Kuwait

Companies
25
Kuwait Decree-Law No. 25/2012
Issued on 26/11/2012
Corresponding to 12 Muharram 1434 H
Kuwaiti Commercial Companies Law
Abrogating
Kuwait Law No. 15/1960,
After Perusal of the Constitution,
Kuwait Decree No. 3/1955 on Kuwait Income Tax, and its amending Laws;
Kuwait Decree No. 1/1959 on the Commercial Register, and its amending Laws,
Kuwait Decree-Law No. 5/1959 on the Real Estate Registration, and its amending Laws,
Commercial Companies Law promulgated by Kuwait Law No. 15/1960, and it amending
Laws,
Penal Code promulgated by Kuwait Law No. 16/1960, and its amending Laws,
Criminal procedures and Trials Law promulgated by Kuwait Law No. 17/1960, and its
amending Laws,
Kuwait Law No. 4/1961 promulgating the Authentication Law amended by Kuwait Law
No. 1/1965,
Law on Insurance Companies and Agents promulgated by Kuwait Law No. 24/1961, and
its amending Laws,
Kuwait Law No. 30/1964 on the Establishment of the State Audit Institution, and its
amending Laws,
Kuwait Law No. 37/1964 concerning Public Tenders, and its amending Laws,
Kuwait Law No. 49/1966 on Lending Kuwaiti Joint Stock Companies,
Kuwait Law No. 32/1968 concerning Currency, the Central Bank of Kuwait and the
Organization of Banking Business, and its amending Laws,
Kuwait Law No. 32/1969 Regulating Licenses for Commercial Shops, and its amending
Laws,
Kuwait Decree-Law No. 31/1978 concerning the Rules of Preparing the General Budgets,
Controlling the Implementation thereof and the Balance Sheet, and its amending Laws,
Civil and Commercial Procedure Law promulgated by Kuwait Decree-Law No. 38/1980,
and its amending Laws,
Kuwait Decree-Law No. 39/1980 concerning Evidence in the Civil and Commercial
Matters, and its amending Laws,
Civil Law promulgated by Kuwait Law No. 67/1980, and its amending Laws,
Commercial Law promulgated by Decree-Law No. 68/1980, and its amending Laws,
Kuwait Decree-Law No. 5/1981 concerning The Practice of the Auditing Profession, and
its amending Laws,
Kuwait Decree-Law No. 20/1981 on the Establishment of a Chamber in the Full
Jurisdiction Court to examine the Administrative Disputes, amended by Kuwait Law No.
61/1982,
Kuwait Law No. 42/1984 on the Disposition and Exchange of Shares and Securities of the
Joint Stock Companies,
Kuwait Decree-Law No. 33/1988 on Allowing GCC Nationals to Own Shares in the
Kuwaiti Joint Stock Companies,
Kuwait Decree-Law No. 23/1990 on the Organization of the Judiciary, and its amending
Laws,
Kuwait Decree-Law No. 31/1990 Regulating the Securities Exchange and the
Establishment of Investment Funds,

Kuwait Law No. 12/1998 on Licensing the Establishment of Leasing and Investment
Companies,
Kuwait Decree-Law No. 5/1999 on Intellectual Properties Rights,
Kuwait Law No. 19/2000 on the Support of National Labor and Encourage the
Employment thereof in Non-Governmental Sector,
Kuwait Law No. 20/2000 on Allowing Non-Kuwaitis to Own Shares in Kuwaiti Joint
Stock Companies,
Kuwait Law No. 8/2001 Regulating the Direct Investment of Foreign Capitals in the State
of Kuwait,
Kuwait Law No. 46/2006 concerning Zakat and Contribution of Public and Closed Joint
Stock Companies in the States Budget,
Kuwait Law No. 7/2008 Regulating Build, Operate and Transfer (BOT) and similar
systems and Amending Some Provisions of Kuwait Decree-Law No. 105/1980 concerning
State-owned Properties,
Kuwait Decree-Law No. 2/2009 concerning the Enhancement of the Financial Stability in
the State.
Kuwait Law No. 6/2010 on Labor in the Private Sector,
Kuwait Law No. 7/2010 on the Establishment of the Capital Market Authority and
Regulation of Securities Exchange Activity,
Kuwait Law No. 9/2010 Issuing the Development Plan of the State for 2011-2012/20132014,
Kuwait Law No. 37/2010 Regulating Privatization Programs and Operations; and
Based on the proposal of the Minister of Commerce and Industry; and
After the approval of the Council of Ministers,
We have issued the following Decree-Law:
Article 1
The provisions of the enclosed Companies Law shall be implemented and applied on
companies established in the State of Kuwait or seated therein.
Commercial custom rules shall apply for all that is not specifically provided for in this Law
or in any other commercial laws.
Article 2
Companies existing at the time of this Law shall adjust their conditions according to its
provisions during six months from its commencement date in conformity with the provisions
set forth in the Implementing Regulation.
Article 3
The Minister of Commerce and Industry shall issue the Implementing Regulation of this
Law as well as the decisions necessary for its implementation. The regulations and decisions
which are currently in force shall remain valid to the extent they are not in contradiction with
the provisions of this Law, until they are amended or abrogated.
Article 4
The aforementioned Commercial Companies Law shall be abrogated as well as any
provision in conflict with the provisions of this Law.
Article 5
Ministers shall, each within his own competency, implement this Decree-Law which shall
enter into force from the date of its publication in the Official Gazette and shall be submitted
to the National Assembly.
Issued in Seif Palace
On 26/11/2012 AD.
Corresponding to 12 Moharram 1434 AH.
Prince of Kuwait
Sabah Al-Ahmad Al-Jaber Al-Sabah

Prime Minister
Jaber Al-Mubarak Al-Hamad Al-Sabah
Minister of Commerce and Industry
Anas Khalid Al-Saleh
The present Decree-Law was published in the Official Gazette, issue no. 1107.

Book 1
General Provisions
Definitions
Article 1
In the application of the provisions hereof, the following words and terms shall have their
corresponding meaning:
Announcement: The publication in two Arabic local dailies issued in Arabic and the
website of the company, if any.
Publication: The publication in the Official Gazette (Al-Kuwait Al-Yawm).
Registration: The registration in the Commercial Register.
Declaration: Registration and publication in the Official Gazette.
Authority: The Capital Market Authority.
Ministry: The Ministry of Commerce and Industry.
Minister: The Minister of Commerce and Industry.
Control Authorities: The Ministry, the Authority and the Central Bank of Kuwait
concerning the companies subjected to any of them or the other bodies specified by the Law.
Founder: Whoever participates effectively in the incorporation of the company, signs its
Articles of Association by himself or through his representative, and contributes, in cash or in
kind, in its capital.
Memorandum of the Company: the Companys articles of association or the articles of
association with the Statute, if available.
Article 2
The provisions set forth in this Book shall apply to all the companies while taking into
consideration the provisions related to each of the companies forms stipulated herein.
Article 3
The company shall be established by virtue of a memorandum whereby two or more
persons shall contribute in a project aiming at achieving profits, by providing a share of funds
or work, in order to share the profit or loss resulting from said project.
The company may be in the instances stipulated by the Law established by the free will
of one person.
Also, companies whose primary purpose is not to make a profit may be established. The
Implementing Regulation shall organize the provisions governing such companies, provided
that the company shall take one of the forms provided for in Article 4 as appropriate for its
nature.
Article 4
The company shall take one of the following forms:
1- Joint Liability Company.
2- Limited Partnership Company.
3- Equities Partnership Company.
4- Particular Partnership Company.
5- Joint Stock Company.

6- Limited Liability Company.

7- Single Person Company.
Any agreement which has not taken any of the forms stated in the previous Paragraph, the
persons who concluded the same shall be jointly and severally responsible for the obligations
resulting from said agreement.
Article 5
Except for the Particular Partnership Company, the approval of the Ministry is needed on
the establishment and objectives of the company, according to the provisions of this Law and
its Implementing Regulation.
The Implementing Regulation shall organize the procedures of the companys
establishment and the issuance of the licenses needed to practice its business activity in a
manner that guarantees the completion of all these procedures through a special
administration at the Ministry including the representatives of the concerned governmental
authorities.
Article 6
The approval of the control authorities and other bodies shall be obtained concerning the
establishment of the companies subjected to their control as well as for their articles of
associations and statutes.
Article 7
Except for the Particular Partnership Company, the Memorandum of the Company shall be
written in an official authenticated document, or else it shall be considered as void and null.
The partners may plead the nullity arising from the failure to write the Memorandum of the
Company as set forth in the previous Paragraph, against each others. However, they are not
entitled to use the same to confront any third party who may plead nullity against them. If the
Memorandum of the Company was deemed null and void at the request of others, the
company shall be considered as if it has never existed. But, if the Memorandum of the
Company was deemed invalid at the request of one of the partners, the invalidity shall not
have any effect regarding such partner except from the date of filing the claim.
Article 8
The founders of the company or the partners therein as the case may be shall be jointly
liable for compensating the damage caused to the company, the partners or others due to the
nullity of the Memorandum of the Company.
Article 9
Except for the Particular Partnership Company, the Memorandum of the Company shall be
declared altogether with any amendments introduced thereto, according to the provisions
hereof. If the Memorandum is not declared as indicated, it shall be considered as ineffective
against third parties. Should this non-declaration be limited to one or more data to be
declared, such particular data shall alone be considered as ineffective against third parties.
However, the bona fide third parties shall have the right to uphold the existence of the
company or the amendments that may be introduced to its Memorandum, even if the
declaration procedures are not completed.
The directors of the company or the members of its board shall be jointly liable for
compensating the damage caused to the company, partners or bona fide third parties due to
the non-declaration.
Article 10
The Memorandum of a Joint Stock Company in both its forms shall include the Articles of
Association and Statute. As for the other kinds of companies - except for the Particular
Partnership Company - they shall have articles of association and the partners may draw up
the statute of the company. The statute of the company, if available, shall be considered as
part of the Memorandum of the Company.
The Implementing Regulation shall show the standard form of the Articles of Association
and the Statute for the companies set forth in this Law. The form shall include all the data and

conditions required by the Law and the Implementing Regulation, as well as the terms which
may not be agreed otherwise by the partners and founders. The partners may add the terms
they deem in conformity with the compelling provisions of the Law and its Implementing
Regulation.
Article 11
Should the capital include, upon the establishment of the company or when increasing its
capital, shares in kind, such shares shall be evaluated by one of the auditing offices accredited
by the Authority, according to the principles and controls provided for in the Implementing
Regulation for the evaluation of the same.
The share evaluation shall not be considered as final unless approved by the partners or the
constituent assembly or the General Assembly, as the case may be. The provider of in-kind
shares shall not have the right to vote with respect to the evaluation ratification, even if he
was a shareholder or owner of cash shares.
If it becomes clear that the evaluation of the shares in kind is less by one-tenth than the
value for which it was submitted, the company shall decrease the capital equivalently to this
shortage and the provider of the share in kind may settle this difference in cash and may quit
subscription in the share in kind.
In all cases, the shares in kind shall not represent but fully paid stocks or equities.
Article 12
The company shall not bear the name of any other company or even a similar name of a
company exercising the same activity, unless such name is for a company under liquidation
and the latter approves it.
The company claiming that another company has taken its name or a similar one, shall
submit an application to the Ministry requesting the company to change such name. The
Ministry shall decide on this application during 60 days from its submission date, or else it
will be considered as rejected.
The Implementing Regulation shall state the terms to be met in the application and the
documents which shall be attached thereto.
Article 13
The company may change its name through the procedures needed to amend the
Memorandum of the Company and the declaration procedures shall be completed for the new
name.
The change of the companys name shall not affect any of its rights or obligations, nor the
legal actions taken by the company or by others against it.
Article 14
The company shall have one particular objective or more and it shall abide by the objective
stated in its Memorandum. However, the company may exercise activities which are similar,
complementary, necessary or related to its objectives.
The company may modify its objectives even if such act led to the change of its activity,
provided that the modification procedures are completed according to the Law.
Special purpose companies may be established to issue instruments and exercise other
securitization operations, or for any other objective. The Implementing Regulation shall set
forth the controls and provisions applicable in this regard.
Article 15
Without prejudice to the provisions of said Kuwait Law No. 7/2010 regarding the persons
authorized to work according to the provisions of the Islamic Sharia, the companies which are
not subject to the control of the Authority and carrying out its objectives according to the
provisions of the Islamic Sharia, shall abide in all its acts by the Sharia rules and form an
independent Sharia Supervisory Board overseeing the activities of the company and
consisting of three members at least, appointed by the General Assembly of the company or
meeting of the partners. In this case, the Memorandum of the Company shall mention the
existence of such board and the way it was formed as well as its competencies and its way of
practicing business. Should a dispute arise between members of the Sharia Supervisory Board

on the Islamic ruling, the company may refer such dispute to the Fatwa Authority at the
Ministry of Awqaf and Islamic Affairs, considered as the last reference in this regard.
The Sharia Supervisory Board shall submit an annual report to the General Assembly of
the company or the meeting of the partners, including its point of view on the extent the
business of the company is in compliance with the Islamic Sharia rules as well as any likely
remarks. Such report shall be submitted within the annual report of the company.
In all cases, should the act be within the scope of the companys objectives and in
accordance with the contracts forms consistent with the Islamic Sharia, provisions of Articles
508, 992, 1041 of the Civil Law and Article 237 of the Commercial Law shall not be applied.
Article 16
The company shall be established for the period agreed upon by the founders in the
Memorandum of the Company. This period may be extended before its expiry by a decision
issued by the General Assembly of the partners or the shareholders owning more than half of
the shares and the capital equities.
If the extension decision is not issued, and the company continues to practice its business,
the term of the company shall be automatically extended, every time, for a period similar to
the period agreed upon in the Memorandum and in the same conditions set forth therein. The
partner who desires to quit the company after the expiry of its term shall be allowed to
withdraw from the company. In this case, his rights shall be based on the first Paragraph of
Article 11 hereof.
Article 17
The share of the partner may be a specific amount of money, an in-kind share or an activity
serving the objectives of the company. The share of the partner shall not be limited to his
reputation, power or financial trust. The cash and in-kind shares shall alone constitute the
capital of the company.
The shares of the partners shall be of equal value and shall be submitted on the basis of the
assets ownership not only the usufruct thereof, if there is no agreement or custom to the
contrary.
Article 18
The profit and loss shall be distributed among all the partners proportionately to the shares
owned by each of them in the capital according to the following rules:
1- Should the Memorandum of the Company fail to state the share of each of the partners
in the loss and profit, the share of each one of them shall be proportionate to his share
in the capital.
2- Should the Memorandum of the Company include a condition depriving one of the
partners of the companys profit or exempting him from committing to its loss, such
condition shall be deemed null and void while the Memorandum remains valid.
3- Should the Memorandum of the Company be limited to fixing the partners share in the
profit only, his share in the loss shall be equivalent to his share in the profit. Same shall
apply if the Memorandum has fixed the partners share in the loss only.
Any condition granting the partner the right of obtaining a fixed interest for his share in the
company shall be deemed null and void.
Article 19
Should the share of the partner be limited to his work and the Memorandum of the
Company fail to specify his share in the profit or loss, he may request to evaluate his work
and such evaluation shall be considered as the basis to specify his share in the profit or loss,
according to the foregoing controls.
However, it may be agreed to exempt the partner who didnt contribute but through his
work from participating in the loss, provided that he is not receiving remuneration in return of
such work.
If the partner offers, apart from his work, a cash or in-kind share, he shall earn one share in
the profit or loss for his share in work as well as in his cash or in- kind share.
Article 20

Fictitious profits shall not be distributed; otherwise the creditors of the company may
demand each partner and each beneficiary to refund what he has received from them, even if a
bona fide party. The director of the company or the Board of Directors, who recommended
the allocation of the fictitious profits, shall be jointly liable for returning such profits.
The partner shall not be compelled to reimburse the real profits earned by him even if the
company endures losses in the next years.
Article 21
The company shall commit to the business acts and conducts carried out by its director or
its Board of Directors in its name and for its account, if the same falls under the scope of the
companys objectives even if they exceeded the restrictions imposed on the directors or
Board of Directors powers in the Memorandum of the Company, unless the company proves
that the beneficiary was aware or could have known at the time of the business act or conduct
of said restrictions.
The company shall not have the right to uphold its lack of liability for the business acts or
conducts stated in the previous Paragraph before bona fide third parties based on the fact that
the director or the Board of Directors was designated contrary to the provisions of law or the
Memorandum of the Company, unless the company proves that the beneficiary was aware or
could have known at the time of the business act or conduct of said violation.
The companys director and Board of Directors shall show a keen sense in exercising their
powers and competencies.
Article 22
All the correspondences and clearances as well as other papers issued by the company,
shall bear its name, an indication to its form and its registration number in the commercial
register.
Except for the Joint Liability, Limited Partnership and Equities Partnership companies, the
above information may be added altogether with details on the capital amount and the paid up
amount.
If the company is under liquidation, such matter shall be mentioned in the papers issued by
the same.
The legal representative of the company shall be considered, when violating the provision
of the Article herein, as jointly liable with the company for the damage sustained by bona fide
third parties due to this violation, should the inadequacy of the companys assets to
compensate such parties for the damage incurred by them because of this violation be proved.
Article 23
Except for the Particular Partnership Company, the company shall enjoy the corporate
personality from the registration date. Each company incorporated inside the State of Kuwait
shall bear the Kuwaiti nationality and shall adopt an address in the State whose details shall
be registered in the commercial register. The address shall be the one used for the
correspondences and judicial notifications sent to the company, and such address change shall
not be adopted unless recorded in the register.
Article 24
The company may exercise its business activity only following the declaration and after
obtaining the licenses and approvals needed from the Control Authorities to carry out the
activity.
Activity 25
The contracts and conducts carried out by the founders in the name of the company under
establishment, shall apply to said company following the establishment completion should
they be necessary to such establishment. The company shall bear all the expenses incurred.
Article 26
No conduct carried out between the company under establishment and the founders shall
apply to the company following its establishment, and that, if such conduct was not approved

by the constituent assembly of the company in a meeting where the interested founders have
no countable votes.
In all cases, the interested founder shall submit a report on the data and information related
to such conduct in the headquarters of the company seven days prior to holding the assembly.
All the shareholders shall have the right to view such report and that shall be mentioned in the
invitation for the assembly meeting.
Article 27
Notwithstanding the rules of the criminal liability, the founder shall commit during the
establishment of the company to show a keen sense at this point in his transactions made in
the name and for the account of the company. The founders shall jointly be held liable for any
obligations or damage which may be caused to the company or others because of their neglect
or the violation of such commitment.
Should the founder receive any money or information belonging to the company under
establishment, he shall reimburse such money to the company as well as any profits earned by
him as a result of using such money or information.
The founders shall be jointly liable for their obligations.
Article 28
In all the companies, the claims filed by the companys creditors against the partners shall
not be heard, upon denial, after the lapse of five years from the termination of the company or
as of the partner exits said company with respect to the claims filed against such partner.
Should the debt be proven to the company during the presence of the partner therein and
became due after his exit from said company, the period shall start in this case from the
maturity date.
Taking into account the provisions of the last Paragraph, the time limitation for the claim
hearing rejection shall enter into force from the date of the declaration completion in all the
cases where declaration is an obligation.
Article 29
If it was decided that the Memorandum of the Company shall be terminated, the company
shall be considered as de facto and the conditions of the Memorandum shall be respected for
its liquidation and for settling the rights of the partners before each others. The invalidity of
the Memorandum of the Company shall not result in the nullity of the companys conducts
during the period preceding the date of issuance of the invalidity final judgment, unless such
conducts were null and void for any other reason.
Article 30
The founders, shareholders or partners may during the period preceding or following the
establishment conclude an agreement regulating the relationship between them. The said
agreement shall not stipulate a condition for the exemption of all or some of the founders
from the liability emerging from the establishment of the company. No conditions may be
included also in the agreement to be applied on the company unless the approval of such
conditions was issued by the competent authority therein, and should such conditions be in
conflict with the compelling provisions hereof.
Article 31
The Memorandum of the Company shall be kept in the companys headquarters and
website, if available. Every person may receive a true copy of this Memorandum in return of
suitable fees fixed by the company.
Article 32
Every interested person may view at the Ministry the Memorandum of the Company and
the minutes of the meetings of its General Assembly as well as other information and
documents kept therein concerning the company, and obtain a true copy thereof in return of a
fee fixed by the Ministry.

Book 2
Joint Liability Company
Chapter 1
Preliminary Provisions
Article 33
The Joint Liability Company consists of two persons or more and operates under a specific
name where the partners shall be severally and jointly liable in all their assets for the
obligations of the company. Any agreement to the contrary shall be null and void.
Article 34
Every partner in the Joint Liability Company shall acquire the capacity of the merchant. All
the partners shall be Kuwaitis and shall be deemed responsible for conducting the trade
business under the name of said company. The bankruptcy of the company shall lead to the
bankruptcy of all the partners therein. However, acquiring the capacity of the merchant shall
not compel the partner to commit to merchants obligations, unless he runs other trade
businesses requiring so.
Article 35
The company name shall be composed of the names of all partners or the name of one or
more partners with the addition of the term (and his partners or their partners). The name of
the company shall be complying with its existing entity as well as the reality and shall be
appended to the term (Joint Liability Company).
The company name shall not include the name of a person who is not a partner therein.
Should the name of a non-partner be included with his knowledge, he shall be individually
and jointly responsible for the obligations of the company before bona fide third parties.
Without prejudice to the provision of the last Paragraph, the company may keep in its name
the name of a partner who has withdrawn from the partnership or passed away, and that, if the
withdrawn partner or the heirs of the deceased partner agree so.
Article 36
The Joint Liability Company shall not have the right to borrow money by issuing bonds or
obtain funding by issuing instruments through public subscription.
Article 37
The capital of the company shall be sufficient to achieve its objectives. The Implementing
Regulation shall specify the minimum capital of the company which shall be divided into
undividable shares of equal value.
Chapter 2
Establishment Terms
Article 38
The Memorandum of the Joint Liability Company shall include the following data:
1- The address of the company and its trade name if any.
2- The headquarters of the company.
3- The objective of the company.
4- The term of the company, if any.
5- The names, titles and addresses of the partners.
6- The manner to run the company, the persons responsible for the management and their
powers.
7- The capital amount of the company, the share of each partner therein and a statement
of the submitted shares in kind as well as their nature and the value thereof.

8- The provisions related to the allocation of profits and losses between partners.
9- Fiscal year of the company.
10- Provisions of the liquidation of the company and division of its assets.
The partners may add other data.
Chapter 3
Shares of the Partners
Article 39
The shares of partners in a Joint Liability Company may not be in the form of negotiable
securities.
Article 40
The partner may cede his share in the company for the rest of the partners but he shall not
have the right to cede the same for non-partners in the company unless the Memorandum of
the Company stipulates so. This assignment shall not take effect before others unless the
registration procedures are completed.
Article 41
The partner may cede the financial rights related to his share in the company and such
assignment shall be governed by the transfer of rights provisions.
Article 42
The partner may mortgage his share in the company. The mortgage shall be established in
writing and shall take effect in confronting the company and others only from the date of
registering the mortgage in the commercial register.
Article 43
Should the creditor of a partner proceed with the execution procedures against the share of
his debtor, he may agree with the debtor and the company on the sale process and terms. In
this case, the shares shall be ceded according to the provisions set forth in Article 40 hereof.
Should no agreement be made regarding the method of sale during fifteen days from the
date of laying the attachment on the share, the latter shall be offered for sale in public auction
according to the procedures prescribed in the Civil and Commercial Procedure Law. The base
price shall be fixed after evaluating the share according to the first paragraph of Article 11
hereof. Except for the partner owning the attached share, the sales judge shall give the
partners three days to express their opposition regarding the accession of the best bidder to the
company. If no opposition is submitted during the aforementioned period and a judgment is
issued for knocking down the auction, the Memorandum of the Company shall be amended
according to the auction knock-down judgment and such amendment shall not be valid before
others unless the registration procedures are completed.
The company or any of the partners may even before the issuance of the auction knockdown judgment settle the debt of the partner to the creditor laying the attachment. The
company may also, during the aforementioned period, recover an amount of the distressed
shares to the extent deemed sufficient to fulfill the debt of the creditor in favor of all or some
of the partners.
Should any of the partners express an opposition regarding the accession of the successful
bidder to the company and the latter fails to settle the debt of the creditor laying the
attachment or to recover the shares according to the provisions of the last Paragraph, the sales
judge shall issue a judgment to dissolve and liquidate the company as well as appoint a
liquidator.
The judgment issued in this regard may not be appealed according to the Law.
Chapter 4
Administration Rights and Obligations

Article 44
One director or more from among the partners may take charge of managing the company.
The Memorandum of the Company shall determine the method of appointment and dismissal
as well as the extent of his powers.
Should the directors be multiple and the Memorandum of the Company did not set forth a
particular judgment, the decisions shall be issued by the absolute majority. In case of a tie, the
directors shall present this matter before the partners to decide thereon and the approval on
the same shall be by the majority of the partners.
Article 45
If no director was appointed for the company and the Memorandum of the Company did
not stipulate that the management of the company shall be the responsibility of the partners
collectively, every partner shall have the power of management as well as the right to object
to any activity carried out by another partner before its execution. In this case, the matter shall
be presented before the partners to decide thereon and the approval on the same shall be by
the majority of the partners.
Article 46
The director shall not carry out the acts which exceed ordinary management, except with
the approval of all the partners or by virtue of an express provision in the Memorandum of the
Company. Such prohibition applies in particular to the following acts:
1- Donations.
2- Sale of the companys properties, unless disposal thereof falls under the objectives of
the company.
3- Mortgage of the companys assets.
4- Sale or mortgage of the business premises.
5- Borrowing.
6- Guarantying the debts of others.
7- Amicable arbitration.
8- Conciliation and discharge.
Article 47
Non-managing partners shall not have the right to interfere in the administration works,
although they may view, by themselves or through delegate in the headquarters of the
company, the ledgers and documents of said company, photocopy the same and extract a brief
statement of the companys financial standing. Any agreement to the contrary shall be null
and void.
Every partner shall have the right to ask the director of the company to provide him with
any information related to the companys conduct of business or the contracts and conducts
concluded therewith, or to its financial standing. The director of the company shall commit to
ensure such information during the period of fifteen days as from the date of receipt of such
request.
Article 48
It shall not be allowed that the director of the company or any of the partners therein
contract with the company for his own account or for the account of others, or exercise any of
the companys activities before obtaining a prior authorization from all the partners issued on
a case by case basis.
Article 49
The director shall be responsible for the damage incurred by the company or partners or
others due to his mistakes in the administration or because of committing acts contrary to the
rule of law or the Memorandum of the Company. Every provision to the contrary shall be null
and void.
Article 50

The director of the company shall not be dismissed unless with the majority required to
amend the Memorandum of the Company. However, any director may be dismissed by a
court decision upon the request of any of the partners should there be reasons justifying the
dismissal. The dismissal of the director and appointment of the new director shall be declared.
Furthermore, the dismissal of the managing director shall not result in the dissolution of the
company, unless otherwise stipulated in the Memorandum of the Company.
In all cases, the shares of the director to be dismissed shall not be included in the quorum
needed to take the dismissal decision. Should the shares of the director represent half of the
companys capital or more, he may not be dismissed unless by a court decision.
Article 51
The meeting of the partners shall be convened at the invitation of the companys director or
based upon the request of the partners who meet the quorum needed to take the decision to be
included in the agenda. The invitation shall be sent at least fifteen days before the date set for
the meeting, by registered letter with acknowledgment of receipt, while sending a copy of the
invitation to the partner by email or fax according to the data available at the company. The
invitation may be hand-delivered two working days prior the date set for the meeting,
provided that a copy of the invitation shall be marked by a confirmation of receipt. The
Ministry may send the invitation for the meeting should the director of the company refrain
from holding the same.
The meeting shall be considered as valid when attended by the partners constituting the
quorum required to take the decision. The decisions shall be issued by majority of the partners
owning more of half of the capital.
Chapter 5
Amendment of the Memorandum of the Company, Obligations of the Partners and the
Rights of the Creditors
Article 52
The Memorandum of the Company may not be amended, unless by a decision issued in the
partners meeting by the numerical majority of the partners who own three quarters of the
capital. The amendment shall enter into force upon its registration.
The partner who objected to the amendment of the Memorandum shall have the right to
abandon the company. In this case, his rights shall be evaluated by the company with the
consent of the majority of the rest of the partners. Should he refuse so, his rights shall be
evaluated according to the first paragraph of Article 11 hereof.
Article 53
The creditors of the company shall be entitled to claim their rights from the companys
funds. They are also entitled to claim their rights from any partners own funds. All the
partners shall be jointly liable towards the creditors of the company. The execution against the
private funds of the partner shall not be allowed except after warning the company of paying
the debt and following the lapse of fifteen days without any settlement.
Should any partner settle a debt for the company, he is entitled to claim the settled amount
from said company or other partners, each according to his share in the debt.
Should any of the partners have personal creditors, the creditors of the company may
compete with them to claim their rights from the partners own funds.
Article 54
Should a new partner join the company, he shall be liable altogether with the other
partners, in all his assets, for the obligations sustained by the company following his
accession thereto. Should a partner withdraw from the company, assign his share, his share be
recovered or sold at a forced sale, he shall remain liable for the obligations of the company
which arose before registering his withdrawal, assignment of his share, recovery or sale of his
share. However, he shall not be held liable for the obligations of the company arising after
said date.

Article 55
Without prejudice to the rights of the companys creditors, a partner in a Joint Liability
Company may be dismissed by a court decision upon the request of another one partner or
more owning at least twenty five percent of the capital shares, based on reasons that justify
the dismissal, provided that the company persists between the remaining partners.
Included in the reasons justifying the dismissal are the partners acts which are considered
as a justification to dissolve the company, or the partners disposal of all or some of his funds
with the intent to harm other partners.
The share of the dismissed partner shall be evaluated according to the first paragraph of
Article 11 hereof.

Book 3
Limited Partnership Company
Article 56
The Limited Partnership Company shall consist of two categories of partners, as follows:
1- The joint partners who are collectively liable for all the companys obligations in their
private funds and are alone responsible for its management. All the joint partners shall
be Kuwaitis.
2- The silent partners who share in the capital of the company financially, without any of
them being responsible for the obligations of the company except to the extent of his
share in the capital.
Article 57
Taking into consideration the special provisions included in this Book, the establishment of
the Limited Partnership Company, its registration in the commercial register, the minimum
capital, assignment, attachment and mortgage of the partners shares, dismissal of the partner
as well as the amendment of its Memorandum of Association and its administration, shall be
governed by the provisions set forth for the Limited Liability Company in this regard.
The Memorandum of the Limited Partnership Company shall include the names of the joint
and silent partners altogether with their nationalities, domiciles and the amount of the shares
of each one of them in the capital. The ownership percentage of Kuwaitis shall not be less
than fifty one per cent of the companys capital.
Article 58
The name of the Limited Partnership Company shall consist of all the names of the joint
partners or the name of one or more of them, with the addition of the term (and his partners or
their partners).
The name of the company shall not include the name of a silent partner. Should his name
be mentioned without any objection from him, he shall be held liable as a joint partner before
bona fide third parties.
In all cases, the name of the company shall be appended to the term (Limited Partnership
Company).
Article 59
The management of the company shall be handled by one or more directors chosen by all
the partners from among the joint partners or others. The silent partner shall not be allowed,
even by virtue of a power of attorney or an authorization, to interfere in the management of
the company or else he shall be held responsible in all his private funds for the obligations
arising from the works already initiated by him for the account of the company.
However, monitoring the acts of the companys directors, viewing the ledgers of said
company and providing them with advices, shall not be considered as interference in the
business management.

Book 4
Equities Partnership Company
Chapter 1
Preliminary Provisions
Article 60
An Equities Partnership Company is a company consisting of joint partners collectively
liable for the companys obligations in all their funds, as well as of shareholding partners, not
liable for the obligations of the company but to the extent of the amount of their shares in the
capital.
The company shall bear a name comprising one or more of the joint partners names, or a
creative name or an object-derived nomination.
The shareholding partners name shall not be embodied in the companys name. Should his
name be mentioned knowingly in the companys name, he shall be considered, with regard to
bona fide third parties, as a joint partner.
In all events, the term (Equities partnership Company) shall be appended to the name of the
company.
Article 61
The joint partner in this company shall be governed by the legal provisions applied to the
partner in the Joint Liability Company while the shareholding partner shall be governed by
those applied to the shareholder in the Closed Joint Stock Companies, and that, to the extent
consistent with the provisions of this Book.
Article 62
The capital of the company shall be sufficient to achieve its objectives. The Implementing
Regulation shall specify the minimum capital of the company, which shall be divided into
undividable shares of equal value.
The shares of the joint partners shall not be negotiable; however, they may be ceded,
attached and mortgaged according to the provisions applied to the shares of the partners in the
Joint Liability Company. On another hand, the shares of the shareholding partner shall be
traded, attached and mortgaged according to the provisions related to Closed Joint Stock
Companies.
Chapter 2
Establishment Terms
Article 63
The provisions applied to the Limited Partnership Company shall also be applied to the
Equities Partnership Company while taking into consideration the provisions set forth in the
following Articles.
Article 64
The Memorandum of the Company shall include the following data:
1- The address of the company.
2- Its headquarters.
3- The term of the company, if any.
4- The objectives of the company.
5- The names of the partners, their job description in the company, their nationalities and
domiciles as well as the amount of shares owned by each one of them.
6- The amount of the companys capital, the number of shares into which the capital is
divided and the nominal value of the share.

7- The name of the person entrusted with the management of the company from among
the joint partners.
8- Particulars of every non-cash share as well as the name of its provider, the terms of its
submission, the mortgage and preferential rights incurred by the same, if any.
9- An approximate statement of the expenses and costs to be paid by the company
because of its establishment.
The Memorandum of the Company may not include any terms exempting the joint partners
from the liability resulting from the invalidation of the establishment.
Article 65
The number of the partners in the company shall not be less than five, provided that at least
three of them shall be from among the shareholders. All partners shall sign the Memorandum
of the Company while the joint partners shall handle the establishment procedures and will be
held liable for compensating the damage resulting from any mistake in such procedures.
Article 66
The partners shall pay at least half of the capital upon establishment of the company and
shall deposit the amount at one of the local banks in an account opened in the name of said
company. The amount shall be delivered only to the director of the company after he submits
a certificate confirming its registration in the commercial register. The amount remaining
from the capital shall be settled in a period of maximum three years as from the registration
date.
Chapter 3
Rights and Obligations of the Company Administration
Article 67
The company shall be managed by one director or more from among the joint partners. His
powers and competencies shall be specified in the Memorandum of the Company.
The provisions and rules set forth for the director of a Joint Liability Company shall be
applied with respect to his duties, responsibilities, dismissal and the companys responsibility
for his actions, while taking into consideration the provisions provided for in the following
articles.
Article 68
The shareholding partner shall not be allowed, even by virtue of a delegation from the joint
partners, to interfere in the administration works or else he shall be jointly responsible with
said joint partners for the obligations arising from his management actions.
Article 69
Non-managing directors shall have the right to view, by themselves or through an agent on
their behalf, the ledgers and documents of the company, as well as extract the data needed and
request any other information. Any agreement or decision to the contrary shall be null and
void.
Article 70
Should the number of the shareholding partners exceed seven members, the company shall
form a Control Board including at least three members elected by the companys General
Assembly from among the shareholding partners during maximum thirty days from the date
of registering the company in the commercial register. Joint partners shall not have countable
votes in electing the members of the Control Board where the membership term shall be three
renewable years. The members of the Control Board shall carry out their work gratis, unless
the Memorandum of the Company stipulates otherwise.
Article 71
The Control Board shall submit a report to the partners General Assembly regarding the
outcome of its work. The members of the Control Board shall be responsible for the mistakes

committed by the directors as well as their consequences, should they be aware thereof and
ignored stating the same in their report.
Article 72
In terms of the appointment of the auditor, the formation, control and liquidation of the
companys reserves, the provisions of the Closed Joint Stock Company shall be applied.
Article 73
The Equities Partnership Company shall have a General Assembly consisting of all the
joint and shareholding partners and shall be governed by the provisions set forth for the
General Assembly of the closed joint stock company.
The director of the company shall have the powers of the Board of Directors at a closed
joint stock company with respect to calling for a General Assembly meeting.
Article 74
The General Assembly shall not have the right to amend the Memorandum of the Company
unless with the consent of all joint partners in addition to a number of shareholders
representing more than half of the shares of the shareholding partners in the capital. Such
amendment shall enter into force as from the date of its registration in the commercial
register.
Article 75
Should the position of the companys director become vacant, the Control Board shall
appoint an interim director who shall take charge of running urgent matters as well as call the
General Assembly for a meeting during fifteen days from the date of his appointment to take
a decision on the appointment of a companys director according to the majority needed to
amend the Memorandum of the Company, unless otherwise stipulated in the Memorandum of
the Company.

Book 5
Particular Partnership Company
Article 76
The Particular Partnership Company shall consist of two or more persons, provided that it
shall be limited to the relation between the partners without producing any effects against
others.
Article 77
The Memorandum of the Particular Partnership Company shall not be registered in the
commercial register or declared. The Memorandum is concluded for the purpose of
determining the rights and obligations of the partners, as well as specifying how the profits
and losses shall be distributed between them in addition to other terms.
Article 78
The Particular Partnership Company shall not have a corporate personality, and third
parties shall not have any legal connection with the companys works, except with the partner
(s) engaged in a contract with them.
The partners may have recourse against each others with regard to the companys works
and the extent of their association thereto, as well as the share of each partner in the profit and
loss according to their agreement.
Article 79
Except for the provisions of the previous Article, third parties may uphold the
Memorandum of the Company should the latter deal with him as a corporation.

Book 6
Professional Companies
Article 80
A professional company may be established from two persons or more sharing one liberal
profession. This company shall be governed by the terms and controls of practicing said
profession and it shall have the objective of carrying out the profession activities through
collective cooperation between them. It shall bear an objective-derived name and the names
of the partners or the name of one of them with the addition of the term (and his partners or
partner) as the case may be.
The company may take the form of a closed joint stock, limited liability, joint liability or
limited partnership company. However, the partner therein shall not take the capacity of
merchant. The company shall be subject to the rules prescribed for the form it has taken to the
extent that it is consistent with the provisions of this Book.
The implementing regulation shall list the professions which are entitled to establish such
kind of companies.
Article 81
The license for establishing the professional company shall be obtained from the Ministry
in coordination with the legally competent authorities supervising the organization of the
affairs of the profession practiced by the company, and according to the terms and rules
approved by the Ministry in this regard.
The Memorandum of the Company shall be declared by inscribing the same in a special
register set for this purpose by the competent authority which has given its approval for the
Ministry to issue the license- the company shall not acquire the corporate personality and
shall not carry out its business till after registering it in this register.
Article 82
The Ministry shall, in coordination with the competent authorities supervising the
organization of the affairs of the profession practiced by the company, determine the data to
be included in the Memorandum of the Company.
Article 83
The partner may assign, sell or mortgage his shares or equities, provided that such shares or
equities are transferred in all cases to persons practicing the same profession, even if they
were sold at a forced sale.
In case of assignment or sale to a third party, and should the partners not agree on the same
during thirty days as from the date of proposing the transaction thereto, the company shall
buy the share or equity at the offered value and the capital shall be decreased by the nominal
value of the share or equity.
Article 84
The withdrawal, assignment, sale or mortgage shall be deemed effective in confronting
others following its inscription in the register set for this purpose.

Book 7
Single Person Company
Article 85
The Single Person Company means in the application of the law herein every economic
activity whose capital is fully owned by one Kuwaiti physical or legal person. The owner of
the company shall not be liable for the obligations of the company but to the extent of the
capital value allocated thereto.
Article 86

The Single Person Company shall have a Statute including the name, object and term of the
company as well as the data of its owner, the method of its administration, liquidation and
other provisions set forth in the Implementing Regulation.
Article 87
The capital of the company shall be fully paid and sufficient to achieve its objectives. The
Implementing Regulation shall specify the minimum capital allowed for the company. The
capital shall be divided into undividable shares of equal value. The capital may include shares
in kind which shall be in conformity with the provisions provided for in Article 11 hereof.
Article 88
The shares of the companys capital may be mortgaged as well as seized and sold
according to the provisions of the Civil and Commercial Procedure Law. Should a part of the
shares be sold, the company shall turn by rule of law to a limited liability company as from
the date of the auction knockdown. In all cases, the auction knockdown judgment shall be
published and declared.
Article 89
The owner of the capital shall run the company and he may also appoint one director or
more to represent said company before courts and others. The latter shall be responsible for
its management before the owner, provided that any decision appointing the director shall not
take effect till after registering it in the commercial register.
Article 90
Should the owner of the capital liquidates the company or suspends its operations, in bad
faith, before the expiry of its term or before achieving its establishment objective, he shall be
liable for its obligations in his own funds.
He shall also be liable in his own funds for the damage incurred by bona fide third parties,
should it become evident that he did not separate between his financial liability and the
companys liability.
Article 91
Taking into consideration the provisions of this book, the Single Person Company shall be
subject to the provisions regulating the limited liability company to the extent that does not
conflict with its nature.

Book 8
Limited Liability Company
Chapter 1
Preliminary Provisions
Article 92
The Limited Liability Company is the company in which the number of partners shall not
exceed fifty. None of such partners shall be liable for the obligations of the company except
for his share in the capital. The company shall take a special name inspired from its objective
or from the name of one partner or more.
The name of the company shall be appended to the term (With Limited Liability) or
(W.L.L.). Should non-Kuwaitis physical persons be contributing in the establishment of the
company, they shall have a legitimate and permanent residency in the State of Kuwait.
Article 93
No limited liability company shall exercise banking or insurance activities or invest money
for the account of third parties.

Article 94
The Limited Liability Company shall not be established nor shall its capital be increased
through public subscription. The public subscription means sending an invitation to the
public, directly or indirectly, to contribute in the company.
The shares of the partners shall not be in the form of negotiable stocks nor shall the
company borrow though issuing any negotiable securities.
Article 95
The capital of the company shall be sufficient to achieve its objectives and shall be paid in
Kuwaiti currency. The Implementing Regulation shall specify the minimum capital of the
company as well as the percentage of Kuwaitis and others therein.
Chapter 2
Establishment Terms
Article 96
The memorandum of the Limited Liability Company shall include the following data:
1- The name and address of the company.
2- The names, titles and nationalities of the partners.
3- The headquarters of the company.
4- The term of the company, if any.
5- The objectives for which the company was established.
6- The amount of the companys capital, the cash and in-kind shares submitted by each
partner thereto.
7- The names of the persons responsible for running the company from among the
partners and others, or the method of their appointment, as well as the names of the
Control Boards members in the cases where such board formation is required by law.
8- Manner of profit and loss distribution as well as incurring losses.
9- Any other data required by the Implementing Regulation.
Article 97
The Limited Liability Company shall not be established unless cash shares were all
distributed among the partners and fully paid, and the shares in kind were all delivered to the
company.
The cash shares shall be deposited at one of the local banks and shall not be released but to
the designated directors, and that, after they have submitted a certificate confirming their
registration in the commercial register.
Chapter 3
The Legal System of the Shares
Article 98
The capital of the company shall be divided into shares of equal value not less than one
hundred Dinars and the share shall be undividable.
Should the share be owned by multiple owners, they shall select from among them the
person who shall solely represent them before the company.
Article 99
The shares of the Limited Liability Company shall not be traded unless according to the
provisions of this Law. Such shares may be ceded by virtue of a written document and the rest
of the partners shall have the right to recover said shares in the same conditions should the
assignment be made to non-partners.
Article 100

Should the share be assigned to non-partners, the consent of other partners shall be
obtained. However, if the consent of the partners could not be obtained, the assignment
conditions shall be published in the Official Gazette. Should fifty days lapse without any
application being submitted by the one of the partners to the Ministry expressing his desire to
use the right of redemption, the assignor may dispose of his share. Should the right of
redemption be used by more than one partner, the sold share shall be divided among them in
proportion to the share of each one of them in the capital.
The redemption application shall not be considered if it was not attached to a certified
check in the name of the assignor for the full value of the assigned share. Such check shall be
delivered to the assignor once the assignment procedures are complete. Should the assignor
refuse to complete the assignment, the partner requesting redemption may either relinquish
redemption or compel the assignor to do so by virtue of a Court judgment.
The Memorandum of the Company shall be amended to indicate assignment by an official
document signed by the assignor and assignee without the need of the signature of other
partners, or by virtue of a Court judgment validating the authenticity and effectiveness of
redemption.
The assignment of the share shall not take effect in relation to partners or third parties till
after the registration date.
Article 101
The shares of the deceased partner shall be transferred to his heirs and the Memorandum of
the Company may stipulate that other partners shall have the right to buy these shares. Should
the transfer of the shares to the heirs result in increasing the number of the partners above the
maximum limit prescribed, the inherited shares shall be considered as one share in relation to
the company, unless the heirs agree on the transfer of the shares to a particular number of
them consistent with the maximum number of partners allowed.
The legatees shall be subject like the heirs to the provision of the preceding Paragraph.
Article 102
The partner shall mortgage his share by virtue of a certified official document and the
mortgage of the share shall not take effect in relation to partners or third parties till after the
date of registration in the commercial register as well as after notifying the company of such
mortgage. Should one of the companys creditors start with the execution procedures against
a debtor share, he may agree with the debtor and the company on the method and conditions
of sale, otherwise, the share shall be sold in the public auction according to the Civil and
Commercial Procedure Law. The partners in the company may participate in this auction and
they shall have the right to recover the share in the same knock-down conditions provided that
the full price is deposited in the treasury of the Court during seven days from the auction
knock-down date. This provision shall apply in case the bankruptcy of one of the partners is
declared.
Chapter 4
Administration Rights and Obligations
Article 103
The company shall be managed by one director or more, from among the partners or
others, to be designated in the Memorandum of the Company. Should the Memorandum of
the Company fail to appoint the directors, the Ordinary General Assembly shall handle such
task.
Article 104
Without prejudice to the competencies of the Extraordinary General Assembly and the
rights of the Control Authorities in dismissing the companys director, the latter may be
dismissed by a Court judgment based upon the request of one partner or more owning at least
one fourth of the capital equities for the following reasons:
1- Should an act of fraud be committed by him.
2- Should a mistake be committed by him causing serious damage to the company.

3- Should the provision of Article 106 hereof be violated by him.

Article 105
If the powers of the companys director are not specified in the Memorandum of the
Company or in the decision issued by the General Assembly of the partners for his
appointment, the director shall have full authority to handle all the acts and conducts
necessary to achieve the objectives of the company.
The directors shall be jointly liable before the company, partners and third parties for their
violation of the provisions of law or Memorandum of the Company or for the mistake
committed in the administration according to the rules stipulated in the Joint Stock Company
Book hereof.
Article 106
Should the Memorandum of the Company fail to stipulate the powers of the companys
director or the controls of his work practice, he shall not have the right to assume the
management of other competing companies or companies having similar objectives, nor
conclude contracts with the company managed by him for his own account or for the account
of third parties nor carry out an activity similar to the companys activity for the account of
third parties, unless by an authorization issued by the Ordinary General Assembly of the
partners.
Article 107
Should the number of the partners exceed seven, a Control Board shall be formed in the
Memorandum of the Company from at least three non-managing members in the company to
be chosen from among the partners for a period not exceeding three renewable years. The
Control Board shall examine the books and documents of the company as well as take stock
of the fund, goods, securities and evidentiary documents of the companys rights. Such board
may also ask the directors at any time to submit reports on their management, control the
budget, profits distribution and the annual report, as well as submit its report in this regard to
the Ordinary General Assembly of the partners.
The members of the Control Board shall accomplish their work without any remuneration
unless otherwise stipulated by the Memorandum of the Company, or a decision is issued by
the General Assembly. The assembly may dismiss said members at any time.
Should the number of the partners be less than seven and the Memorandum of the
Company fail to stipulate the formation of the Control Board, the non-managing partners shall
monitor the acts of the directors such as the joint partners in the Joint Liability Company and
they may view the companys books and documents.
Article 108
The members of the board of control shall not be liable for the acts of the directors, unless
they became aware of the mistakes thereof and neglected to mention the same in their report
submitted to the Ordinary General Assembly of the partners.
Article 109
The Memorandum of the Limited Liability Company shall include the appointment of one
or more auditors of the companys accounts. The latter shall be governed by the rules and
provisions stipulated concerning the auditor in the Joint Liability Company in terms of his
appointment, powers, responsibilities, remuneration, dismissal and resignation.
Article 110
The Implementing Regulation shall show the records and books which are prepared at the
head office of the company, altogether with the data contained therein.
Every partner shall have the right to review, in the head office of the company, the
companys accounts as well as all its documents, papers and books. Every condition and
decision to the contrary shall be null and void.
Article 111

The Limited Liability Company shall have a General Assembly formed by all the partners
and convening at the invitation of the companys director.
The companys director may call for the General Assembly meeting at any time and he
shall invite the General Assembly to meet upon a request presented thereto by the board of
control, accounts auditor or a number of partners owning assets at least one fourth of the
companys capital. The Ministry may also call for the assembly meeting and attend the same
at any time in the instances where the director fails to perform his duty of calling the same to
convene.
The procedures of the call for the General Assembly of the partners shall be subject to the
provisions specific to the procedures of calling for the meeting of the General Assembly of
the Closed Joint Stock Company.
Article 112
Every partner shall have the right to attend the General Assembly meeting by himself or
through his representative to be delegated from non-members of the Control Board or the
companys director by virtue of a proxy or authorization granted by the partner himself. Every
partner shall have a number of votes that is equivalent to the number of shares he owns in the
company.
Article 113
The General Assembly meeting shall not be considered as valid unless attended by a
number of partners owning more than half of the capital and the decisions shall not be correct
except by the majority of the shares represented in the meeting, unless the Memorandum of
the Company stipulates a larger majority. Should such quorum fail to be constituted in the
first meeting, the assembly shall be invited for a second meeting during ten days following
the first meeting for the same agenda. Said meeting shall be considered as valid regardless the
number of shares represented therein. In this event, the decisions shall be issued in the
majority of the shares represented in the meeting, unless the Memorandum of the Company
stipulates otherwise.
The director of the company or the members of the Control Board shall not have the right
to vote on the decisions related to the release of any of them from liability.
Article 114
The director of the company shall call the ordinary general meeting to convene at its annual
meeting, and that within three months from the end of the fiscal year. The agenda of the
annual meeting of the assembly shall include the following matters to be considered and
decided:
1- The report of the director on the companys activity and financial standing during the
last fiscal year as well as the report of the Control Board if applicable.
2- The report of the auditor on the financial data of the company.
3- Financial data of the company.
4- The suggestions of the director with regard to the profits distribution.
5- The appointment and dismissal of the Control Board, if applicable.
6- The appointment of the auditor for the following fiscal year as well as the
determination of his remuneration.
7- Any other topics deemed appropriate by any of the authorities having the right to call
for the assembly meeting, to be included in the agenda.
Article 115
The Extraordinary General Assembly shall be subject to the same provisions specific to the
Ordinary General Assembly while taking into account the provisions stipulated in the
following article.
Article 116
The meeting of the Extraordinary General Assembly shall not be considered as valid unless
attended by a number of partners owning three-quarters of the capital. The decisions thereof
shall be issued only with the consent of the partners owning three-quarters of the capital.

Article 117
The Extraordinary General Assembly shall take charge of the following matters:
1- Amendment of the Memorandum of the Company.
2- Dissolution and liquidation of the company.
3- Merger, conversion, or division of the company.
4- Increase or decrease of the capital.
5- Dismissal of the companys director or limitation of his powers.
While taking into consideration the provisions of the merger, conversion and division, the
decisions of the Extraordinary General Assembly shall take effect when registered in the
commercial register, without the need to establish such decisions in an official document.
Article 118
A percentage of the companys net profits shall be deducted annually in order to form the
reserves according to the provisions prescribed for the Joint Stock Companies.

Book 9
Public Joint Stock Company
Chapter 1
Preliminary Provisions
Article 119
The Joint Stock Company owns a capital divided into shares having equal value and
negotiable in the manner prescribed herein. The liability of the shareholder shall be limited to
the settlement of the value of the subscribed shares and he shall be liable for the obligations of
the company only to the extent of the nominal value of the subscribed shares.
Article 120
The Public Joint Stock Company shall bear a name referring to its objective and such name
shall be derived from a physical persons name only in the following instances:
1- Should the objective of the company be the investment of a trademark or any of the
intellectual properties rights registered in the name of such person.
2- Should the conversion take place into a Public Joint Stock Company from a company
whose title includes the name of a physical person.
In all cases, the name of the company shall be followed by the phrase (Kuwaiti Public Joint
Stock Company or the abbreviation KJSC Public).
Chapter 2
Terms of Establishment of the Public Joint Stock Company
Article 121
The Memorandum of the Public Joint Stock Company shall include the following data:
1- The name of the company.
2- The headquarters thereof.
3- The term of the company, if any.
4- The objectives for which the company was established.
5- The names of the founding partners, whose number shall not be less than five except
for the companies which are established by the State or the public authorities and
institutions. Such companies may solely complete the establishment or participate with
fewer partners.
6- The companys capital amount as well as the number of equities into which the capital
is divided.

7- Particulars of every non-cash share as well as the name of its provider, the terms of its
submission, the mortgage and preferential rights incurred by the same.
8- The privileges decided for the founders and the reasons thereof.
9- An approximate statement of the expenses, remunerations and costs settled by the
company or to which the company is committed to pay because of its establishment.
Article 122
The founders shall submit the application for approval of the companys establishment to
the Ministry, and the application shall state the name of the person delegated by the founders
to proceed with the establishment procedures as well as his occupation and the address to
which all the correspondences related to the establishment are sent to him. The application
shall be enclosed with the following documents:
1- A copy of the draft Memorandum of the Company signed by the founders.
2- Should the activities of the company be of those requiring the issuance of a law in their
regard or the approval of any of the Control Authorities thereon, such condition shall
be fulfilled before submitting the application.
3- Should there be shares in kind, the application shall be enclosed with a certificate of
assessment according to Article 11 hereof.
4- Should the name of the company be derived from the name of a physical person, the
application shall be enclosed with a proof that any of the Intellectual property rights or
trademarks to be invested by the company are registered in the name of such person, or
with a proof of ownership of a commercial company whose name was taken thereby.
5- Should the company bears the name of another company, the application shall be
enclosed with a proof that the latter is under liquidation and approves the nomination.
6- Should a legal person be among the founders, it shall enclose with the application a
certified copy of its establishment document as well as a proof that the competent
authority therein approves on the participation in the establishment.
7- The economic feasibility study of the companys project.
8- Any other documents required by the Implementing Regulation.
Article 123
The approval on the establishment of the company shall be obtained by a decision issued
by the Minister during sixty days from the date of submitting the application and providing
the statements and documents mentioned in the previous Article. In case of rejecting the
application, the decision shall be justified and the lack of the Ministrys response regarding
the application during said period shall be considered as the refusal of the application.
He, whose application is rejected, may appeal against the decision of rejection before the
competent Court during sixty days from the date he receives notification of the application
rejection, or from the date the time limit mentioned in the previous Paragraph lapses without
receiving any reply.
The founders shall not have the right to submit an establishment application for the same
company once more till after the forfeiture of the reason for rejection.
Article 124
An electronic register shall be set in the Ministry to register the applications for approval of
the Public Joint Stock Companies approval. Such applications shall be registered by serial
numbers.
Article 125
The Ministry shall, during a maximum period of one week as from the issuance of the
establishment decision, notify the founders of the decision issuance. Moreover, said Ministry
shall, during said period, invite the founders to sign the contract authenticated in the
competent department at the Ministry. A true copy of the Memorandum of the Company shall
be deposited after authentication in the companys file at the Ministry.
Article 126

The company shall acquire its juridical entity from the date of issuance of its establishment
decision. The procedures of publication and declaration of the establishment decision and the
Memorandum of the Company shall be completed. The subscription prospectus shall be
submitted in the manner prescribed in Kuwait Law No. 7/2010, during thirty days from the
publication of the decision of the companys establishment. Furthermore, the subscription
procedures shall start during thirty days from the date of obtaining the authoritys approval on
the subscription prospectus or from the date of the prospectus commencement, whichever
comes first.
Article 127
The founders shall subscribe to shares not less than ten percent of the companys issued
capital. Before inviting the public for subscription, they shall deposit the percentage to be
paid of the value of these shares at the local banks, for the account of the company under
establishment and they shall submit a certificate thereof to the Ministry.
The Implementing Regulation may include the procedures of opening the account of the
company under establishment and the manner to deposit and keep the amounts as well as
verify the balances deposited therein in a manner which is independent of means for the
certificate mentioned in the previous Paragraph.
Article 128
The invitation of the public for public subscription to the companys shares shall be sent
according to a subscription prospectus providing all the data and fulfilling all the procedures
stipulated in the previously mentioned Kuwait Law No. 7/2010 and the Implementing
Regulation thereof.
The founders shall be jointly liable for the validity of the data stated in the subscription
prospectus.
Article 129
The subscription shall take place at one or more local banks in the State of Kuwait or one
of the Kuwaitis banks branches abroad.
The instalments to be paid upon subscription shall be settled in the bank where an account
in the name of the company is opened to log the paid amounts. The door of subscription shall
remain opened for a period of minimum twenty one days and not more than three months.
Article 130
No one shall have the right to subscribe more than once, and the subscription shall be
complete, unconditional and serious. The simulated subscription, subscription in fake names
or changing the facts of subscription in any way shall be prohibited.
Without prejudice to the provisions of Article 134 hereof, the founders shall not have the
right to subscribe, whether directly or indirectly, to any number of shares exceeding the one
stipulated in the Memorandum of the Company.
The founders shall, before distributing the shares, sort the subscription applications
accurately to make sure that there were no violations and they shall exclude the applications
violating the Law.
Article 131
The subscription of the shareholder shall take place by an application signed by him or his
representative. The subscription application shall state the companys name, object and
capital, altogether with the name of the subscriber, his domicile in Kuwait, the number of
subscribed shares, paid instalments, his acceptance of the provisions of the Memorandum of
the Company, or any other data specified by the Authority.
The subscription may be completed through electronic means by using mechanisms
provided by the banks to their customers owning bank accounts, or provided by the clearing
agencies to their clients owning trading accounts. The use of the username and password
provided by the bank or clearing agency to the subscriber when submitting the application
electronically shall act as a subscription application signed by the subscriber.
The subscriber shall pay the instalments to be settled in cash in Kuwaiti Dinar in return of a
receipt signed by the bank and showing the name of the subscriber, his domicile, the date of

subscription, the number of the subscribed shares and the paid instalments. The subscriber
may pay the instalments to be settled by checks or through bank transfer. The paid amount
shall be recorded on his account. The subscription shall be considered as final when the
subscriber receives said receipt or when the amount is recorded on his account, provided that
it shall be registered for the account of the company under establishment.
Article 132
A printed copy of the Memorandum of the Company shall be provided on the website of
the company under establishment, where every subscriber may obtain a copy thereof.
Article 133
The bank shall keep all the funds collected from the subscribers for the account of the
company under establishment and he shall deliver the same only to the first Board of
Directors, after refunding the amount exceeding the shares offered for subscription, according
to Article no. 138 hereof.
Article 134
In all the events where the subscription does not use up all the shares offered for
subscription during the original subscription period, the founders may open the door for
subscription for another period of maximum three months. The founders may, as an exception
to the provision of the second Paragraph of Article 130 hereof, subscribe in this case. Should
shares be left at the end of the new subscription period, the founders shall either cease the
establishment of the company or decrease its capital.
Article 135
The Public Joint Stock Company may have, upon its establishment or increasing its
capital, one underwriter or more to take up the rest of its shares left unsubscribed.
In case of the shares offered are not subscribed in full during the period fixed for this
purpose, the undertaker covering the subscription shall commit to buy the rest of the shares
left unsubscribed. He may re-offer his subscribed share to the public without having to abide
by the share trading procedures and restrictions set forth in this Law.
The Implementing Regulation shall fix the procedures, instances and conditions of
applying the provisions of this Article.
Article 136
Should the founders choose to reduce the companys capital, they shall submit an
application to the Ministry and declare such matter to the subscribers. Every subscriber shall
have the right to withdraw his subscription during a period of fifteen days from the date of
declaration. The Ministry shall not have the right to decide on the request of decreasing the
capital till after the expiry of said period. Should the percentage of the shares whose
subscription is withdrawn be less than ten percent of the overall shares offered for
subscription, said subscription shall be final, unless the companys capital becomes lower
than the minimum set for the companys capital after the decrease.
Article 137
Should the capital decrease fail or the founders cease the establishment of the company, the
founders shall declare such matter and refund the paid amounts in full and immediately to the
subscribers as well as all the revenues that may be achieved by the company.
In this case, the founders shall assume all the amounts spent in the establishment process
and shall be jointly liable before third parties for their acts and conducts taking place during
the establishment period.
Article 138
Should all the shares be used up in subscription, the door of subscription shall be closed at
the end of the day on which the subscription was completed in full, provided that the original
subscription period has lapsed. If, after closing the door of subscription, it appears that the
number of the shares offered is exceeded, the shares shall be allocated to the subscribers as
per the subscription percentage undertaken by them, the allotment shall be rounded up the

closest whole number and the board of director shall dispose of the fractional shares for the
account of the company.
Article 139
Every subscription contrary to the previous provisions shall be null and void. Every
stakeholder shall have the right to plead such nullity.
The action in nullity shall extinguish six months after closing the door of subscription.
Should the nullity be pleaded because of an act penalized by the criminal law, the action in
nullity shall not forfeit except with the forfeiture of the criminal action. A judgment in nullity
may be pronounced even if the company was under liquidation.
Article 140
The founders may, within three months after closing the door of subscription, submit to the
Ministry a statement of the number of the subscribed shares, showing the payment of the
instalments to be paid, names and addresses of the subscribers and the number of shares
undertaken by each one of them, the value of the share and the paid amount thereof, the
names of the subscribers whose subscription was invalidated as a result of sorting the
subscription applications.
Should the Ministry find that some of the provisions hereof were not respected in terms of
subscription or shares allocation, it may submit a report thereon to the constituent assembly in
addition to reporting the violation to the competent authorities.
Article 141
The founders shall invite the subscribers to attend the constituent assembly within three
months from closing the door of subscription. Should such period lapse without any
invitation, the Ministry shall take charge of this task during fifteen days as from the expiry of
said period to call the constituent assembly to convene.
Article 142
The invitation to attend the constituent assembly meeting containing the agenda as well as
the place and time of the meeting shall be sent through advertising twice or by any modern
means of advertising specified by the Implementing Regulation, provided that advertising in
the second time shall be made after the lapse of a period of at least seven days from the date
of the first advertisement and at least seven days before holding the meeting.
The Ministry shall be notified in writing of the agenda, date and time of the meeting at least
seven days before it is convened, so that its representative attend said meeting. Should the
representative of the Ministry fail to attend the meeting after receiving notification thereof,
the meeting shall remain valid.
The constituent assembly meeting shall be chaired by whoever is elected by the assembly
for this purpose.
Article 143
The constituent assembly meeting shall not be deemed valid unless attended by the
shareholders who have the right to vote and representing more than half of the subscribed
shares.
Should such quorum fail to be constituted, the assembly shall be invited for a second
meeting featuring the same agenda, to be convened during a period of at least seven days and
of maximum thirty days from the date of the first meeting. The second meeting shall be
deemed valid regardless the number of the attendees.
It is allowed not to send a new invitation for the second meeting in case the date thereof is
specified in the invitation for the first meeting.
The decisions shall be issued by the absolute majority of the shares represented in the
meeting.
Article 144
The founders shall submit to the constituent assembly a report containing sufficient
information on all establishment operations and the amounts expended along with the
supporting documents. Such report shall be kept in a place specified by the founders so that

the subscribers may view the same, and that, at least seven days before the assembly meeting.
This matter shall be mentioned in the invitation sent to the subscribers to attend the meeting.
Article 145
The constituent assembly shall take charge of the following matters:
1- Approve the procedures of the companys establishment after verifying their validity
and consistency with the provisions of law and Memorandum of the Company.
2- Approve the assessment of the shares in kind, if applicable, in the manner set forth in
Article 11 hereof.
3- Elect the members of the first Board of Directors.
4- Choose the auditor and fix his remuneration.
5- Appoint the members of the Sharia Supervisory Board operating according to the
provisions of the Islamic Sharia.
6- Declare the establishment of the company completely.
A copy of the minutes of the constituent assembly meeting comprising the decisions taken
shall be sent to the Control Authorities. The Ministry may object to any decision should it be
violating the Law or the Memorandum of the Company. The objection shall be justified and
the company shall be informed thereof within two weeks from the date of notifying the
Control Authorities of the minutes of meeting. In this case, the decision shall not be deemed
in force and the Ministry may present the subject again before the constituent assembly in
order to rectify the violation.
The first Board of Directors shall publish the Memorandum of the Company and register
the same during thirty days from the date of declaring the companys establishment
completely.
Article 146
If it becomes apparent that the establishment of the company was completed contrary to the
Law, every concerned party may, within ninety days from the date of declaration, warn said
company to rectify the violating conduct. Should the company fail to proceed to rectify the
situation within thirty days from the warning date, the concerned party may seek a ruling
from the Court, during thirty days from the expiry of the previously mentioned period, to
compel the company to rectify such conduct or invalidate the company. The Court may order
to compel the company to do the rectification or invalidate the company should it become
evident that rectification of the violating conduct is impossible.
The partners shall not have the right to plead the invalidity of the company against third
parties. Should the invalidity of the company be decided by the Court, it shall be liquidated as
a de facto company. The right to file such claim shall extinguish if the previously mentioned
deadlines are not observed.
The provisions of the aforementioned Paragraphs shall not cause prejudice to the right of
the concerned parties to file a joint liability action against the founders, the members of the
first Board of Directors and first auditors. This action shall forfeit with the lapse of three years
from the date of registering the company in the commercial register or from the date of the
final judgment invalidating the company, whichever is longer. Should the violation be an act
penalized by the criminal law, the liability action shall not forfeit except with the forfeiture of
the criminal action.
Chapter 3
The Capital
Article 147
The capital of the company shall be sufficient to achieve its objectives and it shall be in
Kuwaiti currency. The Implementing Regulation shall specify the minimum capital of the
company according to the type of its activity and the paid-up amount upon establishment.
Article 148

The company shall have an issued capital representing the subscribed shares. The
Memorandum of the Company shall determine an authorized capital of maximum tenfold the
issued capital.
Article 149
The issued capital may be increased by a decision of the companys Board of Directors to
the extent of the authorized capital, provided that said issued capital is fully paid.
Article 150
The capital of the company shall be divided into nominal shares of equal value, knowing
that the nominal value of the share shall not be less than one hundred fils. The share shall not
be divided, however, two persons or more may participate therein provided that one person
represents them before the company. The partners of one share shall be jointly liable for the
obligations incurred by this property.
The shares shall be issued in nominal value, and shall not be issued in a lower value.
Article 151
Taking into consideration the minimum nominal value of the share prescribed in the
previous Article, the company that assumed the distribution of profits for two consecutive
years may after obtaining the approval of the Authority - issue a decision through the
Extraordinary General Assembly to divide each of its shares to multiple shares, all according
to the conditions and controls stated in the Implementing Regulation.
Article 152
The value of the share shall be paid in full or by instalments, provided that the instalment to
be paid at subscription shall not be less than twenty five percent of the nominal value of the
share.
The remaining part of the share value shall be settled within a period of maximum five
years from the date of registering the company in the commercial register and on the dates
fixed by the Board of Directors.
Article 153
The Memorandum of the Company may set forth some privileges to be granted to some
types of shares in terms of voting, profits, outcome of liquidation or any other matters,
provided that the shares of the same type shall be equally treated with regard to rights and
benefits or restrictions.
The rights, benefits or restrictions related to one type of shares shall not be modified except
by a decision from the Extraordinary General Assembly, and the consent of two thirds of the
holders of the share type subject to the amendment.
The Authority shall issue the conditions and rules of the preferred shares and their
conversion into ordinary shares as well as the conditions and procedures of their redemption
by the company. The Authority shall issue the conditions and rules of trading in the preferred
shares.
Article 154
The securities issued by the Public Joint Stock Company shall be subject to the central
depository system of the securities at the clearing agency. The receipt of depositing securities
at the clearing agency shall be considered as an ownership deed of the security. Each owner
shall receive a receipt of the number of the securities owned by him.
Article 155
Should the shareholder be late for settling the instalment due for the shares at its maturity
date, the company shall offer his shares for sale in the stock exchange fifteen days after
sending him a warning.
The company shall pay from the selling price of the shares, to all the creditors of the
shareholder as per their priority, the value of the outstanding instalments, the interests and the
costs that may be incurred by the company. The rest shall be returned to the shareholder.

Should the selling price of the shares be insufficient, the company may claim the rest from the
shareholder in his private funds.
Article 156
The company shall have a special register kept at the clearing agency and listing all the
names of the shareholders as well as their nationalities and domiciles, the number and type of
shares owned by each one of them and the value paid for each share.
Any changes to the data registered in the shareholders register shall be indicated therein
according to the data received by the company or clearing agency.
Any concerned party may ask the company or the clearing agency to be provided with data
from such register.
Chapter 4
Amendment of the Capital
Article 157
The authorized capital of the company may be increased by virtue of a decision issued by
the Extraordinary General Assembly, after the Control Authorities approval, based on a
justified suggestion from the Board of Directors and a report submitted by the auditor in this
regard, provided that the decision of the capital increase include the increase amount and
methods.
Article 158
The authorized capital shall not be increased, unless the original value of the shares was
fully paid. The Extraordinary General Assembly may delegate the Board of Directors to set
the date of its execution.
Article 159
The capital increase shall be covered by shares whose value is paid by the following
means:
1- Offer the shares of the increase for public subscription.
2- Convert funds from the optional reserve or the retained profits or the surplus of the
minimum legal reserve into shares.
3- Convert a debt incurred by the company or bonds or sukuk into shares.
4- Present a share in kind.
5- Issue new shares allocated to introduce one new partner or more suggested by the
Board of Directors and approved by the Extraordinary General Assembly.
6- Any other means set forth in the Implementing Regulation.
In all events, the nominal value of the increase shares shall be equivalent to the nominal
value of the original shares.
Article 160
Should the capital increase be decided by offering shares for public subscription, the
shareholders shall have the priority to subscribe to new shares proportionately to the shares
owned by each one of them, within fifteen days from the date of notifying them thereof,
unless the Memorandum of the Company includes a provision requiring the shareholders to
assign their priority right to subscription.
The shareholder may assign his priority right to another shareholder or to third parties
against a fee or free of charge according to what has been agreed upon between the
shareholder and assignee.
Article 161
Should the shares of the capital increase be offered for public subscription, the invitation
sent to the public for subscribing to the companys shares shall be based on a subscription
prospectus comprising the data and fulfilling the procedures set forth in the previously
mentioned Kuwait Law No. 7/2010.

Article 162
Should the shares of the capital increase be uncovered, the Extraordinary General
Assembly may decide to either refrain from increasing the capital or to be content with the
subscribed amount.
The Implementing Regulation shall state the procedures to be taken in this regard.
Article 163
The Extraordinary General Assembly may decide to add an issue premium to the nominal
value of the new shares, allocated to settle the issuance expenses and then added to the legal
reserve.
The Implementing regulation shall state the conditions and standards of determining the
issue premium amount.
Article 164
The Extraordinary General Assembly may, should the Memorandum of the Company allow
it, decide a privilege to be granted to the shares of the capital increase, provided that such
decision includes the type of the privilege granted to the shares.
Article 165
Should the shares of the capital increase be provided against a share in kind, the latter shall
be evaluated according to the provisions of Article 11 hereof. The Extraordinary General
Assembly shall act as the constituent assembly in this regard.
Article 166
Should the capital increase be covered by conversion from the optional reserve, retained
profits or the surplus of the minimum legal reserve, the company shall issue free shares in the
nominal value without adding an issue premium, and such shares shall be distributed among
the shareholders proportionately to the share owned by each one of them in the capital.
Article 167
Should the capital increase be covered by conversion of a debt incurred by the company or
bonds or sukuk into shares, the provisions set forth in this Law and the Implementing
Regulation thereof shall be observed.
Article 168
The Extraordinary General Assembly may, upon a justified suggestion from the Board of
Directors and after obtaining the approval of the company, decide to decrease the companys
capital in the following instances:
1- Should the capital exceed the companys need.
2- Should the company incur losses which cannot be covered by the companys profits.
3- Any other instances specified in the Implementing Regulation.
Article 169
Should the decision of decrease be taken because the capital exceeds the companys need,
the company shall, before implementing the decision of decrease, settle the matured debts and
submit sufficient guarantees to settle deferred debts. In case of failure to settle the matured
debts or insufficiency of the guarantees securing the deferred debts, the creditors of the
company may object to the decision of decrease before the competent Court according to the
provisions of the Implementing Regulation in this regard.
Article 170
The capital shall be decreased by one of the following means:
1- Decrease the nominal value of the share by not less of the minimum prescribed.
2- Cancel a number of shares equal to the amount to be decreased in the capital.
3- Purchase of a number of shares by the company equivalent to the amount to be
decreased in the capital.

Chapter 5
Disposal and Trade of the shares
Article 171
The founders shall not have the right to dispose of their shares till after the lapse of at least
two fiscal years from the date of registering the company in the commercial register, except
for the act made by one of the founders or his heirs to one of his relatives up to the second
degree of kinship or to another founder, or from the bankruptcy director, State, or any of the
public institutions or authorities to third parties. Every violating conduct shall be null and
void and every concerned party shall have the right to plead such invalidity to be ruled by the
Court on its own.
Article 172
The founder shall not have the right to dispose of their shares till after the company issues
its first budget for at least twelve months, except for the act made by one of the shareholders
or his heirs to one of his relatives up to the second degree of kinship or to another
shareholder, or from the bankruptcy director, State, or any of the public institutions or
authorities to third parties.
Every conduct to the contrary shall be null and void and every concerned party shall have
the right to plead such invalidity to be ruled by the Court on its own.
Article 173
Trading in shares shall be governed by the provisions of the previously mentioned Kuwait
Law No. 7/2010and by all the rules issued by the Authority in this regard.
Article 174
The companys funds shall not be attached to settle the debts incurred by one of the
shareholders; instead, the shares of the debtor as well as the profits thereof may be attached.
Such attachment laid on the share shall be inscribed in the shareholders register and these
shares shall be sold even if the attaching creditor did not submit the original copy of their
deposit receipt. The clearing agency shall commit to make necessary amendments in the
shareholders register according to the result of the sale procedures.
The shares may be mortgaged even if their value was not fully paid and such mortgage
shall be inscribed in the shareholders register in the presence of the mortgagor and mortgagee
or whoever represents them.
The debtor may assign his right to attend the General Assembly meetings of the company
and vote therein to the mortgagee creditor.
The distrainer and mortgagee shall be subject to all the decisions taken by the General
Assembly such as they apply on the distrainee shareholder are attached or the mortgagor.
Article 175
The company may buy its shares for its account in the following instances:
1- For the purpose of maintaining the share price stability, by a percentage that does not
exceed the one set by the Control Authorities of the total shares of the company.
2- Decrease the capital.
3- When the company settles a debt in return of these shares.
4- Any other cases specified by the Authority.
The shares purchased shall not be included in the total shares of the company in the cases
requiring the shareholders to own a specific percentage of the capital as well as in all the
matters related to calculating the quorum needed for the validity of the General Assembly
meeting and voting on the decisions of the General Assembly. The Authority shall issue a
decision regulating the companys purchase of its shares as well as how to use the same and
dispose thereof.
Article 176

The company may after obtaining the approval of the extraordinary general meeting
return the nominal value of some of its shares to the shareholders and such value shall be
taken from undistributed profits and the companys optional reserve.
The owners of redeemed shares shall be granted dividend shares enjoying all the rights
prescribed for ordinary shares except for the redemption of the nominal value upon
liquidation of the company.
Article 177
The founders shares may not be established, however, the profit shares may be established
by a decision of the Extraordinary General Assembly against amounts presented to the
company without interests after its establishment. The holder of the profit shares shall not be
considered as partner in the company and shall not have any of the shareholders rights during
the existence of the company or at time of its liquidation except for the share of profits
prescribed for him. He shall be subject to the decisions of the Ordinary General Assembly of
the company with regard to the profit and loss annual accounts. The Implementing Regulation
shall set forth the way of trading and cancelling such shares.
Chapter 6
Bonds and Sukuk
Article 178
The company may borrow money in exchange of negotiable bonds granted to the
subscribers for the sums which they have lent to the company.
The company may, according to its objectives, issue negotiable sukuk consistent with the
contracts forms that comply with the provisions of the Islamic Sharia.
The bonds or sukuk shall be registered or bearer of one issuance value or classes. Bonds or
sukuk issued at the same time shall have equal rights granted to their holders in the face of the
company. Every term to the contrary shall be null and void.
Article 179
The bonds shall grant their holders the right to redeem the debt amount by earning a
particular return to be paid in specific terms. The company may issue bonds with returns
collected as a share of the annual profits achieved by the company.
The sukuk shall give their holders the right to get their shares of the profits of the sukuk
assets as well as to recover the value of their share from such assets. The company may issue
bonds with returns collected as a share of the annual profits achieved by the company and in
accordance with the provisions of the Islamic Sharia.
Article 180
The company shall not have the right to issue bonds or sukuk unless the following
conditions are met:
1- The companys issued capital shall be fully paid.
2- The Extraordinary General Assembly shall issue a decision of issuing bonds or sukuk.
3- The Authority shall issue a decision of approving the issuance of bonds or sukuk and
the consent of the Central Bank of Kuwait shall be obtained concerning the bonds or
sukuk issued by the banks and companies subject to the control of the Central Bank of
Kuwait. The Authority or the Central Bank may specify the amount by which the
bonds or sukuk are issued from a particular company and in relation to a particular
issuance. In the absence of approval, the decision shall be justified.
Article 181
The total value of the bonds or sukuk issued by the company shall not exceed the fully paid
issued capital.
Excluded are the bonds or sukuk secured by the State or one of the public authorities or
institutions, or those issued by the banks and financing companies.
Article 182

The company may cover the value of bonds or sukuk in one of the following manners:
1- Offer the bonds or sukuk for public or private subscription. The rules and provisions
set forth for the subscription to shares shall apply consistently with the nature of bonds
or sukuk.
2- Sell the bonds or sukuk through the banks, investment companies and underwriters, all
according to the rules and procedures set by the Authority.
Article 183
The call for subscription to bonds or sukuk shall be based on a subscription prospectus
fulfilling the data and procedures provided for in Kuwait Law No. 7/2010.
Should fifty percent or more of the bonds or sukuk offered for subscription be covered
during the set period or any other extension period decided for subscription, the subscription
may be considered as complete, unless the Extraordinary General Assembly decides to
relinquish the issuance of bonds or sukuk as well as reimburse the funds and the returns
thereof, if any, to the subscribers.
Article 184
The following data shall be included in the receipts of deposit of bonds or sukuk:
1- The name of the issuing company, its registration number in the commercial register as
well as its address and headquarters.
2- The companys capital.
3- The total amount of the bonds or sukuk.
4- The name of the bond or sakk holder should the bonds be registered.
5- The nominal value of the bond or sakk and the number thereof.
6- The rate of return and settlement terms thereof, or the annual share prescribed for the
bond or sakk from the companys profits.
7- The guarantees submitted to secure the bond or sakk, if any.
8- Terms and time limits of the bonds or sukuks redemption.
9- Should the bonds or sukuks be convertible to a share, the time limit prescribed for the
bond or sakk holders use of his right of conversion shall be stated as well as the
principles and conditions by virtue of which the conversion is made.
Article 185
In case of violating the conditions and procedures prescribed in this Law concerning the
issuance of bonds or sukuk and subscription thereto, every concerned party may ask the Court
to invalidate the subscription and compel the company to refund the value of the bonds or
sukuk and the returns thereof, if any, in addition to claim compensation for the damage that
may be incurred by said party.
Article 186
The company may issue bonds which are subscribed for less than their nominal value. The
company shall commit to settle the nominal value of the bond and calculate the returns
prescribed based on such value for the subscriber.
Sukuk of any kind shall be issued according to the provisions of the Islamic Sharia and
shall be approved by the Sharia Supervisory Board.
Sukuk shall be issued based on a contract of ownership of leased assets or ownership of
usufructs or a contract of Salam, Istisnaa, Musharaka, Murabaha or ownership of usufructs of
assets and services established as liability by description, or others.
The Authority shall develop the provisions specific to each type of the sukuk as well as the
provisions governing the sukuk assets, the manner to own, direct and liquidate the same and
distribute the liquidation outcome, the inspection and control over the authorities that manage
the sukuk assets and obligations in relation to disclosure, risk policy and other obligations.
The conversion operations of the assets needed for the issuance of sukuk shall be exempted
from fees.
Article 187

The company shall issue bonds or sukuk convertible into shares by virtue of a decision of
the extraordinary general based on a suggestion justified by the Board of Directors according
to the following controls and provisions:
1- Determination of the rules whereby the bonds or sukuk shall be converted into shares,
in particular the value of shares against which the conversion is made.
2- The price of the bond or sakk issuance shall not be less than the nominal value of the
share.
3- The value of bonds or sukuk to be converted into shares in addition to the value of the
companys shares shall not exceed the authorized capital.
4- The period during which the request to convert the bonds or sukuk into shares shall be
allowed.
5- The right of the holder of the bonds or sukuk to recover the value thereof in case he
does not wish to convert the same into shares.
Article 188
The shareholders of the company shall have the priority right to subscribe to bonds or
sukuk convertible into shares, should they express their desire to do so during a period of
maximum fifteen days from the date of receiving the invitation to use such right. The
shareholder may use his priority right to subscribe to such bonds or sukuk by more than he
contributes in the companys capital, should the subscription conditions allow so.
Article 189
The holders of bonds or sukuk who wish to convert the same into shares shall express their
wish during the period set forth in the decision of bonds or sukuk issuance and stated in the
subscription prospectus. Bonds or sukuk shall be converted into shares according to the
principles and conditions which are issued by a decision of the Extraordinary General
Assembly and declared in said prospectus. The company shall settle the value of bonds or
sukuk whose owners dont wish to convert into shares at maturity date.
Article 190
The company shall not have the right, following the issuance of a decision from the
Extraordinary General Assembly to issue bonds or sukuk convertible into shares and until the
date of conversion or settlement thereof, to distribute free shares or profits from the reserve or
issue new bonds or sukuk convertible into shares, until obtainment of the approval of the
Authority of Bonds or Sukuk Holders.
Article 191
Should the decision of the Extraordinary General Assembly issuing the new bonds or
sukuk convertible into shares include the cancellation of the shareholders priority to
subscription, the approval of the Authority of Holders of issued Bonds or Sukuk shall be
obtained prior to such decision.
Article 192
The company shall not have the right, following the issuance of a decision from the
Extraordinary General Assembly to issue bonds or sukuk convertible into shares and until the
date of conversion or settlement thereof, to decrease its capital or increase the percentage set
for distribution as minimum profits to shareholders, excluded the companys capital decrease
due to losses. In this case, the rights of the bonds or sukuk holders to convert the same to
shares shall be reduced to the extent of the percentage decided for the capital decrease,
without the need to obtain approval from the Authority of Bonds or Sukuk Holders.
Article 193
The shares acquired by the bonds or sukuk holders as a result of converting their bonds or
sukuk, shall have dividends of the profits to be distributed for the fiscal year during which the
conversion took place.
Article 194

The company may issue bonds or sukuk whose holders shall have the priority to subscribe
to any capital increase. Whoever is interested, such subscription shall be initiated within
maximum fifteen days from the date of informing the bonds or sukuk holders thereof. The
priority right shall be limited to subscription to shares with nominal value not exceeding the
value of the bonds or sukuk held by the user of such right.
Article 195
Should the company issue bonds or sukuk secured by a mortgage of its funds or by other
guarantees, the legal procedures related to the mortgage or guarantee for the benefit of the
Authority of Bonds or Sukuk Holders or an investment trustee representing said Authority
shall be completed before offering the bonds or sukuk for subscription. The completion of
such procedures shall be handled by the company or the party offering the guarantee.
The company shall, during a period of maximum one month from the expiry of the period
set for subscription, make the necessary to indicate in the margin of mortgage registration the
total amount represented by bonds or sukuk or any other data related thereto and decided by
the Authority.
Article 196
Should the value of the bond or sakk be fully paid at the time of subscription and the
subscriber fail to respond to the call addressed to him by the company to pay the remaining
sum when it becomes due, the company may sell the bond according to the provisions of
Article 155 hereof.
Article 197
Rewarding bonds may be issued when the bond is redeemed or the value thereof is settled.
Article 198
The company shall commit to settle the value of bonds or sukuk according to the
conditions set forth at the time of issuance and the settlement date shall not be moved back or
delayed unless otherwise stipulated in the decision of issuing bonds or sukuk and the
subscription prospectus, or an approval is issued by the Authority of bonds holders.
In case of dissolving the company for a reason other than merger, the holders of bonds or
sukuk may request the settlement of the value thereof before their maturity rate. The company
may also offer them such settlement. Should the value of the bond be settled in any of the two
cases, the revenues for the remaining period of the bond term shall extinguish.
Article 199
Trading in shares shall be governed by the provisions of the previously mentioned Kuwait
Law No. 7/2010and by all the rules issued by the Authority in this regard.
Bonds or sukuk may be mortgaged and attached by applying the same procedures set forth
in this Law regarding shares.
Article 200
The company may accept its debenture bonds or financing sukuk to settle the debts owned
thereto even if before the date due for the redemption of such bonds or sukuk. The company
shall also have the right to re-offer these bonds or sukuk for sale, unless prohibited by a
provision in the Memorandum of the company or such bonds or sukuk were redeemed as a
result of an obligation compelling the company to do so.
Offering the bonds or sukuk redeemed to be offered again for subscription according to the
provisions of the previous Paragraph shall not be considered as a new subscription and it shall
be subject to the same terms of the bonds or sukuk previously subscribed in the same issuance
batch.
Article 201
The company shall have a special register at the clearing agency where the names,
nationalities and domiciles of the bonds or sukuk holders shall be stated altogether with the
number of the bonds or sukuk owned by each one of them unless they were bearer- as well
as the type of bonds or sukuk and the paid up value thereof.

Any changes to the data recorded in the register shall be indicated therein according to the
data received by the company or clearing agency.
Any concerned party may ask the company or the clearing agency to be provided with the
data of such register.
Article 202
An Authority of Bonds or Sukuk Holders shall be constituted for each issuance in order to
protect the common interests of the members thereof. It shall have a legal representative to be
chosen from its members or third parties, provided that such representative doesnt have a
direct or indirect interest with the company. The company shall, during one month from the
end date of subscription to bonds or sukuk, call the Authority of Bonds or Sukuk Holders to
approve its bylaws as well as elect or choose its representative. The invitation shall be made
through publication and declaration.
Should the company fail to invite the Authority of Bonds or sukuk holders to meet during
the period mentioned in the previous Paragraph, every concerned party shall have the right to
ask the Authority to invite the Authority of Bonds or Sukuk Holders to meet during a period
of maximum fifteen days from the date of submitting the application.
Article 203
The Authority of Bonds or Sukuk Holders shall convene its meeting at the invitation of its
representatives, at the invitation of the companys Board of Directors, at the request of a
group of bonds or sukuk holders representing at least five per cent of their value or at the
request of the Authority. The invitation shall be sent though publication and declaration and
shall include the agenda, provided that declaration is made at least two weeks before the
meeting date.
Article 204
The decisions of the Authority of Bonds or Sukuk Holders shall not be considered as valid
unless the meeting is attended by two thirds of the issued bonds or sukuk. Should this quorum
fail to be constituted, the Authority of Bonds or Sukuk Holders shall be called for a second
meeting featuring the same agenda, and that, within seven days from the date of the first
meeting. The second meeting shall be valid if one third of the bonds is represented therein and
the decisions shall be taken by the majority of two-thirds of the attendees.
Any decision extending the date of settling the bonds or sukuk, decreasing the return or the
debt capital, reducing the securities or affecting the rights of the bonds or sukuk holders shall
not be taken unless two thirds of issued bonds or sukuk is represented.
The decisions of the Authority of Bonds or Sukuk Holders shall apply to the absentees and
violating attendees.
Article 205
The representatives of the Authority of Bonds or Sukuk Holders shall have the right to
attend the General Assembly meetings of the company. The latter shall send them the same
invitation sent to the shareholders. They shall have the right to participate in the discussions
without voting.
Article 206
The representatives of the Authority of Bonds or Sukuk Holders may take all the
precautionary measures protecting the rights of bonds or sukuk holders.
Article 207
Whoever objects to provide a replacement of a lost or damaged bond or sakk may file a
claim before the competent Court during fifteen days from the date of his objection, otherwise
such objection shall not be taken into account. The Court shall adjudicate the claim quickly.
The issuance of the new bond or sakk shall be ceased until the claim is adjudicated by a final
judgment.

Chapter 7
Rights and Obligations of the Shareholders
Article 208
The founders and shareholders shall be considered as members in the company. They shall
have equal rights and same obligations taking into consideration the provisions of law.
Article 209
The member in a company shall particularly have the following rights:
1- Receive the profits and bonus shares set for distribution.
2- Participate in the management of the company through membership in the Board of
Directors as well as attend the General Assembly meetings and participate in the
discussions therein, according to the provisions of law and the Memorandum of the
Company. Every provision to the contrary in the Memorandum of the Company shall
be null and void.
3- Obtain, at least seven days before the Ordinary General Assembly meeting, the
financial data of the company for the last accounting period as well as the report of the
Board of Directors and the report of the auditor.
4- Dispose of the shares owned thereby and the priority to subscribe to new shares and
bonds or sukuk according to the provisions of law and the Memorandum of the
Company.
5- Obtain a share of the companys assets upon liquidation after settling all debts incurred
thereby
Article 210
The member in the company shall particularly commit to the following:
1- Settle the installments due for the shares owned thereby at their maturity dates as well
as pay a compensation for delayed payment.
2- Pay the expenses incurred by the Company for settling unpaid instalments from the
value of his shares. The company may execute on the share for the fulfilment of its
rights.
3- Implement the decisions issued by the Ordinary General Assembly of the company.
4- Refrain from doing any act causing prejudice to the financial or moral interests of the
company and commit to compensate the damage resulting from the violation thereof.
5- Follow the rules and procedures prescribed for the shares trading.
Article 211
The General Assembly of the shareholders shall not:
1- Increase the financial burdens of the shareholder or increase the nominal value of the
share.
2- Decrease the percentage to be distributed from the net profits to the shareholders and
which are determined in the Memorandum of the Company.
3- Impose new conditions other than those stated in the Memorandum of the Company
regarding the eligibility of the shareholder to attend the General Assembly meetings
and vote therein.
However, these provisions may not be observed should all shareholders approve so in
writing or by the collective voting of all the shareholders and after the approval of the
Authority as well as the completion of the procedures necessary to amend the Memorandum
of the Company.
Chapter 8
Management of Public Joint Stock Companies
a- Board of Directors

Article 212
The company shall be managed by a Board of Directors whose composition, number of
members and membership period shall be stated in the Memorandum of the Company. The
members of the Board shall not be less than five and the membership period in the Board
shall be of three renewable years.
Should it be impossible to elect a new Board of Directors on the specified date, the existing
Board of Directors shall proceed with the management of the company's activities until the
removal of the reasons and the election of a new Board of Directors.
Article 213
The shareholders shall elect the members of the Board by secret ballot. The Memorandum
of the Company may require the election of a number not exceeding half the members of the
first Board of Directors among the company's founders.
Article 214
The Board of Directors shall elect a Chairman and Vice-Chairman by secret ballot. The
Chairman shall represent the company in its relations with others and before the Courts in
addition to the other powers stated in the Memorandum of the Company. His signature shall
be considered as the signature of the Board of Directors in the companys relationship with
others and he shall implement the decisions of the Board and observe the recommendations
thereof. The Vice-Chairman shall replace the Chairman in his absence or in case of an
impediment preventing him from exercising his powers.
The company shall have a CEO appointed by the Board of Directors from among nonmembers, entrusted with the management of the company. The Board shall specify his
allocations and powers in signing on behalf of the company.
Article 215
The Board of Directors shall carry out all the activities required by the company's
administration according to its objectives. This authority shall only be restricted by the Law,
the Memorandum of the Company or the General Assembly decisions.
The Memorandum of the Company shall state the authority of the Board of Directors in
borrowing, mortgaging the company's real estates, concluding guarantees, arbitration,
conciliation and donations.
Article 216
The Board of Directors may distribute the work among its members according to the nature
of the company's business. The Board may also delegate one of its members, a committee
among its members or a third party to carry out a particular work or more, to supervise the
company's activities or exercise some of the powers or competencies entrusted to the Board.
Article 217
The concerned control authorities shall develop the governance rules of the companies
subject to their control, ensuring the company's proper management in order to achieve the
best returns possible for the shareholders, taking into account the rights of the minority,
control, transparency and lack of conflict of interests, as stated in the conditions met by the
independent members of the Board.
Article 218
The control authorities may compel the companies subject to their control to have one or
more independent members with experience and competence among the members of the
Board of Directors, to be selected by the Ordinary General Assembly and whose
remuneration is specified in accordance with the rules of governance, provided that their
number does not exceed half of the members of the Board. The independent member shall not
be necessarily among the shareholders of the company.
Article 219
Any shareholder whether a natural or legal person, may appoint representatives at the
Board of Directors of the company proportionately to the shares he owns therein. The number

of the Board members selected in this way shall be deducted from the total elected members
of the Board. The shareholders having representatives in the Board of Directors shall not
participate with the other shareholders in electing the remaining members of the Board, unless
within the excess of the rate used in the appointment of their representatives in the Board of
Directors. A group of shareholders may cooperate to appoint one or more representatives in
the Board of Directors, at their combined ownership rate.
These representatives shall have the same rights and obligations of the elected members.
The shareholder shall be responsible for the acts of his representatives towards the
company, its creditors and shareholders.
Article 220
The public institutions, public authorities and companies fully owned by the State shall be
entitled to receive the amounts due for their representation in the Board of Directors of the
company in which they are shareholders. The Chairman of the company shall directly settle
these amounts to the said entities within one week from their maturity date. These authorities
shall determine the bonuses and salaries paid to their representatives in the Board of Directors
of this company.
Article 221
The meeting of the Board of Directors shall only be valid when attended by half the
number of members, provided that the number of attendees is not less than three, unless the
Memorandum of the Company stipulates a higher rate or number. The meeting may be held
by using modern communication means and circular decisions may be taken with the consent
of all the Board members.
The Board of Directors shall meet at least six times per year, unless the Memorandum of
the Company stipulates more times.
Article 222
The minutes of meetings of the Board of Directors shall be recorded and signed by the
present members and the Secretary of the Board. The member, who does not agree with a
decision taken by the Board, shall prove his objection in the minutes of the meeting.
Article 223
Should a position of a Board member become vacant, it shall be occupied by whoever wins
the most votes among the shareholders who did win the membership of the Board of
Directors. In case of impediment, the successor shall replace him and the new member shall
only complete the term of his predecessor.
Should the vacant positions reach the quarter of the original positions, the Board of
Directors shall invite the Ordinary General Assembly to meet within two months from the
date of vacancy of the last position and shall elect the persons to occupy the vacant positions.
Article 224
All candidates for the membership of the Board of Directors shall meet the following
conditions:
1- They shall have the capacity to act.
2- They shall not be convicted of a freedom-restricting felony, a bankruptcy crime by
negligence or fraud, or a crime involving moral turpitude or dishonesty because of their
violation to the provisions of this Law, unless they have recovered their civil rights.
3- Except for the independent members of the Board, they shall be owners, on a personal
basis, or the persons representing them shall be owners, of a number of the company's
shares.
If a member of the Board loses any of the above-mentioned conditions or other conditions
stated in this Law or other laws, he shall not be member of the Board with effect from the
date of losing this condition.
Article 225
No person whether representative of a natural or legal person, shall be member of the
Board of more than five Public Joint Stock Companies headquartered in Kuwait and shall not

be Chairman of more than one Joint Stock Company headquartered in Kuwait. Otherwise, his
membership in the companies exceeding the decided number, according to the dates of
appointment and the effects thereof, shall be considered invalid, without prejudice to the
rights of bona fide parties. Whoever violates this condition shall return to the company that
cancelled his membership, all the bonuses or benefits he obtained from the latter.
Article 226
The Chairman or member of the Board, even if representative of a natural or legal person,
shall not take advantage of the information he had access to by virtue of his function, for his
own or for others' benefit. He shall not also dispose in any way whatsoever of the shares of
the company in which he is member of the Board, throughout his membership period, without
obtaining the consent of the Authority. The Authority shall develop the rules that regulate the
trading of the company's shares by the members of the Board and the method of disclosure
thereof.
Article 227
The members of the Board shall not disclose to the shareholders or to others, outside the
General Assembly meetings, the company's secrets they obtained because of their
management of the same, otherwise they shall be dismissed and held liable for compensation
of the damage resulting from the violation.
Article 228
The Chairman of the Board or any Board member shall not combine between the
membership of the Board of two competing companies and shall not participate in any
business that may compete with the company or trade, for his account or the for the account
of third parties, in any of the activity branches practised by the company. Otherwise, said
company may ask him for compensation or consider the operations carried out for his account
as if carried out for the company's account, unless with the approval of the Ordinary General
Assembly.
Article 229
The Memorandum of the Company shall state the method of determining the remunerations
of the Chairman and members of the Board. The total of these remunerations shall not be
estimated by more than ten percent of the net profits after deducting the depreciation and
reserves and distributing profits of not less than five percent of the capital on the shareholders
or any higher percentage stipulated in the Memorandum of the Company.
However, an annual bonus not exceeding six thousand Dinars may be distributed to the
Chairman of the Board and to every member of the Board from the date of establishment of
the company until the achievement of the profits that allow the latter to distribute the
remunerations according to the preceding paragraph. The independent Board member may be
exempted from said maximum remuneration limit, by a decision issued by the company's
Ordinary General Assembly.
The Board of Directors shall submit an annual report to be shown to the company's
Ordinary General Assembly for approval, including, on an accurate basis, a detailed statement
of the amounts, benefits and advantages obtained by the Board of Directors, regardless of
their nature and name.
Article 230
Whoever has a representative in the Board of Directors, the Chairman, any Board member,
any member of the executive management or their spouses or relatives up to the second
degree of kinship shall not have any direct interest in the contracts and deals concluded by the
company or for the account thereof, unless with an authorization issued by the Ordinary
General Assembly.
Article 231
Without prejudice to the provisions related to the banks and companies allowed to lend, the
company shall not lend a member of its Board of Directors, the CEO or their spouses or
relatives up to the second degree of kinship or their subsidiaries. Any loan granted otherwise

shall be considered null and void, without prejudice to the right of the company to claim
compensation from the violator.
Article 232
The Chairman of the Board and the Board members shall be liable towards the company,
the shareholders and others, for all the acts of fraud and abuse of power, for any violation to
the Law or to the Memorandum of the Company and for mismanagement.
A ballot by the General Assembly to discharge the Board of Directors shall not prevent the
bringing of a liability action, and the members of the Board shall not vote on the decisions of
the General Assembly related to their discharge from liability for their management or related
to a special benefit for them, their spouses or their first degree relatives, or related to a dispute
between them and the company.
Article 233
The liability set forth in the preceding article shall be either a personal liability affecting a
particular member or a joint liability among all members of the Board. In the last case, the
members shall be jointly liable for the payment of compensation, unless a team thereof
objected to the decision that entailed the liability and stated his objection in the minutes.
Article 234
The company may bring liability lawsuit against the members of the Board because of the
mistakes resulting into damage to the company. Should the company be under liquidation, the
liquidator shall take charge of bringing the lawsuit.
Article 235
Every shareholder may bring liability lawsuit alone on behalf of the company in case said
company fails to do so. In such event, the company shall be contesting in the lawsuit to be
granted compensation, if necessary. The shareholder may bring his personal lawsuit claiming
compensation in case the mistake caused damage thereto. Any condition in the Memorandum
of the Company stipulating otherwise shall be null and void.
Article 236
The liability lawsuit shall abate after five years from the date of holding the Ordinary
General Assembly that issued its decision to discharge the Board or prove the mistake thereof.
However, should the act attributed to the Board members be a criminal offense, then the
lawsuit shall only abate by the abatement of the penal lawsuit.
Chapter 9
b- General Assembly
Article 237
The annual Ordinary General Assembly shall hold a meeting at the invitation of the Board
of Directors within three months following the end of the fiscal year, in the time and place
specified in the Memorandum of the Company. The Board may invite the Assembly for a
meeting whenever necessary and it may hold the meeting upon a justified request of a number
of shareholders owning ten percent of the company's capital, or at the request of the auditor,
within fifteen days from the date of request. The authority convening the meeting shall
prepare the agenda.
The provisions related to the Constituent Assembly shall be applied on the procedures of
invitation to the Assembly, the attendance quorum and the voting.
Article 238
The Ministry may invite the General Assembly for a meeting in one of the following cases:
1- If the convocation of the Assembly meeting was not sent by the Board of Directors for
any reason whatsoever in the cases where it is necessary that the Board invites the
Assembly for a meeting.

2- If the Ministry finds any violations to the Law, the Memorandum of the Company or
for any other reason it deems.
3- At the request of any other control authority.
The Ministry shall replace the Board of Directors in taking the necessary measures to hold
the meeting and it may chair the meeting unless the Assembly elects one of the shareholders
for this purpose.
Article 239
Every shareholder, regardless of the number of his shares, shall have the right to attend the
General Assembly and shall have a number of votes equivalent to the number of votes
decided for the same class of shares. The shareholder shall not have the right to vote for
himself or for his representative in the matters related to his interest, or related to a dispute
arising between him and the company. Any condition or decision stipulating otherwise shall
be considered null and void. The shareholder may appoint others to represent him in the
attendance, by virtue of a special power of attorney or authorization prepared by the company
for this purpose.
Whoever claims a right on the shares that contradicts the register of the company's
shareholders, may apply to the ad hoc judge to procure an order on petition preventing the
shares disputed upon from voting, for a period specified by the ordering judge or until
settlement of the dispute by the competent Court, according to the procedures prescribed in
the Civil and Commercial Procedure Law.
Article 240
Voting for the candidates for the Board membership of Public Joint Stock Companies shall
be subject to the cumulative voting system, granting each shareholder a voting ability
equivalent to the number of shares owned thereby, so he is entitled to vote for one candidate
or distribute his votes among the candidates he selects without repetition of these votes.
Article 241
The General Assembly meeting shall be presided by the Chairman of the Board, the ViceChairman, whoever appointed by the Board of Directors for this purpose or whoever elected
by the General Assembly, whether from shareholders or others.
Article 242
Without prejudice to the provisions of the Law and the Memorandum of the Company, the
Ordinary General Assembly shall be responsible, in its annual meeting, for taking decisions in
the matters included in its competencies, and particularly the following:
1- Report of the Board of Directors on the company's activity and financial standing for
the ended fiscal year.
2- Auditor's report on the company's financial statements.
3- Report on any violations caught by the control authorities and regarding which they
imposed penalties on the company.
4- The company's financial statements.
5- The suggestions of the Board of Directors concerning the distribution of profits.
6- Discharge of the members of the Board.
7- Election or dismissal of the members of the Board and determination of their
remunerations.
8- Appointment of the company's auditor, determination of his fees or authorization of the
Board of Directors to do the same.
9- Appointment of the Sharia Supervisory Board for the companies operating according to
the provisions of the Islamic Sharia and hearing the report of the same.
10- Report on the transactions made or to be made with the relevant parties according to
the international accounting principles.
Article 243
The dismissal of the Chairman or one or more members of the Board or the dissolution of
the Board of a company and election of a new Board of Directors shall be allowed by a

decision issued by the Ordinary General Assembly, upon a suggestion submitted by a number
of shareholders owning not less than a quarter of the company's issued capital.
Upon the issuance of a decision to dissolve the Board of Directors and if it was impossible
to elect a new Board in the same meeting, the Assembly shall decide that the current Board
proceeds with the running of the company's affairs until the election of a new Board or it
appoints a temporary administrative committee with the main task to invite the Assembly to
elect the new Board of Directors within one month from the appointment thereof.
Article 244
The Ordinary General Assembly shall not discuss issues not listed on the agenda unless
they are urgent and occurred after the preparation of the agenda or revealed during the
meeting, or should it be required by any control authority, the auditor or a number of
shareholders owning five percent of the company's capital. If, during discussion, it was found
that the information related to some of the submitted issues are not sufficient, the meeting
shall be deferred for a period not exceeding ten working days if required by a number of
shareholders representing a quarter of the shares of the issued capital. The deferred meeting
shall be held without the need to take new invitation procedures.
Article 245
The Board of Directors shall implement the decisions of the General Assembly unless they
are contrary to the Law or the Memorandum of the Company or objected by the control
authorities with a justified decision stating the violation aspect, and that within fifteen days
from the date of notification in the minutes of the meeting.
The Board of Directors shall resubmit the decisions it deems as contrary to the Law or the
Memorandum of the Company, to the Assembly, in a meeting convened for the discussion of
the violation aspects.
Article 246
The provisions related to the Ordinary General Assembly shall be applied on the
Extraordinary General Assembly, without prejudice to the provisions set forth in the
following Articles:
Article 247
The Extraordinary General Assembly shall hold a meeting at the invitation of the Board of
Directors or upon a justified request from shareholders representing fifteen percent of the
issued capital of the company or from the Ministry. The Board of Directors shall call the
Extraordinary General Assembly for a meeting within thirty days from the date of submitting
the request.
If the Board of Directors does not invite the Assembly within the period set forth in the
preceding paragraph, the Ministry shall convene the meeting within fifteen days from the date
of expiry of the period set forth in the preceding paragraph.
Article 248
The Extraordinary General Assembly meeting shall not be considered valid unless attended
by shareholders representing three quarters of the issued capital of the company. Should the
quorum fail to be constituted, the invitation shall be sent for a second meeting that will be
considered valid if attended by the representatives of more than half of the issued capital.
The decisions shall be issued by a majority exceeding half the total shares of the company's
issued capital.
Article 249
Taking into account the other competencies prescribed by the Law, the Extraordinary
General Assembly shall be specialized in the following matters:
1- Amendment of the Memorandum of the Company.
2- Sale of the whole project for which the company was established or the disposal
thereof in any other way.
3- Dissolution, merger, conversion or division of the company.
4- Increase or decrease of the company's capital.

Article 250
Every decision issued by the Extraordinary General Assembly shall only be effective after
the approval of the control authorities and taking the declaration procedures.
The approval of the Ministry shall be obtained if the decision is related to the company's
name, objectives or capital, except for the increase of the capital through the issuance of
shares against profits achieved by the company or as a result of addition of its usable reserves
to the capital.
Article 251
Every shareholder may bring an action in nullity against any decision that is issued by the
Board of Directors, the Ordinary or Extraordinary General Assembly and violating the Law or
the Memorandum of the Company or was intended to damage the company's interests, and
may claim compensation when appropriate. The action in nullity shall abate after two months
from the date of issuance of the Assemblys decision or the knowledge of the shareholder of
the Board's decision.
The decisions of the Ordinary and Extraordinary General Assembly causing prejudice to
the rights of the minority may be appealed by a number of shareholders owning fifteen
percent of the company's issued capital and they shall not be among the shareholders who
approved such decisions. This action shall abate after two months from the date of the
Assembly's decision. In such event, the Court may support, amend or cancel the decisions or
postpone their implementation until the proper settlement for the purchase of the objectors'
shares, provided that these shares are not purchased from the company's capital.
Chapter 10
Company's Accounts
Article 252
The company shall have a fiscal year of minimum twelve months, of which the beginning
and the end are specified in the Memorandum of the Company, except for the first fiscal year
that starts on the date of registration of the company in the Commercial Register and ends on
the date fixed for the end of the following fiscal year.
The Board of Directors shall prepare an annual report for the ended fiscal year and the
Implementing Regulation shall specify the details thereof.
Article 253
A rate of not less than ten percent of the net profits shall be deducted annually, by a
decision issued by the Ordinary General Assembly, upon the suggestion of the Board of
Directors, to form the statutory reserve of the company.
The Assembly may stop the deduction should the statutory reserve exceed half the
company's issued capital.
The statutory reserve shall only be used to cover the company's losses or to ensure the
distribution of profits to the shareholders by a rate not exceeding five percent of the paid-up
capital during the years in which the company's profits do not allow the distribution of such
rate, due to the lack of an optional reserve that allows the distribution of such rate of profits.
The deducted amounts shall be returned to the statutory reserve when the profits of the
following years allow so, unless this reserve exceeds half the issued capital.
Article 254
A percentage specified in the Memorandum of the Company or the Board of Directors shall
be deducted annually, after consulting the auditor, for the depreciation of the company's assets
or compensation for the decrease of the value thereof. These amounts shall be used for the
purchase or repair of necessary materials, machinery and facilities and they shall not be
distributed to the shareholders.
Article 255
The Ordinary General Assembly shall decide to deduct a rate of the profits to meet the
company's obligations by virtue of the Labour Law and Social Security Law.

The Memorandum of the Company shall provide for the establishment of a special fund to
help the company's employees and workers.
Article 256
A rate not exceeding ten percent of the net profits shall be deducted annually, by a decision
issued by the Ordinary General Assembly, upon the suggestion of the Board of Directors, to
form an optional reserve allocated for the purposes specified by the Assembly.
Article 257
Without prejudice to the provisions set forth in the Memorandum of the Company, the
Ordinary General Assembly may, upon the suggestion of the Board of Directors, distribute
profits to the shareholders by the end of the fiscal year. This distribution shall be of real
profits, according to the generally accepted accounting principles, and shall not affect the
company's paid-up capital.
Chapter 11
Auditor
Article 258
Without prejudice to the provisions of said Kuwait Law No. 7/2010, the Public Joint Stock
Company shall have one or more auditors appointed by the Ordinary General Assembly after
the approval of the Central Bank of Kuwait for the companies under its control. The
company's founders may appoint one or more auditors until the holding of the Constituent
Assembly.
The Board of Directors may, in exceptional and urgent cases in which the auditor
appointed by the Assembly does not engage in his task for any reason whatsoever, appoint a
replacement provided that this matter is discussed in the first meeting held by the Assembly
for decide thereon.
Article 259
The auditor shall not be Chairman or member of the Board of Directors of the company
whose accounts are revised by him, nor be engaged in any administrative work thereof or
supervising its accounts. He shall also not be a relative up to whoever supervises the
company's management or accounts up to the second degree of kinship. Furthermore, he shall
not have the right to purchase or sell the shares of said company during the auditing period or
carry out any consultation work for the company.
Article 260
The auditor shall have the right, at any time, to access all the company's books, records and
documents, to request the data he considers necessary to be obtained and to verify the
company's assets and liabilities.
In case he was not enabled to use such rights, he shall prove the same in a report written
and submitted to the Board of Directors to be shown to the Ordinary General Assembly and
notified to the Ministry and the Authority.
Article 261
The auditor or one of the accountants representing him and who participated with him in
the auditing work, may attend the Ordinary General Assembly meetings and submit a report
on the company's financial statements and stipulating if these statements show the financial
standing of the company by the end of the fiscal year as well as the results of the company's
activities for said year. He shall also indicate if the statements of the report of the Board of
Directors are consistent with the company's books and documents, according to the generally
accepted accounting principles and the provisions of law.
Should the company have more than one auditor, they shall prepare a consolidated report
and in case of differences concerning some matters, this shall be established in the report,
while stating the point of view of each of them.
The report shall, in particular, include the following data:

1- If the auditor has obtained the information he deems necessary for the performance of

his task.
2- If the balance sheet and the profit and loss accounts are consistent with the reality,

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include the stipulations of the Law and the Memorandum of the Company and express
fairly and clearly the true financial standing of the company.
If the company holds regular accounts.
If the stock was taken in the proper form.
If the data contained in the report of the Board of Directors are in accordance with the
content of the company's books.
If violations to the provisions of the Law or the Memorandum of the Company
occurred during the fiscal year, with an indication whether this violation still exists,
within the limits of information that were made available to him .
Any other data set forth in the Implementing Regulation.

Article 262
The auditor shall maintain, during and after termination of his work at the company,
confidentiality of the data and information put at his disposal by virtue of his function. He
shall not use these data and information to achieve his own benefit of the benefit of third
parties and shall not reveal any secrets related to the company.
Should the auditor violate his obligations set forth in the preceding paragraph, he may be
isolated and asked for compensation when necessary.
Article 263
The auditor shall be responsible for the financial statements contained in his report and for
any damage caused to the company, shareholders or others because of the mistakes
committed by him during and because of his function. If the company has more than one
auditor, they shall be jointly held liable unless one of them proves that he is not involved in
the mistake subject to liability.
The auditor shall also be liable for the damage incurred by the company as a result of his
resignation at an inconvenient time.
Each shareholder may, during the Ordinary General Assembly, discuss with the auditor and
seek clarification from him about the content of his report.
Article 264
The Board of Directors or a number of shareholders representing twenty-five percent of the
issued capital may request the replacement of the auditor during the fiscal year.
Every decision taken with regard to his replacement without following the procedures
prescribed by the Implementing Regulation shall be considered null and void.

Book 10
Closed Joint Stock Company
Article 265
The subscription to the shares of the capital of the Closed Joint Stock Company shall be
limited to the founders thereof. Except for the provisions set forth in this Book, all the
provisions related to Public Joint Stock Companies shall be applied on the Closed Joint Stock
Companies.
Article 266
For other than the monopoly companies, Closed Joint Stock Companies may be
established, without the need to obtain a decision from the Minister, by an official and
authenticated document issued by all founders who shall not be less than five. This document
shall include the Memorandum of the Company and the following acknowledgments:
1- That the founders have subscribed to all the shares and deposited the amount required
to be paid by the Law, at one of the local banks, at the disposal of the company.

2- That the shares in kind were evaluated according to the provisions of law and were

completely fulfilled.
3- That the founders appointed the necessary administrative services for the company.
4- A copy of the papers and documents supporting the above-mentioned

acknowledgments shall be kept with the official document.

In all events, the company's name shall be followed by the expression (Closed Kuwaiti
Joint Stock Company) or (KJSC Closed).
Article 267
The Closed Joint Stock Company shall not have a legal personality and shall not start its
operations till after the date of publication.
Article 268
The invitation to attend the Constituent Assembly meeting shall be sent containing the
agenda, time and place of the meeting, in one of the following manners:
1- Through registered letters sent to all subscribers two weeks at least before the date
specified for the meeting.
2- Through advertisement, and the advertisement shall be made at least twice, provided
that at the second time it is made within a period of maximum seven days from the date
of publication of the first advertisement and seven days at least before holding the
meeting.
3- Through hand delivery to the shareholders or their legal representatives one day at least
before the date of the meeting. The copy of the invitation shall be annotated of
acknowledgment of receipt. The Implementing Regulation may include other ways of
invitation for a meeting through any of the modern means of communication.
Article 269
With the exception of the companies listed in the stock exchange, the Memorandum of the
Closed Joint Stock Company may include the restriction of the right of the shareholder to
dispose of his shares by both or one of the following restrictions:
1- The priority right of the company's shareholders to purchase the shares that the owner
wishes to sell.
2- Approval of the Board of Directors on the purchaser of shares.
The disposals set forth in Article 172 hereof shall be exempted from these two restrictions.
Should the Memorandum of the Company include any of these restrictions, the company
shall not be listed in the stock exchange.
Article 270
If the Memorandum of the Closed Joint Stock Company includes a text concerning the
priority of the shareholders to purchase shares, the shareholder shall, before disposing of the
same, notify the company of the sale conditions. The disposal of shares shall only be valid ten
days following the date of notification without any of the shareholders submitting a request to
purchase the shares. If one of the shareholders submits a request to purchase the shares, this
shall be at the price stated in the sale conditions.
Article 271
Without prejudice to the provisions related to the company purchasing its shares, should
the Memorandum of the Closed Joint Stock Company require the approval of the Board of
Directors upon the purchaser of the shares, the Board shall, in case of rejecting the purchaser,
purchase the shares for the company's account within ten days from the date of notifying the
Board of the application for approval. In such event, the purchase shall be made at the rate
agreed upon by the shareholder to sell his shares.
Article 272
If it was decided to increase the company's capital and some shareholders did not exercise
their priority right of subscription to the shares of the capital increase, the unsubscribed shares
shall be allocated to the company's shareholders who wish to subscribe thereto. If the

subscription requests exceed the number of offered shares, they shall be allocated to the
subscribers at the rate of subscription undertaken by each.
In all the cases where the new shares were not fully subscribed, the Board of Directors may
allocate the unsubscribed shares to new shareholders and the new unsubscribed shares shall
be nullified by force of law.
Article 273
The Closed Joint Stock Company, of which the ban period for the disposal of its shares had
expired, may be authorized to increase the capital through public subscription, according to a
decision issued by the Ministry based on the Authority's approval. The consent of the Central
Bank of Kuwait shall be obtained if the company is subject to the control thereof.
The company shall be considered Converted to a Public Joint Stock Company with effect
from the date of issuance of the Minister's decision authorizing the increase of its capital
through public subscription.
In all cases, every Closed Joint Stock company that listed its shares for circulation in the
stock exchange shall be considered a Public Joint stock Company from the listing date. This
provision shall be applied on the Closed Joint Stock Companies listed in the stock exchange
when the present Law enters into force.

Book 11
Holding Company
Article 274
The Holding Company is the company whose objective is to invest in the shares, stocks or
investment units of Kuwaiti or foreign companies or funds, or to participate in the
establishment of such companies, lend and sponsor the same before third parties.
Article 275
The Holding Company shall take one of the following forms:
1- Closed Joint Stock Company.
2- Closed Limited Liability Company.
3- Single Person Company.
The expression (Holding Company) shall be mentioned in all the papers, announcements,
correspondences and all the documents issued by the company next to the trade name thereof.
Article 276
The Holding Company shall be established in one of the following ways:
1- Establishment of a company whose objectives are limited to any of the activities set
forth in Article 274.
2- Establishment of subsidiaries or acquisition of shares or stocks in companies to carry
out such objectives.
3- Amendment of the objectives of an existing company to a holding company according
to the provisions of this Law.
Article 277
Without prejudice to the previous Article, the Holding Company may carry out all or some
of the following activities:
1- Management of its subsidiaries or participation in the management of other companies
in which it holds shares and providing the necessary support for the same.
2- Investment of its funds to trade in the other shares, bonds and securities.
3- Acquisition of the real estates and movables necessary for the exercise of its activity
within the limits allowed by Law.
4- Financing or lending the companies in which it holds shares and sponsoring them
before third parties. In such event, the contribution rate of the Holding Company in the
capital of the borrowing company shall not be less than twenty percent.

5- Acquisition of intellectual property rights, invention patents, trademarks, industrial

forms, privilege rights and other intangible rights, using and renting the same to their
subsidiaries or to third parties, inside or outside Kuwait.
Article 278
The Holding Company shall prepare, at the end of every fiscal year, the consolidated
balance sheet and profit and loss statements for its entity as well as for all its subsidiaries,
accompanied with the clarifications and the data as required by the international accounting
standards.
Article 279
The Holding Company shall be subject to the provisions of the company whose form was
taken thereby to the extent that does not conflict with the provisions of this Book.
Article 280
Should the funds of the subsidiary be not sufficient to meet its obligations, the Holding
Company shall be jointly liable for meeting the obligations of the subsidiary in any of the
following cases:
1- If the holding company and its subsidiary exercise the activity as a single economic
unit.
2- If the subsidiary operates as an interface for the holding company.
3- If the subsidiary exercises the commercial activity as a commercial agent for the
Holding Company.

Book 12
Companies' Conversion, Merger, Division and Termination
Chapter 1
Conversion of Companies
Article 281
Taking into account the provisions stated in this Law, any company may be converted from
one legal form to another and the conversion shall be by a decision issued according to the
provisions and procedures decided for the amendment of the Memorandum of the Company,
provided that at least two fiscal years had passed since its registration in the Commercial
Register.
The company shall only be converted after fulfilling the establishment procedures for the
form to be converted to, after implementing the publication and declaration procedures and
after preparing a report approved by the Ministry and the auditor to evaluate the company's
assets and liabilities in accordance with the provisions of assessment of the shares in kind
stated in the first Paragraph of Article 11 hereof.
The Implementing Regulation shall specify the conversion conditions and procedures.
Article 282
The partner who objects to the decision of conversion of the company may withdraw from
the latter and recover the value of his quotas or shares through an application submitted to the
company within sixty days from the date of registration. The payment shall be made
according to the actual value of the quotas or shares contained in the assessment report set
forth in the preceding article.
Article 283
The conversion of the company does not entail its acquisition of a new legal personality
and it shall keep the same rights and obligations prior to the conversion. As for the obligations
of the joint partners prior to the conversion of the company, the right of the creditor to this
guarantee shall lapse if the conversion decision was not objected within thirty days from the

date of its publication in the Official Gazette. The objection shall be submitted in the usual
procedures of filing a lawsuit and shall be reviewed by the Court of First Instance. The
submittal of objection shall entail the continuity of commitment of the joint partners in facing
this creditor until his objection is settled by a final judgment.
The partners or shareholders who objected to the conversion decision within the period set
forth in the preceding Paragraph may request their dissociation from the company according
to the assessment made in Article 281.
Article 284
In the event of conversion, every partner shall have a number of shares in the converted
company equivalent to the value of his shares in the company before the conversion. Should
the conversion be to a limited liability company and the value of the shares of a partner in the
company before conversion is less than the minimum limit decided for the nominal value of
the share in the limited liability company, he shall complete this value in cash.
Article 285
The conversion of a Joint Stock Company that borrowed by issuing bonds, shall be
approved by the Authority of Bonds Holders by the majority of the holders of two thirds of
such bonds and if the approval was not obtained with the said majority for the conversion or
the settlement offered thereto by the company, the representative of the Authority of the
Bonds Holders shall file the matter to the Court of First Instance within thirty days from the
date of publication of the conversion decision. Filing the lawsuit shall not entail the
suspension of the conversion procedures.
The Court may reject the objection or compel the converted company to pay the value of
the bonds according to the issuance conditions or compel the converted company to provide
sufficient guarantees to settle their value.
Chapter 2
Merger of Companies
Article 286
The company may, even if under liquidation, merge into another company of the same or
of a different legal form and the merger shall be in one of the following methods:
1- Absorption merger, i.e. by the dissolution of one company or more and transfer of its
financial liability to an existing company.
2- Combination merger, i.e. by the dissolution of two companies or more or the
establishment of a new company to which all financial liabilities of the merged
companies are transferred.
3- Division and absorption merger, i.e. by the division of a company into two parts or
more and transfer of each part thereof to an existing company.
The Implementing Regulation shall regulate the merger procedures, terms and conditions,
taking into consideration the provisions set forth in the following articles:
Article 287
Absorption merger shall be made according to the following procedures:
1- A decision shall be issued by the merged company for the dissolution thereof.
2- Evaluation of the net assets of the merged company according to the provisions of
evaluation of the shares in kind set forth in Article 11 hereof.
3- The merging company shall issue a decision to increase its capital according to the
evaluation of the merged company.
4- The capital increase shall be distributed between the partners in the merged company
proportionately to the shares owned by each one of them.
5- If the new quotas are represented by shares and the periods set forth in this Law after
the establishment of the merging company for trading in the company's shares have
lapsed, these shares may be traded upon their mere issuance according to the
provisions prescribed in this Law concerning the trade in the company's shares.

Article 288
Combination merger shall be made according to the following procedures:
1- A decision shall be issued by each of the merged companies for the dissolution thereof.
2- The new company shall be established according to the conditions set forth in this Law.
However, if the new company is a Joint Stock Company, the report of assessment of
the shares in kind prepared according to the provisions of Article 11 hereof shall be
taken into consideration without the need to submit the matter to the Constituent
Assembly.
3- Each merged company shall have a number of quotas or shares equal to its shares in
the capital of the new company. These quotas or shares shall be distributed to the
partners in each merged company proportionately to their shares therein.
Should the quotas of the new company be represented by shares and the periods set forth in
this Law for the trading of the company's shares after the establishment of each of the merged
companies have lapsed, these shares may be traded upon their mere issuance.
Article 289
The merger shall be published and the merger decision shall only be implemented after
thirty days from the date of its publication in the Official Gazette. The creditors of the merged
company may, during the prescribed period, object to the merger of the company by means of
an official warning. The merger shall remain suspended unless the creditor waives his
objection, rejects it by a final judgment or the company settles the debt if it is matured or
submits guarantees for settlement thereof if it is deferred. If no objection was submitted
within the said period, the merger shall be considered final.
Article 290
The merger of the Joint Stock Company that has issued bonds or Sukuk shall be approved
by the Authority of Bond or sukuk holders by the majority representing two thirds of the
bonds or sukuk; otherwise, the company shall settle the debt with the approval of the
Authority of Bond or sukuk holders with the said majority.
The representative of the Authority of Bond or sukuk holders may object to the merger
decision according to the provisions of the previous Article.
Article 291
Without prejudice to the provisions of the preceding Article, if the Joint Stock Companies
involved in the merger had issued bonds or Sukuk that can be converted into shares, these
bond or sukuk holders shall have the right to request their conversion into shares in the
merging company or the new company as the case may be, during the period decided for the
issuance of the bonds or Sukuk. The conversion basis shall be specified according to the
exchange ratio in the issuance regulation at light of the rate stated in the merger agreement
related to the replacement of the shares of the company issuing the bonds or Sukuk with
shares in the merging company or the new company.
Article 292
Should the merger increase the financial burdens of the partners or shareholders or
prejudice their rights in any of the companies involved in the merger, all the partners or
shareholders in the company shall approve the merger decision.
In case of objection of one of the partners or shareholders upon the merger decision, he
shall be subject to the provisions of Article 282 hereof.
Article 293
In case of merger by absorption or combination, the merging company or new company
shall replace the merged companies in all their rights and obligations. In case of merger by
division and absorption, the merging companies shall be jointly liable for the obligations of
the divided company prior to the merger.
Chapter 3
Division of Companies

Article 294
The company may, even if under liquidation, be divided into two or more companies with
the termination or continuity of the company. The companies arising from the division may
take any of the legal forms of companies.
The decision of the company's division shall be issued by the Extraordinary General
Assembly, including the number and names of the shareholders or partners as well as the
shares of each in the companies resulting from the division, the rights and obligations of such
companies and the method of distribution of the assets and liabilities between them.
The Implementing Regulation shall specify the division procedures, terms and conditions.
Article 295
The companies arising from division shall be considered successor of the company subject
to division and shall replace it legally within the limits of the outgrowth transferred thereto by
said company according to the division decision. The company's creditors and shareholders
shall have the right to object to the division decision and the company shall be subject to the
provisions set forth in Article 289 hereof.
Article 296
The shares of any of the companies arising from division may be traded by mere issuance
thereof should the shares of the company subject to division be negotiable upon issuance of
the division decision and if the company arising from division meets the conditions necessary
for share trading.
Chapter 4
Termination and Liquidation of the Company
Dissolution of the Company
Article 297
Taking into consideration the reasons of termination related to each type of companies, the
company shall be dissolved for any of the following reasons:
1- Expiry of the period specified in the Memorandum of the Company, unless it is
renewed according to the rules set forth in the Memorandum or in this Law.
2- Completion or impossibility of the objective for which the company was established.
3- Loss of all or the majority of the company's funds so that the rest cannot be seriously
invested.
4- Consensus of the partners to dissolve the company before expiry of its period unless
the Memorandum of the Company stipulates a certain majority.
5- Merger of the company in another company.
6- Adjudication of the company's bankruptcy.
7- Issuance of a decision for the cancellation of the company's license for not exercising
its activity or for not issuing its financial statements for three consecutive years.
8- Issuance of a Court ruling to dissolve the company.
Article 298
The company shall be terminated in case of decease of a partner in a Joint Liability
Company or a Particular Partnership Company, decease of a joint partner in a Limited
Partnership Company or an Equities Partnership Company or issuance of a judgment for the
seizure or bankruptcy thereof, unless the Memorandum of the Company stipulates its
continuity with the remaining partners.
In all the cases of the companys continuity with the remaining partners, the share of the
partner who withdrew from the company shall be evaluated and calculated on the date of
achievement of the reason that led to the withdrawal of the partner from the company
according to the provisions of assessment of the shares in kind set forth in the first Paragraph
of Article 11 hereof.

Notwithstanding the provisions of the preceding paragraph and in companies other than the
Particular Partnership Companies, the heirs of the deceased partner may proceed with the
company as silent partners. In such event, the Joint Liability Company shall be converted into
a Limited Partnership Company by force of law.
Article 299
The Joint Liability Companies or Limited Partnership Companies shall be terminated
should the shares of one partner be attached and the partners did not agree that the best bidder
joins the company as a partner and the company or partners did not retrieve the shares or fulfil
the rights of the attaching creditor.
The same provision shall apply on the Equities Partnership Company should the shares of
the joint partner be attached.
Article 300
With the exception of Joint Stock Companies, the company may be dissolved by a Court
judgment if required by one of the partners for the non-fulfilment of the undertakings of one
partner or for any other reason estimated by the Court as being very serious necessitating
dissolution. Any agreement stipulating otherwise shall be considered null and void.
Article 301
If the decease, seizure or bankruptcy includes all the joint partners in a Limited Partnership
Company or an Equities Partnership Company, the company shall be dissolved unless the
partners or shareholders convert the same to a company of another type within six months.
Article 302
If the losses of a Joint Stock Company reach three quarters of the paid-up capital, the
members of the Board of Directors shall convene the Extraordinary General Assembly to
consider the continuity or dissolution of the company before the term specified in its
Memorandum or take other appropriate measures.
Should the Board of Directors fail to convene the Extraordinary General Assembly or
should it be impossible to issue a decision in this regard, the Ministry and all stakeholders
may request the competent Court to dissolve the company.
Article 303
The Limited Liability Company shall not be terminated by the decease, seizure or
bankruptcy of one of the partners, unless the Memorandum of the Company stipulates
otherwise.
Article 304
Should the loss of a Limited Liability Company reach three quarters of the capital, the
directors shall, within thirty days from the date the loss reaches this limit, suggest to the
Extraordinary General Assembly to cover the capital or dissolve the company, or take other
appropriate measures.
Should the directors fail to invite the partners or the partners fail to reach a decision in this
regard, the director or the partners, as the case may be, shall be jointly liable for the
obligations of the company resulting from their neglect.
Article 305
The Single Person Company shall be terminated by the decease of the capital owner unless
the shares of the heirs are limited to one person or if the heirs choose to proceed with the
company in another legal form, all within six months from the date of decease. The company
shall also be terminated with the termination of the legal person owner of the company's
capital.
Article 306
Without prejudice to the provisions of Article 297, the professional company shall be
terminated if it was limited, for any reason whatsoever, to one partner, unless this partner
allows another partner or more to join the company within a period of six months.

Article 307
Taking into consideration the minimum number of partners in a professional company, the
latter shall not be terminated by the decease or withdrawal of one of the partners or by losing
their capacity to exercise the profession.
In case of decease, the share shall not be transferred to the heirs who shall have the right to
recover its value according to the provisions of the first paragraph of Article 11 hereof. The
partners may agree that the heir who meets the partnership conditions replaces their legator in
case the heir wishes to join the company, all without prejudice to the rights of the other heirs
towards that particular heir. The same provision shall be applied in terms of recovery of the
share if one of the partners loses the capacity to exercise the profession.
Article 308
With the exception of the Particular Partnership Companies, the termination of the
company shall be published. No objection shall be made towards others concerning the
termination of the company unless from the date of publication. The directors of the company
or the Chairman of the Board, as the case may be, may follow the implementation of this
procedure.
b- Liquidation
Article 309
Upon mere dissolution, the company shall be considered under liquidation and shall
preserve, during the liquidation period, the legal personality to the extent necessary for the
completion of liquidation. The expression "under liquidation" shall be added to the name of
the company, written in a clear manner in the correspondences issued by the latter.
The company's liquidation shall be subject to the provisions set forth in the following
Articles unless the Memorandum of the Company stipulates otherwise.
Article 310
The terms of all debts due from the company shall extinguish from the date of
announcement of the dissolution of the company and the notification of the creditors of
opening the liquidation. The liquidator shall officially warn all creditors of the opening of the
liquidation, inviting them to submit their applications. The creditors may be notified through
announcement and in all cases the warning or announcement shall include a period of at least
thirty days for the creditors to submit their applications.
Article 311
Upon termination of the company, the authority of its directors shall end. However, they
shall remain in charge of the company's management until the liquidator is appointed and
exercises his powers. The directors shall be considered liquidators towards third parties until
the appointment of a liquidator.
The company's bodies shall remain valid during the liquidation period and their authorities
shall be limited to the liquidation activities which are not included in the liquidator's
competency.
Article 312
One or more liquidators shall be appointed among the partners or others according to the
conditions and rules set forth in the Memorandum of the Company. If there is no text in this
regard, his appointment and fees as well as the liquidation period shall be specified by the
majority necessary for the amendment of the Memorandum of the Company.
If it was impossible to issue a decision to appoint the liquidator, the Court shall appoint
him at the request of one of the partners or of one of the company's creditors. The Court's
decision shall include the specification of his fees and the liquidation period.
Article 313
The liquidator shall be dismissed by a decision from the competent authority concerned
with his appointment. In all cases, the Court may, at the request of one of the partners or one
of the company's creditors rule to dismiss the liquidator for acceptable reasons.

Any decision or judgment to dismiss the liquidator shall include the appointment of his
substitute. The new liquidator shall publish the decision or the judgment including the
dismissal and his appointment as liquidator before starting his tasks.
Article 314
The liquidator shall publish the decision of his appointment and the restrictions imposed on
his powers, as well as the partners' agreement or the decision of the General Assembly
concerning the method of liquidation or the judgment thereof.
The appointment of the liquidator or the method of liquidation shall not be pleaded by third
parties except from the date of publication.
Article 315
The liquidator shall carry out all the works necessitated by the liquidation of the company
and shall have the right, in particular, to:
1- Represent the company before the Courts and third parties.
2- Do all that is necessary to preserve the company's funds and rights.
3- Pay the company's debts.
4- Sell the company's assets, whether real estate or movable property, in public auction or
by practice or any other way guaranteeing to obtain the highest price, unless the
appointment decision stipulates the sale procedure in a certain manner. However, the
liquidator shall not sell from the company's assets unless required by the liquidation
activities.
5- Divide the net assets among the partners.
The liquidator shall not start new activities unless they were necessary for the completion
of previous works. He shall not sell the company's assets or business concern at once,
reconcile to the company's rights or accept arbitration in the disputes in which the company is
a party unless with a permission from the Court.
Article 316
The company shall be committed to all the activities carried out by the liquidator in its
name or for its account if required by the liquidation and within the limits of his authority.
In case of several liquidators, their acts shall not be binding to the company unless the
decision was taken by absolute majority and unless their appointment decision stipulates
otherwise.
Article 317
The company's directors and Board of Directors shall submit its accounts, books,
documents and funds to the liquidator and if any of them abstains to do so, the liquidator may
apply for procuring an order on petition according to the provisions of the Civil and
Commercial Procedure Law, compelling the company's directors and Board members to do
the above. The liquidator shall, within three months from the date of commencement of his
work, take stock of the company's assets and determine its financial position in a way
guaranteeing its rights and obligations and he may have recourse in this regard to the
company's directors, Board of Directors and auditor, if any. The liquidator shall hold the
accounts necessary for the registration of the liquidation works according to the provisions
related to the holding of commercial books.
Article 318
The liquidator shall complete the liquidation works within the period specified in his
appointment decision. If no period was specified, the Court shall do the same at the request of
the stakeholders.
The period may be extended with the consent of the majority of the partners who have the
right to amend the Memorandum of the Company or by a decision from the Court after
perusing the report of the liquidator on the reasons that prevented the completion of
liquidation within the specified period. Every stakeholder may request the Court to shorten
the liquidation period.
Article 319

If the liquidator estimates that the company's best interest necessitates that it proceeds with
its works for a certain period, he shall, in such event, call the General Assembly or the
partners to meet in order to decide on this matter unless the dissolution of the company was
according to a Court judgment.
Article 320
The liquidator appointed for the liquidation of a Joint Stock Company shall invite the
Ordinary General Assembly to hold a meeting within three months from the end of the fiscal
year, for the purpose of discussing the balance sheet and auditor's report of the ended year as
well as the annual report on the liquidation works and of ratifying the same and appointing an
auditor for the new year. He may also call the Assembly to hold a meeting at any time if
required by the liquidation works.
Article 321
The liquidator shall meet the rights of the company towards others or towards the partners
and deposit the amounts he collected at a bank on behalf of the company under liquidation.
The liquidator shall pay the company's debts and set aside the necessary funds to pay the
debts disputed upon. The debts of the company shall be paid in the following order:
1- Financial obligations resulting from the liquidation operations.
2- All the amounts due to the company's workers.
3- Privileged debts in the order of their levels.
4- Collateralized debts within the limits of the collateral.
The remainder of the money after payment of the above-mentioned debts shall be paid to
the ordinary creditors. If the remainder is not sufficient to settle all these debts, the money
shall be apportioned thereto according to the pro rata partition.
Article 322
Taking into consideration the rights decided for the preference shareholders, the liquidator
shall divide the remainder of the company's money after settlement of their debts between the
partners. Each partner shall receive a share that is commensurate with the value of the capital.
If the share provided by the partner is for mere usufruct of funds, the partner shall recover
such funds unless they were lost during the use thereof then the value of the same shall be
returned thereto at the time of loss.
In case some funds remained, they shall be distributed among all partners proportionately
to their share in the profits.
Should the net company's funds be insufficient to settle the partners' shares, they shall be
deducted from the partners' shares according to the rate agreed upon in the distribution of
losses.
In all the events where the company's funds are insufficient to settle its debts, the liquidator
may take the measures prescribed by the Law to declare the company's bankruptcy.
Article 323
The liquidator shall provide the General Assembly of the shareholders or partners having
the right to amend the Memorandum of the Company, with a final account on the company's
liquidation and division of the funds thereof. The liquidation works shall be completed upon
ratification of the final account by this Assembly.
The liquidator shall publish the completion of liquidation and no third parties shall have the
right to raise an objection to the liquidation unless from the date of declaration.
The liquidator may request the removal of the company's registration from the Commercial
Register after completion of the liquidation.
Article 324
The books and documents relating to the liquidation of the company shall be preserved for
a period of ten years from the date of removing the companys registration from the
Commercial Register, at the place specified by the authority who appointed the liquidator.
Article 325

The liquidator shall be asked to compensate for the damage occurring to the company, the
partners or third parties as a result of exceeding the limits of his authority or due to the
mistakes committed during the performance of his work. In case of multiple liquidators, they
shall be jointly liable.
Article 326
The lawsuit against the liquidator because of the liquidation works shall not be heard after
three years from the declaration of the liquidation completion. It shall not be heard also after
expiry of said period because of the company's works, or when filed against the directors, the
Board of Directors or the auditors by virtue of their functions.

Book 13
Control, Inspection and Penalties
Chapter 1
Control and Inspection
Article 327
Without prejudice to the powers prescribed for the control authorities, the Ministry may
control and inspect the companies and their accounts in all that is related to the
implementation of the provisions of this Law and the Memorandum of the Company, to
ensure they do not violate the provisions of the Law. It may appoint the external auditor of the
company or assign a third party to do so.
The Ministry shall discuss any complaint submitted by a stakeholder concerning the
implementation of the provisions of this Law.
Article 328
If the Ministry finds any violations to the provisions of this Law or the Memorandum of the
Company or that the persons in charge of the company's management or its founders had
acted in a way causing prejudice to the interests of the company, the partners or the
shareholders, or affecting the national economy, it shall convene the Ordinary General
Assembly or the partners' meeting to correct these irregularities within fifteen days from the
date of holding the meeting and notifying the competent investigative authorities thereof.
The Implementing Regulation shall state the procedures of control and inspection and the
method of submitting complaints from the stakeholders.
Article 329
The shareholders or partners owning at least five percent of the company's capital may
request the Ministry to appoint an auditor to conduct an inspection of the company for the
violations attributed to the director, members of the Board, auditor or CEO of the company in
the performance of their obligations whenever they have reasons justifying this request, after
settlement of the fee prescribed by the Implementing Regulation. The applicants shall pay the
auditor's fees.
Article 330
If the Ministry, or one of the control authorities, finds out of the inspection that the
violations attributed to the members of the Board, the auditor, director or CEO are incorrect,
it may publish the inspection report, in whole or in part, in two daily newspapers and on the
website of the company at the expense of the persons requesting the inspection, without
prejudice to their liability for compensation when appropriate.
Article 331
Should the Ministry reject the request of the shareholders or partners to conduct the
inspection, set forth in Article 329 of this Law, those whose request was rejected may submit
a petition to the President of the Court of First Instance to order the required inspection,

assign an expert to carry out this task and specify his fees. These fees shall be borne by the
persons requesting the inspection or by those proved responsible for the violations stated in
the request.
Article 332
Whoever conducts the inspection shall preserve, during and after completion of his work,
the confidentiality of the books and all the documents and information he had access to due to
his task and shall not reveal any secrets related to the company inspected by him, except for
the cases authorized by the Law. He shall be held accountable if he failed to mention correct
facts or proved incorrect facts that may affect the result of the inspection.
Article 333
The company's Chairman, members of the Board, employees, auditor and directors shall
provide the party conducting the inspection with all the books, registers, documents and
information required for the inspection purposes and shall submit copies thereof when
required.
Chapter 2
Penalties
Article 334
Without prejudice to any more severe penalty stipulated by another law, shall be penalized
by imprisonment for a period not exceeding three years and by a fine not less than ten
thousand Dinars and not more than one hundred thousand Dinars, or by either of these
penalties:
1- Whoever proves, in bad faith, in the companys memorandum of association or statute,
the prospectus or any other publications or documents addressed to the public, false
statements or statements that are contrary to the provisions of the Law and whoever
signs, distributes or promotes these documents even after being aware of their
inaccuracy.
2- Whoever addresses an invitation to the public for subscription to the shares or bonds
issued in the name of non-joint stock companies.
3- Whoever evaluates the shares in kind, by fraud, by more than their real value.
4- Every member of the Board, director, auditor or liquidator who participated in the
preparation of the balance sheet, financial standing or statement issued by the
company, which are not consistent with the reality, while being aware of the same,
with the intention to hide the truth of the company's financial standing, or neglected
intentionally substantial facts in order to hide the truth of the company's financial
standing.
5- Every member of the Board, director, auditor or liquidator who distributed or ratified
the distribution of any amounts described as profits, while being aware that the
financial standing of the company does not allow so or in violation to the provisions of
this Law or the Memorandum of the Company.
6- Every member of the Board, director, member of the Control Board, auditor or any
employee at the company or any person assigned to inspect the latter, who reveals, in
cases other than those necessitated by the Law, any secrets he may have obtained by
virtue of his function, or uses these secrets to achieve personal benefits for himself or
for others or to cause damage to the company.
7- Whoever assigned to inspect the company and proves deliberately, in the reports
prepared concerning the result of the inspection, facts that are contrary to the truth, or
fails deliberately to mention substantial facts that may affect the inspection result.
8- Whoever proves or hides deliberately and knowingly any data or information related to
the conditions of nomination to the membership of the Board in the Joint Stock
Company.
Article 335

Without prejudice to any more severe penalty stipulated by another law, shall be penalized
by imprisonment for a period not exceeding one year and by a fine not less than five thousand
Dinars and not more than ten thousand Dinars, or by either of these penalties:
1- Every member of the Board or director who carried out, deliberately or through acts of
fraud, works that may prevent one of the partners or shareholders from participating in
the General Assembly meeting or the partners' meeting of the company.
2- Every member of the Board or director who, deliberately and without an acceptable
excuse, and after one month from being officially warned, fails to hold the General
Assembly meeting or the Partners' meeting in the cases necessitated by the Law.
3- Whoever prevents the auditor, member of the Control Board, receiver, liquidator or the
persons in charge of inspecting the company, from having access to its books and
documents and whoever refrains from providing the information, documents and
clarifications required.
4- Every member of the Board, director or liquidator who takes advantage of his position
in bad faith, to use the company's monies or shares for the purpose of achieving
personal benefits for himself or for others, directly or indirectly.
The Court may, in the crimes stipulated in this Article and the previous Article, rule the
dismissal of a member of the companys board of directors or its director.
Article 336
Without prejudice to any more severe penalty stipulated by another law, shall be penalized
by a fine not less than five thousand Dinars and not more than fifty thousand Dinars, the
company that refrains from correcting the irregularities stated in the Ministry's report
submitted to its General Assembly within the dates specified by the Ministry.
Article 337
The Public Prosecution shall alone investigate, act and prosecute in the crimes set forth in
this Law.
The Minister shall issue a decision to delegate a sufficient number of the Ministry's
employees to supervise the implementation of the provisions of this Law, control the crimes
occurring in violation to the provisions thereof and write reports to prove such crimes.