Cabinet Approves Draft Decree-Law Amending Certain Provisions of the Companies Law
The Cabinet, chaired by Ahmed Al-Abdullah, approved amendments to the Companies Law to facilitate establishment and forwarded the draft to the Amir.
Translated by Qiyas from الأنباء — Original source
The Council of Ministers approved a draft law decree amending certain provisions of the Companies Law issued by Law No. 1 of 2016, with the aim of facilitating the establishment of companies and enhancing confidence in dealing with them, in line with the state’s direction toward a more flexible and transparent business environment.
Shari’a Al-Muwasharji, Deputy Prime Minister and Minister of State for Cabinet Affairs, stated in a statement that this decision was reached during a Council of Ministers meeting held in the conference room of the administrative building in the third phase of Martyr’s Park, presided over by His Highness Sheikh Ahmad Al-Abdullah, Prime Minister.
He clarified that the aforementioned draft law decree exempted all procedures and legal acts related to companies from the requirement of notarization, from their establishment throughout their existence and any amendments to their contracts and articles of association. Instead, it sufficed for these documents to be written and signed by the partners or their representatives, and registered in the Commercial Register, which would serve as the official record. This registration would render the company contract, its amendments, and resolutions of the Extraordinary General Assembly enforceable against third parties. The decree also abolished the “muhasasa” (silent partnership) company, as it is not subject to registration or publication requirements.
He added that the draft law decree permitted free professionals to establish a professional company with a single shareholder. It also included transitional provisions granting existing offices and companies a one-year period to regularize their status, while preserving the validity of contracts and companies established prior to the law’s implementation.
He noted that the Council of Ministers submitted the draft law decree amending certain provisions of the Companies Law issued by Law No. 1 of 2016 to His Highness the Amir Sheikh Meshal Al-Ahmad.
