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Doha Events 2011

Doha Events 2011

Law

Legal Corner: The importance of commercial registration

The private sector plays an important and prominent role in advancing the economic development in the Qatari society, and there are no statistics on the number of private companies, their percentage in the state, full assessment of their role and the areas of work that attract this important sector. It is certain that state-owned companies can be identified and their knowledge can be facilitated through more than one source.

There is no doubt that the data for each company, which distinguishes it from other is very important to distinguish between the companies as the companies are like the persons so they are legal bodies that enjoy a distinctive trade name. The name is approved after making sure that there is no other company with the same name. Every company has a commercial registration that contains its basic information, number of the commercial register, commercial name, date of establishment of the company, expiry date of the register, type of company, number of its branches, if any, nationality, trade mark, address of company’s headquarters, PO Box, phone number and capital of the company. The commercial register also includes the names of the partners, their nationalities and the proportion of their share in the company’s capital as well as the appointment of authorised signatories, their attributes, functional names and nationalities in addition to the reference to the commercial activities practiced by the company and finally the names of branches of the company, if any.

The commercial register and the data contained therein is a declaration from the Ministry of Business and Commerce and is a testimony that the data contained therein is correct. The company can protest any amendment or change in the data referred to in the commercial register only after pointing it in the commercial register of the company.

In order to confirm the credibility of the companies and realise the principle of transparency, and to eliminate any confusion or ambiguity, the Companies Act No. 5 of 2002 provided that the company must put its trade name and disclose the type, headquarter, registration number in the commercial register, amount of capital in all contracts, mails, quittances, declarations and other papers that can be issued by the company, and this applies to the Qatari and foreign companies.

There is no doubt that the disclosure of the data required by the law is not a matter of choice but an obligation under the law and whoever violates it shall be punished under the provisions and articles of the Commercial Companies Law No. 5/2002, as the law with respect to limited liability companies point out that it must take its name out of its activity or the name of the one or more of the partners with a mandatory addition of the words “limited liability company” to the name of the company. If the directors neglect to take this point into account they shall be responsible for the money and are jointly liable for the obligations of the company as well as the compensation.

It is clear from this provision and other provisions of the law that the responsibility for disclosure of this data and, its writing on the mails and quittances of the company, its declarations and papers that are issued by it lies with the director of the company, as the law points out that the director of the company has the full power to manage the company, unless the contract of the company limits his power. The actions of the director are binding for the company, provided that it shall be accompanied by a statement of capacity he deals with. Every decision to change the directors or to restrict their powers, shall apply to others only after its notation in the commercial register.

The law concerning the responsibility of managers of the majority of types of companies added that they are responsible, like the members of the boards of joint stock companies, as every act or transaction or a decision issued in violation of the provisions of the Companies Law No. 5/2002 shall be void, without the prejudice to the rights of others in good faith. In case of plurality to refer the cause of invalidity, they shall jointly be responsible for compensation among themselves, and every chairman of the board of directors or a board member or manager of company violates the provisions of the Companies Law No. 5/2002, shall be punished by imprisonment for a term not exceeding two years and a fine of not less than ten thousand riyals and not more than one hundred thousand riyals or either of the penalties.

It goes without saying that the commitment of the directors of the companies has positive effects including high level of confidence in the reputed and committed company,  expansion of work scope and the confidence of customers in the company because it works in the light. The commitment eliminates the virtual companies which spread recently, easily facilitates the settlement of outstanding debt and leads to the quick decision in the cases handled between companies in the courts where the time is wasted in formalities related to the address of the virtual companies. It is no longer easy to obtain a commercial registration number because of many reviewers, large number of registered companies, non-acceptance of manual inquiries, and dependence on the electronic portal to get the commercial register under the intended registration number. In the absence of a registration number it is difficult for any company to get the commercial register, but of course, it is not impossible. There is no doubt that these things are very important and it is required to comply with them for the benefit of all.

We hope that the Department of Commercial Registration will play a positive and effective role in ensuring that the companies abide to putting their data on their mails, receipts and all the papers that are issued by them at the time of annual renewal of the commercial registration or issuing annual or half yearly magazine disclosing in it the names of companies registered in the Department of Commercial Registration and the core information mentioned in the register for the reference if needed in order to achieve transparency and confidence in the registered companies.

Legal Advice: The right of prisoners in education

There is no doubt that reforming a convict and his rehabilitation to become a responsible part of the society is necessary. The same shall be done through providing him education and vocational training that helps him earn him an income, which will prevent him from committing crimes again and contribute to the security and safety in the community. Therefore, the penal institution plays its role in the best way and becomes a home to reform, refine and bring back the convict to the right path in order to make him a good individual who is useful to the society in which he lives. Therefore, the management of penal and correctional institutions at the Ministry of Interior makes an agreement with the competent authorities in education and training for the development of curricula and training for the prisoners. The institution educates the prisoners and trains them taking into account their age, willingness and the duration of their sentences. If the prisoner desires to study, he must be supplied with books which he needs and facilitated with the process of recalling. He must be allowed to perform his scheduled examinations. The administration must enable the prisoners to benefit from the various media and organise the programmes specially the seminars, educational lectures and other entertainment programs. The prisoner shall be granted a financial incentive if he could, while he was in the institution, memorise the Quran or parts of it or he presented a research or a distinct artistic work or invented a craft or profession or received a general or university or higher certificate according to the rules and procedures prescribed by the regulations for the Law of penal and reforming institutions no. 3 / 2009.

Legal Advice: Security cheque

The Trade Law no. 27 of 2006 points out that the cheque is a commercial paper that includes an order issued by the drawer to the drawee bank to pay on the day described in it as the date for issuing a certain amount of money to the third person who is the beneficiary or to the bearer.

The cheque is tool of payment that is considered as money and replaces it while paying the obligations. The role of the cheque, in any case, cannot be changed or amended for any reason, because of the seriousness of this role as in the eye of the legislature the issuance of cheque without sufficient balance is a crime regardless of the motive for issuing such a cheque. In any case no one can protest with the fact that the cheque was issued as a security as it is a tool of payment and not a tool of credit as there are other tools of credit other than the cheque which must be reliable to serve as a tool of credit. Therefore, we advise the dealers with the cheque to be cautious and use it as a tool of payment and not a tool of credit.

Rights, obligations of seconded worker

The term secondment has been mentioned in the Qatari civil law No. 22/2004. The article 670 provides that the secondment is a contract whereby the lender hands over the borrower something which is not depreciable, so he could use it without any compensation for a certain period or for a particular purpose, provided that he shall return it after the use.

While searching for this term in labour law we did not find it there. The word secondment has been mentioned in the sponsorship law no. 4/2009 on regulation of the entry and exit of expatriates, their residence and sponsorship. The article 15 stated that “it is prohibited for any natural or legal person to allow the expatriates who have been recruited for work, to work for others, or the use of workers who are not sponsored by them. The competent authority with an exception from the above can permit the sponsor to second his foreign workers to another employer to work for him for a period not exceeding six months, renewable for another similar period. The authority can permit an expatriate to work for some time with other party in his non-original working hours if his sponsor approved this in writing. In all cases the Ministry of Labor must approve the same for the categories subject to the provisions of labour law. It is prohibited to transfer the features for other or dispose in it in any way or trade it by third parties, whether the transfer or disposition or trading take place with a fee or without it.

From the review of the legal provisions it becomes clear that the system of the secondment is one of the associated rights imposed by the law of sponsorship and the basic principle is that the employer brings the workers to work on his sponsorship so that there will be a link between the work and sponsorship.

This is fact that the sponsor is the employer and the fact may result in a surplus of workers needed to work for the sponsor for various reasons while the other employers are facing the shortage of workers, therefore, the law allowed the sponsor to second some workers who have been recruited on his sponsorship for the work with another sponsor for a certain period.

The sponsorship system is a temporary system and not permanent one. The sponsorship law fixed the period of secondment with six months. This period can be extended for a similar period and during this period the sponsoring parties have to amend their situation as the sponsor shall take back his employee to work with him again or approve the transfer of his sponsorship to the employer who borrowed him or other.

The sponsorship system is as a redistribution of balance in the labor market between workers, employers and the work which connects them.

It is worth mentioning that the seconded worker shall get all rights and privileges obtained by the main employee for doing his duties and there is no discrimination in the labour law between the main worker and the seconded worker. The term of secondment has not been mentioned in the labor law in general.

Therefore, the principle is that the seconded worker shall enjoy all the rights enjoyed by his main counterpart in terms of wage, allowances and other dues as the relationship of work comes before the relationship of sponsorship in order.

The seconded worker shall have no relationship with his sponsor while the sponsor shall have right in issuing the permission to get out of the country and renewal of residence permit only during the period of secondment.

Some rights of the seconded employee may be lost due to lack of his fulfillment of the condition of the period required to get certain rights and privileges referred to by the labor law. There is no doubt that tickets are also associated with the holiday only.

With regard to the right to get the annual leave, the labor law points out that the worker who spent in the service of the employer a full year continuously deserves the paid annual leave. With regard to the right to get the end of service gratuity, the labor law indicates that in addition to any amounts owed to the worker at the end of his service the employer must pay the end of service gratuity to the worker who spent at work a full year or more, and this remuneration shall be determined by an agreement between the parties, provided that it must not less than the wage of three weeks for each year of service.

So, if we explained the absence of any reference to the seconded employee in the Qatari labour law intended not to expand in this area as it is for a temporary period destined to end and correct the situation, we must point out that the employment contract can be for a fixed term or indefinite term. The labor law has not mentioned a minimum term for the employment contract, whereas the employment contract with the term of one month or two or more can be written in a way that this contract accommodates the obligations and rights of the parties during the term of secondment and this contract shall be subject to the documentation.

If the interest of the lending sponsor and the borrowing employer established a system of secondment, the interest of the seconded employee or worker must be taken into account and we must protect the right of the employee to get his salary, allowances, vacations, end of service benefits for the period of his work and travel tickets. Everything agreed by the parties must be written in the contract of employment binding on the parties and the same must be verified by the Department of Labor. In this case we rely on what came in the labor law no. 14/2004, which pointed out the rights set forth in the labor law as the minimum rights of workers. Any condition contrary to the provisions of this law shall be null and void, even if it happened before it came into force, unless it is more beneficial for a worker and every remission or reconciliation or a waiver of worker’s rights arising under this law shall be null and void.

Legal Consultancy

Question: If an employee wants to get NOC from the employer, what are the conditions and requisites he has to fulfil. Is it the right of the employer to refuse the transfer of the employee to another sponsor, even if the employee has served the employer for several years? Does it depend on the fact that the employment contract is for a fixed term or for an indefinite period? Are there any other ways for the worker to obtain NOC without the consent of the employer if there are better job opportunities in Qatar?

Answer: It is a fact that the employer is the sponsor of the employee or worker who works for him with the exception of women as they have been allowed by law to work without requiring the transfer of sponsorship due to social considerations. The workers under the clause of secondment are also exempted from this. This exception is temporary – for a period of six months and it may be extended for similar period. This exception is related to work for other party other than the sponsor in the nonofficial working hours. This category is referred as collaborators, note that these excepted categories do their work under the law and under the work permits issued by the Department of Labor.

The NOC is a declaration from the sponsor addressed to the Ministry of the Interior and it includes the approval of the sponsor to transfer the sponsorship of the worker or the employee to another employer.

The law regulating the entry and exit of expatriates, their residence and sponsorship (4/2009) points out that the Ministry of Interior can transfer the sponsorship of a foreign worker to another employer with a written agreement between the new employer and the previous employer, after approval of the competent authority, for the categories subject to the provisions of labour law. The transfer of sponsorship shall result in replacing the former sponsor with the new sponsor in all his obligations, the expiration of sponsorship for the former sponsor and the remission of his obligations arising therefrom.

The consent of the sponsor is a prerequisite for transfer of sponsorship and this right has been prescribed for sponsor for the obligations which fall on the shoulder of the sponsor because of the sponsorship system. There is no relationship between the fact that the employment contract is for a fixed term or for an indefinite duration.

There is no doubt that the final decision in the matter of transfer of sponsorship or not depends on the concerned authority at the Ministry of Interior, where the decision is issued by the approval to transfer the sponsorship or non-approval or deportation of the foreign employee.

It is worth mentioning that the right of the sponsor in granting the sponsored employee a NOC is not an absolute right, but it is limited and linked to the non-existence of lawsuits between the parties.

The sponsorship law points out that the Minister of the Interior or his deputy can transfer the sponsorship of a foreign worker temporarily in the event of litigation between the sponsor and the foreign worker.

The Minister or his deputy can approve the transfer of sponsorship of a foreign worker to another employer in the event of proven abuse of the sponsor or if the public interest requires so. For the same reasons, at the request of the worker and the approval of the Ministry of Labour, the sponsorship of the worker, who falls under the Labor Law, can be transferred to another employer.

Question: A person working with a contracting company wanted to leave the country due to some emergency circumstances and requested the company to issue an exit permit, but the company rejected the request. Which authority should he approach in order to leave the country?

Answer: Law No. 4/2009, concerning the regulation of entry and exit of expatriates and their residences and sponsorships, states that expatriates are not permitted to leave the country temporarily and permanently without submission of exit permit by the sponsor.

This permit, if could not be obtained by the expatriate, is replaced by presenting exit warrant or a certificate indicating of no judgment under process or claim cases are filed against the expatriate to be issued by the competent courts after fifteen days of announcement in two daily newspapers for one time of the date of expatriate departure of the country in accordance with procedures and restrictions issued by the Minister of Interior.

In view of the above, the inquirer shall refer the competent department at the Ministry of Interior to present an exit warrant or to publish leave announcement in two daily newspapers for one time including full name, nationality and residence number with his intent to leave the country and the competent department and the Ministry of Interior will receive any claims against the said party within maximum period of two weeks of the date of announcement.

After the elapse of two weeks of the announcement date, the inquirer shall request the competent court to issue a certificate of no judgment under execution or claim cases against him and present it to the competent department at the Ministry of Interior in order to have the required exit permit.

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