Ministry of Commerce Studies Automatic Suspension of Licenses for Debt-Ridden Companies
The Ministry of Commerce is studying a mechanism to suspend licenses of companies overdue on fee payments through automatic linkage with government entities
Translated by Qiyas from الراي — Original source
Officials at the Ministry of Commerce and Industry are preparing a sustainable mechanism to ensure the steady flow of fee payments due to the ministry in exchange for the procedures it carries out for its clients, particularly those requiring amendments to the companies register and a certificate from the Ministry of Commerce, especially those involving other government entities, notably the Ministry of Justice.
Following the Ministry of Commerce’s suspension of licenses for approximately 2,000 companies last Thursday due to non-payment and incomplete settlement of fees owed for entity amendment transactions, and its condition that the suspension be lifted only upon payment of the outstanding fees and completion of pending procedures, ministry officials are studying the approval of an immediate mechanism to enforce license suspensions against entities that delay paying their dues. This aims to prevent the accumulation of unpaid debts owed to the ministry, reduce the number of non-compliant entities with suspended licenses under the ministry’s regulations, and avoid the future necessity of addressing large volumes of recorded violations simultaneously.
In this regard, Commerce officials are exploring several scenarios within this framework, including activating automated inter-governmental linkages. A key component would be the Ministry of Commerce receiving instant system notifications regarding any transaction related to the documentation of company amendments, whether for newly established or existing companies, immediately after the entity pays the Justice Ministry fees due for the executed procedure.
If the required procedures at the Ministry of Commerce are not completed and the fees owed for the procedure authenticated by the Justice Ministry are not paid, the Ministry of Commerce will automatically suspend the entity’s license until its officials settle the ministry’s fees. This approach takes into account that electronic payment methods enable online payments without the need to visit the relevant ministry or use traditional payment methods through its staff, thereby simplifying procedures, enhancing electronic linkages between competent authorities, and strengthening the system of records and official documents.
On the same level, the license suspension measure is not limited to specific entities. The Ministry of Commerce’s punitive application extends to non-compliant entities that have not paid their dues, suspending the licenses of various commercial entities, including single-owner companies, limited liability companies, general partnerships, and limited partnerships.
Most of the procedures with unpaid fees for the Ministry of Commerce relate to partner entry and exit movements, each valued at 60 Kuwaiti Dinars (120 Dinars for executing both procedures). Other procedures requiring authentication by both the Justice Ministry and the Ministry of Commerce are also included in the list.
It is worth noting that recent amendments to the Companies Law regulated documentation procedures at the Justice Ministry’s Documentation Administration and enhanced them by abolishing the authority of the government notary to authenticate company documents, transferring this function to the Commercial Register Unit at the Ministry of Commerce. This included organizing coordination mechanisms and record exchanges between the two entities. Procedurally, this means that company officials can now rely solely on documenting a set of procedures at the Ministry of Commerce without the need to re-authenticate them at the Justice Ministry.
From an accounting perspective, this application saves approximately 10 percent of the total documentation fees, which was the percentage previously collected by the Justice Ministry for each transaction. Company officials and owners no longer need to pay the procedure fee twice, as was customary, once at the Justice Ministry and again at the Ministry of Commerce.
Thus, thanks to the abolition of the government notary’s authority to authenticate company documents and its transfer to the Commercial Register Unit at the Ministry of Commerce, owners who decide to make any changes to the ownership register will need to activate these changes at the Ministry of Commerce by paying only the ministry’s fees, without the need to visit the Justice Ministry at all.
