Legal corner: Procedures for establishing joint-liability companies Thursday, 05 May 2011 03:50

The Commercial Companies Law No. (5) for the year 2002 points out that the commercial company is a contract that binds two or more persons to contribute to a project that aims to make profit, by offering a share of money or work and division which results in profit or loss from the project and each company will be incorporated in Qatar and will have Qatari nationals as main sponsors and will be headquartered in Qatar.

 The company incorporated in the State must take one of the forms referred to in the commercial companies Law No. 5/2002 and the company that doesn’t adopt one of those forms will be invalid as well as the persons who contracted on its behalf will be responsible personally and jointly liable for the obligations arising from this contract.

The joint-liability company consists of two or more natural persons who will be responsible jointly in their money for the operations of the company.

The name of the joint-liability company consists of the names of all partners. The name of the company can be limited to the name of a partner or more with addition of the word “and partners” and it is permissible that the company has a special commercial name provided that it is associated with what proves that it is a joint-liability company.

All the partners in the joint-liability company must be natural people.

The contract of the joint-liability company must be written and signed and include in particular the following data:

1. Company’s name, its objective, head office and branch if any.

2. The name of each partner, occupation, title, fame, if any, nationality, date of birth and domicile.

3. The capital of company and share that each partner abides to offer it in cash whether it was a cash or right with other, the estimated value of these shares, mode of payment and its maturity date.

4. Date of incorporation of company and its duration.

5. The manner of the management of the company with the names of people who may sign on behalf of the company and the extent of their powers.

6. The start and the end of the fiscal year of the company.

7. The way of distribution of profit and losses.

The partners may make a written system of the company that includes the detailed provisions agreed by them to manage the company and a copy of it will be attached with the contract of the company.

The contract of the company and all amendments will be mentioned in the commercial register as the summery of the memorandum of association and all amendments made in it will be published in any local newspaper issued in Arabic language at the expense of the company.

No complaint will be made against the others about the presence of the company except from the time of completion of the procedures of registration and publication. The non-completion of these procedures will result in the non-acceptance of the claims that the company brings against the others and despite that it is permissible for the others to stick to the presence of the company even if the procedures of its registration and publication have not been completed.

A partner in the joint-liability company will acquire the name of a trader and will perform the trade in the name of the company and the bankruptcy of the company will result in the bankruptcy of all partners.

The partners’ shares in a joint-liability company will not be represented in the negotiable instruments.

It’s not permissible to concede the shares in the joint-liability company except with the approval of all partners.

The creditors of the company have the right of recourse in its funds, and they have also the right of recourse against any partner in his own funds.

All partners are jointly committed towards the creditors of the company.

It’s not permissible to execute the partner’s funds because of the company’s obligation except after getting a final judgment in the confrontation of the company and its warning for the fulfillment, and its abstention from the fulfillment at the right time and the judgment issued on the company will be an argument against the partner.

The partner without the approval of other partners cannot perform for his account or other’s account any activity that matches with the activity of the company or becomes a partner in other competitive company. If one of the partners violated that, then the company can demand from him the compensation and the activities that he exercised for his own account will be transferred into company’s account.

If a partner who joined the company will be responsible with the solidarity with the rest of the partners in all his funds about the previous and following company debts for his joining and every agreement between the partners contrary to that will not be a proof against the other.