Companies contracts


It is said that the companies are 'trading companies' and civil companies, is this true?

Yes and simply: the commercial company is an economical project aiming for profit, and based on money and other things that can be transformed into money .
Civil company depends on physical and intellectual efforts more than money required, and hence is limited to professions and crafts.

May I know the titles of civil companies?
business company
-speculation company.
-trust partnership.
These companies are regulated by  Civil transactions code No 5  of 1985. ( from article 654 to article 709).
Does Notary Public attest and authenticate the contracts of both trading and civil companies?

The Notary public is the competent authority to authenticate contents of civil and commercial companies especially commercial companies which will be proved  by authenticating their memorandum in notary public.
Is there a similarity between the ticks company (speculation) and the joint venture company?

The main similarity is that both companies will not be registered i.e. no license will be issued by economic department, other than this they are totally different .

Why the joint venture company is called so?
Simply because each party (partner) provides a part or share of the capital, and on basis of these shares they divide the profit and bear the losses mostly in one deal . although it is possible that company continue make multiple deals, and the main consideration here is for shares and not for any thing else as this company has no address, no name and no publications, etc

What about the Partnership in commendam?

It is a company with a limited partner and general partner , both participate in the capital with a specific percentage of shares, hence it is different from the speculation company(partnership in commendom)
Limited partner may not intervene in the management of the company
The general partner manages the company.
The limited partner profit obtained according to the percentage of his shares in the capital, and his loss limited to his share in the capital only
The general partner profit determined according to the percentage in capital, but in case of loss he obliges with the loss even from his personal money no matter how much of these losses.
In order to remain in legal status of a limited partner the name of the limited partner may not be mentioned in the company's trade name, either in the company's correspondence  or company's logos or trade marks, and in case he violates that he shall be treated the same as general partner.
Why the vast majority of businesses companies in the country are limited liability companies?
Because the country pursue the principles of free economy.
And because it is attractive and encouraging for foreign investments.
Law permit the non-citizen partner to engage in L.L.C.. by 49% of shares as maximum, for this reason the majority of  commercial companies are L.L.C.

Once a contract of limited liability Company at the Notary Public is attested, Is a company considered to be incorporated?
Yes based on reservation as the company exist according to it's memorandum of association as soon as the shareholders sign it and authentication of  their signatures by notary public is a formal requirement for issuance of  license by economic department.
during the period from signing the memorandum and authentication of it until the issuance of license by economic department the company will still be under the liability of the shareholders i.e. all the business of the company will be within a state of partnership as a real or actual company, and this partnership is based on the fact that the company is commercial and partnership is assumed in commercial activities.

If a limited liability company has a debt and the creditor got a ruling from the Court, and creditor intend to execute the attachment on the company, is it permissible?
Yes if the judgment was against the company by it's trade name.
However if the debt and sentence against a partner in the company, the execution of attachment will be carried only on  his shares in the capital.

What are the titles of trading companies?
1) General partnership
 2) Limited partnership
3) Joint venture
4) Private shareholding
5)  Public shareholding
6) Partnership limited by shares
7) limited liability
These companies are regulated by commercial companies code No 23 of 1982.

What is a tick company (speculation)?

It is a company consisting of two types of partners the partner who is the owner of the capital and he provides the complete capital- the speculant partner and he manages the company work for the return of percentage of the profit and in case of losses the owner of the capital losses money while the speculant losses his efforts.

Professional Company, what is its example?
Advocatory offices, doctors, clinics and engineering consulting offices .
What is a joint liability company?
Partners in general partnership company bear losses of the company from their personal money even when the loss exceeds the capital and take all the assets of the company, partnership is a state where a partner is obliged and liable with all the losses and debts of the company and third parties rights, and not only by the percentage of shares he owns in the capital.
This type of company include risk, hence it is not recommended to be  established , however if partners have kinship or close friendship relations, or has great trust in each other.
This type of companies provides company's clients with security and confidence to deal with especially when it is well-known that they are solvent. One of the obvious security elements of joint companies is that the partners take all possible care of the company and are keen to ensure its success because the company's bankruptcy means their bankruptcy.
There are thousands of companies existing in the country practicing  business, what are their types?

The majority are limited liability companies. 194- Because the country pursue the principles of free economy.
And because it is attractive and encouraging for foreign investments.
Law permit the non-citizen partner to engage in L.L.C.. by 49% of shares as maximum, for this reason the majority of  commercial companies are L.L.C.
I understand that it will be risky to not submit the MoU of a limited liability company immediately to the Economic Department after attesting it, in order to obtain trade license for my company. Is it permissible to run some amendments on the same after the issuance of the license? and How?

Yes, under Appendix amendment can be made for any clause in  the contract as long as it is not related to  the public order or the morals, however  most important cases for amendments are:
1)appointing a manager and determine his powers  and administration fee, or replacement of a manager by other one.
2)increasing or decreasing of capital.
Law regulate the amendment of L.L.C. and it require a quorum of partners while the criterion is the ownership of a specific percentage of shares except if  the memorandum stipulates otherwise a numerical majority of partners. The minimum limit of shares required to amend a memorandum is 75% from the  total value of shares unless the memorandum states a higher rate.
I hear about finance companies, people's companies, what is the difference between them?

Finance companies are limited companies where a lot of persons own shares and they don't know each other, among them some may  be elders or young i.e. adults or minors, males or females, people of high status or from commune and so on. and they circulate their shares (buying or selling) without any obligation to amend the memorandum of association or other procedures.

People companies (main example is general partnership companies) and the most important consideration is for the individuality and personality of each partner , and all of them must be traders and they will be treated as such so a minor may not be a partner in a general partnership company.

L.L.C. includes the former two types, and it is a mixture of finance and people companies.
The criterion for differentiation between finance and people companies is that execution against a debtor partner in a finance company extends to his shares in the company, while the execution against a debtor in a people company reaches him personally , and so the bankruptcy of shareholder in a finance company doesn't extend to bankruptcy of the company and the opposite is true in case of people company partner.