One of the important legislations established in the State of Qatar for formation, administration and dissolution of business affairs is Commercial Companies Law No. 11 of 2015.
The law permits formation of following type of entities –
1. Joint Liability Company (A joint liability company is a company comprising of two or more natural persons, who shall be jointly liable in all their monies for the company’s obligations.).
2. Limited Partnership (A limited partnership shall comprise two categories of partners: (1)- joint partners (all natural persons – not body corporates), who shall manage the company and be jointly liable for all the liabilities of the company in their personal assets; (2)- silent partners, who contribute to the capital of the company without being responsible for the obligations of the company, except to the extent of the capital they provide to the company or what they undertook to pay to the company) .
3. Joint Venture Company (A joint venture company is a concealed company and does not apply to third parties. It does not enjoy a legal personality and is not subject to any declaration procedures).
4. Public Shareholding Company (A public shareholding company is a company with its share capital divided into equal shares capable of being traded at Qatar Stock Exchange). A shareholder shall only be liable to the extent of its contribution to the company’s capital).
5. Private Shareholding Company (A number of founders not less than five (5) may establish a private shareholding company that does not offer its shares for public subscription and they subscribe to all its shares, but the company’s capital shall not be less than two million (2,000,000) Riyals).
6. Partnership Limited by Shares (A partnership limited by shares is a company that consists of two teams, one of them involves one or more active partners jointly liable for all the debts of the company in their own money, and the other involves one or more non-active partners who shall only be liable for the debts of the company to the extent of their share in the capital).
7. Limited Liability Company : (A limited liability company is a company that consists of one or more persons and the number of partners shall not exceed fifty (50) persons. A partner will only be liable up to their share in the capital. The shares of the partners shall not be negotiable securities)
8. Holding Company: A holding company is a shareholding company or a limited liability company that financially and administratively controls a company or other companies affiliated to it by owning at least (51%) of the shares or stocks of such companies, whether they are shareholding companies or a limited liability companies.
The law, among other things, also provides for the following;
- Articles of Association/Company’s contract (requirements differ for each type of entities),
- profit sharing basis,
- non-distribution of fictious profit,
- Requirement for using company’s name, registered office and Commercial Registration number in official documents
- Role of supervision by the Ministry, Qatar Central Bank and QFMA
- Rights and duties of the Manager
- Constitution of the Board of Directors, appointment, retirement and remuneration
- General assembly meeting including Extraordinary general assembly - procedures
- Bookkeeping requirements and appointment of auditors – rights & duties
- Liquidation procedures
- Merger, Division and Acquisition of the Company
- Power of Ministry to take over the control of the Company
- Penalties and prosecution