 47

Partners who are not managers shall not interfere in management issues. However, they have the right to inspect at the company's headquarters, either by themselves or through a representative, the company’s books and documents, to obtain photocopies of the same and receive a brief statement on the company’s financial position. Any agreement to the contrary shall be null and void. Each partner shall have the right to request from the company’s manager any information relating to the company’s operations, its contracts and transactions as well as its financial position. The manager shall respond to such request within a maximum period of fifteen days as of the date on which the company has received such request.

المادة 48

Neither the manager nor any of the company’s partners may contract with the company for his own benefit or the benefit of a third party or practice an activity similar to that of the company except with the prior permission of all the partners. Such permission shall be granted by the partners for each case separately.

المادة 49

The manager shall be held responsible for any damages incurred by the Company, its partners or third parties stemming from errors in management or undertaking acts that violate the provisions of the law or the Company Contract. Any provision that states otherwise shall be null and void.

المادة 50

The company’s manager can only be dismissed by the majority required to amend the Company Contract. However, the company’s manager can be dismissed by virtue of a court judgment requested by one of the partners, if reasons exist to justify such dismissal. The dismissal of the manager and the appointment of a new one shall be Proclaimed. The dismissal of the managing partner shall not result in the dissolution of the Company unless the Company Contract states otherwise. In all cases, the membership interests of the manager to be dismissed shall not be included in the calculation of the quorum required for adopting the resolution on dismissal. If the manager’s membership interests represent half or more of the company’s capital, such manager shall only be dismissed by virtue of a court judgment.