a. Definition and Characteristics:
The Commercial law defines the Joint Stock Company as being a company composes by a number of persons subscribing in shares, who are liable for the debts of the Company only to the extent of their shares in the capital.
1- Limited liability: The Shareholders are liable only to the extent of their shares in the capital.
2- Legal Status: The Shareholders are not considered Merchants. Thus no special capacity is required.
3- Intuitus Pecuniare: The contributions of the shareholders prevail over the person of the shareholders themselves. Thus the shares are negotiable, In general any shareholder may transfer his shares without the consent of other shareholders. Shares are transferred by the simplified means of commerce. The shares can be registered, to order or bearer shares.
4- Capital: Minimum Capital LBP/30.000.000/ (Around USD/20.000/). All of the share capital should be subscribed to upon Company’s formation, but only 25% of capital must be paid up at the time of subscription. The remaining capital is payable as and when decided by the board of directors.
5- Number of Partners: the Minimum number of Shareholders is three (3), no maximum number.
6- Foreigners: All Shareholders may be foreigners; with the exception of companies seeking to engage in media, real estate, commercial representation, banks, financial institutions, leasing, management concession of a Public Service and insurance. The unlimited foreign participation principle is however mitigated by requirements that majority of the Board of Directors is Lebanese and each member of the board is holder of a limited number of shares.
7- Nationality: Irrespective of the percentage of share capital controlled by non-Lebanese investors, any corporation formed under Lebanese Law is, however, considered a Lebanese Corporation and must have its Head-Office in Lebanon.
8- Appointment of an Attorney and Auditor: the Appointment of an Attorney and an Auditor is a must. An additional Auditor shall be appointed by the Commercial Court. Banks and Financial corporations are exempted from external auditors appointed by the Commercial Court.
9- Administration: the Administration of the Company shall be entrusted to a Board of Directors composed of a minimum of three members and a maximum of twelve. Unless otherwise specified by law, the majority of directors must be Lebanese nationals. The board shall be presided by one of the Directors designated by the board; the Chairman may be a foreign national.
10- Company’s Structure:
• General Meetings of the Shareholders:
i. The constituent Assembly which is held once to confirm the Formation of the Company.
ii. The Ordinary General Meeting which is held at least once per year after closing of the Annual Accounts and may, under special circumstances, be convened once or more during the year provided the object of such meeting does not concern the amendment of the company’s statutes.
iii. The Extraordinary General Meeting shall deliberate on all prospective amendments of the statutes with the exclusion of changing the company’s nationality, increasing the range of liability of shareholders or affecting rights of third parties.
• The Board of Directors: The Board of Directors shall have the broadest powers to implement the resolutions of the General Meetings of shareholders, and to carry out all acts required for the smooth operation of the Company.
11- Publicity: Prior to any call for subscription addressed to the Public, the promoters shall have to insert a publication for this purpose in the Official Gazette and in two newspapers, one of which is a local daily paper and the other an economic paper, including their signatures, addresses, and all other relevant information namely, the name of the Company, its principle office, the location of its branches, its object, term, capital, the value of the allocations in kind, the fixed rate of interest, the mode of distribution of the dividends, the number of Directors, their remuneration and powers as provided for in the statutes.
In addition, the Company’s Annual Accounts, together with the names of its Board Members should be published in the Official Gazette and two other local publications.
A Joint Stock Company shall be founded by, at least three founders. The first act to be done by the founders is the drafting of the Company’s Articles of Association. The founders of a Joint Stock Company shall start the formation procedures by depositing and registering the Articles of Association before a Notary Public and the registration at the Commercial Register upon the subscription of the whole capital of the Company.
1. Information and Documents required:
• The Articles of Association duly signed by the Partners before the Notary Public.
• Full name, nationality, Place and Date of Birth, and the domicile of each of shareholders along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company.
• The minutes of Meeting of the Constituent Assembly Meeting.
• The minutes of the Meeting of the Board of Directors in which the Chairman was elected.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The Commercial Circular showing the name and signature of the Authorized signatory.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the Company and its duration.
Any amendment on the status of the Company should also be registered in the Commercial Register.
2. Registration Procedures and cost:
An Application should be submitted to the relevant Commercial Register along with the Articles of Association and the required documents after the payment of the Financial Tax within five date of the signature of the Articles of Association.
The Official Charges for the registration of a Joint Stock Company at the Commercial Register is estimated as follows:
- Financial Tax: LBP/1.000.000/ (Around USD/667/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/500.000/ (Around USD/334/).
- Official Fees: 5.5/1000 of the Capital Amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Each Certified True Copy of the Registration Documents: LBP/2000/.