a. Definition and main characteristics:
A Limited Liability Company (s.a.r.l) combines traits from both a partnership and a corporation. It is governed by Decree No. 35 dated 05/07/1967. The main Characteristics of such Entity:
1- Limited liability: The Partners are liable only to the extent of their shares in the capital.
2- Legal Status: The Partners are not considered Merchants. Thus no special capacity is required.
3- Intuitus Personae: The person of the partners is of prime importance and is taken into consideration in the formation of the Company. Therefore the parts are not negotiable and cannot be transferred by one partner to third parties without the consent of a special majority of the other partners. Public Subscription to the parts is strictly prohibited.
4- Capital: Minimum Capital LBP/5.000.000/ (Around USD/3,334/) wholly paid on formation and deposited in an approved bank in the name of the company followed by the term “Under Formation”.
5- Number of Partners: the Minimum number of partners is three (3) and the maximum is twenty (20), except in the case of death and inheritance, when the number of partners may extend to a maximum of 30. If it exceeds that number, the company must register as a Joint Stock Company.
6- Foreigners: All partners may be foreigners; with the exception of companies seeking to engage in Commercial representation, in such case the foreigners’ shares should not exceed 50% of the capital. A foreign Manger of the company cannot be appointed except after obtaining a Work Permit in Lebanon.
7- Prohibited Activities: The object of an s.a.r.l may not include the following activities: Insurance, capitalization, savings, regular air transport, banking operations and the investment of funds for the account of third parties.
8- Appointment of an Attorney and Auditor: the Appointment of an Attorney and an Auditor is a must.
9- Management: the management of the Company shall be entrusted to one or more managers, not necessarily partners, appointed in the status or in a subsequent deed, for a limited or unlimited period provided they are physical persons.
10- Partners Meetings: 2 kinds of Partners meetings are available:
• Ordinary Partners Meetings to be held at least once per year within a period of 6 months as of the date of the closure of the financial year.
• Extraordinary Partners Meetings to be held for the purpose of modifying the Articles of Association.
11- Attendance and Resolution: each Partner may attend the meeting and participate in the voting process by a number of votes equal to the parts owned by him or represented by proxy.
The resolutions of the ordinary meetings are adopted by a simple majority vote of partners holding Fifty percent (50%) of the parts representing the capital of the Company.
Any amendment to the Articles of Association may be decided by a majority vote of partners representing three quarter of the capital.
Resolutions concerning the change of the company’s nationality, or compelling a partner to increase his contribution to the capital, or increasing his obligations may not be decided except by unanimous vote of the partners in an extraordinary General Meeting.
The company is not considered finally formed unless the parts are allocated to the partners, the number of parts to each is determined and their value fully paid and the amounts deposited in a bank. The registration in the Commercial Register is a must.
1. Information and Documents required:
• The Articles of Association duly signed by the Partners before the Notary Public or the President of the Commercial Register.
• Full name, nationality, Place and Date of Birth, and the domicile of each of the Partners along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The name of the Authorized Signatory on behalf of the Company.
• 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 Limited Liability Company at the Commercial Register is estimated as follows:
- Financial Tax: LBP/750.000/ (Around USD/500/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/375.000/ (Around USD/250/) + 1.5/1000 of the Capital amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees if any.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Financial Charge: LBP/2.000/ + LBP/250/ for each Document.
- Each Certified True Copy of the Registration Documents: LBP/2000/.