Bahrain Commercial Companies Law 2021

By 10/03/2022No Comments

In line with Bahrain`s recent anti-money laundering initiative, the CDC has raised the threshold of proof for companies operating in the Kingdom compared to the confirmation of finances at the end of the financial year by amending Article 188, which requires that remuneration, including but not limited to, salaries, bonuses and share purchase contracts, be included. Each investment company must have a specific trade name indicating its objectives. This name may not be derived from the name of a natural person, unless the purpose of the company is to use a patent legally registered in the name of that person, or unless the company acquires a permanent establishment upon its incorporation or subsequently and adopts its name as its own. The company name must be followed wherever it appears with the addition “A Bahraini joint-stock company”. Unless otherwise provided by law, all commercial companies, with the exception of a joint venture, acquire a legal entity by registering them in the Commercial Register of Bahraini Public Investment Companies with the participation of foreign capital or experts. Subject to an order of the Minister responsible for trade matters, the percentages of participation of foreign capital or expertise in certain sectors or activities may be fixed. The total value of existing loan bonds issued by the Company may not exceed the issued and fully paid-up capital and non-distributable reserves in accordance with the balance sheet approved by the Annual General Meeting. This does not apply to loan obligations guaranteed by the State or by any of the public bodies or organizations, nor to loan obligations issued by banks and companies subject to the supervision of the Central Bank of Bahrain. A public holding company and a holding company with fixed capital in which the government or one of the public bodies holds at least 30% of the shares may borrow by issuing loan bonds subject to a resolution of the Annual General Meeting, on the recommendation of the Board of Directors, in which the credit needs of the company and the special conditions for issuing such loan bonds are subject to a resolution of the General Meeting.

ordinary on the recommendation of the Board of Directors, in which the credit needs of the company and the special conditions for issuing these loan bonds are indicated. Approval by the Central Bank of Bahrain should be obtained prior to the issuance of bonds denominated in foreign currencies or in the local currency and offered for subscription on international markets. The Annual General Meeting may authorize the Board of Directors to choose the date of issue if this is to be done within the next two years following the adoption of the resolution of the Annual General Meeting. The approval of the Ministry of Finance and Economy of the company through the issuance of loan bonds must be obtained, and the Central Bank of Bahrain is the authority responsible for issuing the authorization if the company is one of these companies subject to its supervision. However, closing set-off is not immune to all provisions of commercial or insolvency law. The distinction between legislation that should not apply to forfeiture and other laws that should continue to apply requires careful consideration of laws and regulations of a general nature, as well as restrictions specific to insolvency situations or the resolution regime. Provided that the general conditions for the actual establishment of contracts are met, the mere conclusion of a closing set-off provision should not, as a general rule, be subject to additional contractual or commercial conditions and should not trigger the application of insolvency avoidance rules. However, where eligible elements are concerned, such as fraud against other creditors, the relevant instruments of contract and insolvency law and anti-fraud remedies should continue to apply. In the case of commercial companies of all kinds, claims against the partners are time-barred after five years from the liquidation of the company or from the date on which one of the partners leaves the company in respect of claims against the partner. This limitation period begins to run from the day on which the company is fully registered in the commercial register in all cases where registration is required, and from the date of registration of the completion of the liquidation in cases arising from the liquidation itself. A partnership is a partnership formed between two or more persons under a specific name and in which the partners assume joint responsibility for the obligations of the partnership to the extent of all their resources. However, without prejudice to the applicable legislation governing the exercise of independent professions, collective bargaining companies of any kind may be established between Bahraini or non-Bahraini partners in accordance with the conditions and requirements imposed by an order of the competent Minister of Commerce.

Jouissance shares may be issued only by companies whose articles of association provide for the depreciation of shares before the end of their term, because the company`s commercial activities are linked to the exploitation of one of the natural resources or a public service granted to it within a limited period; or to a form of exploitation of everything that is depreciated during use or expires after a certain period of time. In recent years, the United Arab Emirates` (“UAE”) regulation for business regulation has changed significantly. The pace of change continues to accelerate with a sweeping legal reform program launched in 2021 to celebrate the 50th anniversary of the uae`s founding. A new Companies Act set out in Federal Legislative Decree No. 32 of 2021 on Commercial Companies (“CCL 2021”) is among the latest developments that local companies that have established onshore companies in the UAE need to understand whose management, shareholders and potential investors need to understand. The former Companies Act, which was only introduced in 2015 and was included in Federal Law No. 2 of 2015 in its current version (“CCL 2015”), has been repealed and replaced by the CCL 2021 with effect from 2 January 2022. While the new corporate law regime makes somewhat conservative adjustments to the corporate law regime of the CCA 2015 and largely consolidates some recent changes and regulations made under the CCA 2015, some new provisions have the potential to bring transformative changes to the structuring of certain types of transactions in the UAE. Management authorities must be well informed and prepared to ensure that they meet the requirements of the CCA 2021 and, where appropriate, that they can take advantage of the opportunities offered by the new regime.

The UAE government has already carried out an impressive series of legal reforms in recent years. Groundbreaking reforms have lifted restrictions on foreign investment regimes and allowed foreign investors to fully own local businesses subject to federal restrictions to protect strategic sectors (read more…), modernized listing regulations, introduced more robust corporate governance frameworks, and addressed a range of other issues for businesses, including security, bankruptcy and corporate bailouts. From a holistic perspective, these reforms promise to boost investor confidence in the UAE`s business environment, which is one of the most advanced in the Middle East region. The new law adds Article 21 bis) to the Law on Commercial Companies, which allows the Minister of Industry and Trade to take decisions setting minimum capital requirements for certain forms of enterprise. Although the new law does not repeal the existing right of the founder(s) of a company to determine the capital of the company, amendments have been made to articles 109, 228, 249 (e), 264 and 293, so that this right is now subject to the provision of article 21 bis. In this guide, we look at the main provisions of the CDC 2021 that UAE companies and their directors, shareholders and potential investors need to be aware of. Click the Download button below to access the full guide. We would be happy to discuss any of these topics with you. Under Article 6 of the CCL, the instrument of incorporation of a company may now be drawn up in English or Arabic, with the exception of companies in the joint venture. Under the current provisions of article 6, although two texts (Arabic and English) are authorized and exist for the purposes of sketching out a company`s memorandum, only the Arabic version is notarized and therefore constitutes the predominant text. This comes with a difficulty for non-Arabic speakers, as a certain degree of caution is required when translating the articles of association, so the change increases the certainty of confidence in the English version of a company`s articles of association. A similar problem is that the Central Bank of Bahrain (CBB) now has authority over listed companies.

In accordance with the amendment of Article 119 of the Commercial Companies Act by the new Law, the trading of shares, registration, deposit, transfer of ownership, clearing, settlement and pledge, seizure or purchase of own shares by a company must now be carried out in accordance with the provisions of the CBB Act 2006 (CBB Act).