The Companies Law No. 22 of 1997

And its amendments

Published in the Official Gazette No. 4204 dated 15/5/1997

We, Al Hassan Bin Talal, the Regent

In accordance with Article (31) of the Constitution and pursuant to what has been decided by the House of Senates and the House of Deputies, we hereby ratify the following Law and order that it be promulgated and incorporated in the laws of the State:

Article (1): Citation of the Law and Coming into Force

This Law shall be cited as the “Companies Law of 1997” and shall come into effect after the lapse of thirty days from the date of its publication in the Official Gazette.

Article (2): Definitions▪

The following words and expressions, wherever used in this Law, shall have the meanings hereunder assigned to them, unless the context otherwise provides:

The Ministry:   Ministry of Industry and Trade.

The Minister:   Minister of Industry and Trade.

The Controller:               The Companies General Controller.

The Directorate:           The Companies Supervision Directorate associated with the Ministry.

The Bank:          The financial company licensed to carry out banking activities in pursuance to the provisions of the Banking legislation in force.

The Court:        Court of First Instance in whose jurisdiction the headquarters of the Jordanian company or the main branch of the foreign company is located.

b) The words and expressions, “Commission”, “Stock Market”, “Market”, “Depository Center”, “Coverage Promissory”, “Issue Manager” and “Issue Trustee”, wherever stated in this Law, shall have the definitions ascribed to it pursuant to the Securities Law in force.

Article (3): Application of the Law■

The provisions of this Law shall apply to companies practicing commercial activities and to matters dealt with in its provisions. If this Law does not include a provision applicable to any matter, then reference shall be made to the Commercial Code. If a provision is not included therein, then reference shall be made to the Civil Code; otherwise provisions of commercial practice, and guidance by judicial, jurisprudent interpretations, and equity principles shall be applied.

Article (4): Formation and Registration of the Company

The formation and registration of companies in the Kingdom shall be realized in accordance with this Law. And every company formed and registered under this Law shall be considered a Jordanian corporate entity, with its Headquarters situated in the Kingdom.

Article (5): Registration Arresters and Objection to Registration

a) No company shall be registered with a name chosen for a fraudulent or an illegal objective. And no company shall be registered with the name of another company already registered in the Kingdom, or with a name so similar thereto that may lead to confusion or deception. The Controller may reject the registration of a company with such name in any such cases.

b) Any company may submit a written objection to the Minister, within sixty days from the date of the publication of the decision to register another company in the Official Gazette, for cancellation of the registration of such other company, if the name under which it is registered is similar to its name or resembles it to the point that would lead to confusion or deception. The Minister after giving the company, whose registration is contested, time to submit its defense within the period specified by him, will issue his decision to cancel the registration of the other company if he is convinced by the reasons for the objection to its registration, and the company does not amend its name and remove the reasons for the objection. Any party aggrieved by this decision may appeal to the High Court of Justice within thirty days from the date of the publication thereof in one of the local daily newspapers.

Article (6): Company Forms

a) Subject to the provisions of Articles (7) and (8) of this Law, companies registered under this Law shall be divided into the following forms:*

General Partnership

Limited Partnership

Limited Liability Company

Limited Partnership in Shares

Private Shareholding Company

Public Shareholding Company

b) It is not stipulated that a prior approval be received from any other entity to register any company, provided that no legislation in force requires otherwise.■

c) The Department may declare, in pursuance to instructions issued by the Minister, any evidence or information not related to the company accounts or financial statements.▪

d) The Department may retain an electronic or minimized copy of the documents and evidence originals archived or deposited with it. It is also permitted to retain by electronic means the evidence, information, registers and transactions related to its activities. These copies and the evidence, information and registers produced after being stamped with the Department’s stamp and signed by the authorized official will have the same legal effects of the original written documents including their legal title in evidence.■

Article (7): Companies Registered Pursuant to Agreements Concluded by the Government with other States

a) Companies registered in the Kingdom pursuant to agreements concluded by the Government with any other state and the joint Arab companies emanating from the Arab league or the institutions or organizations affiliated thereto shall be registered with the Controller in a special register prepared for this purpose. These companies shall be subject to the provisions and conditions stated in this Law in the circumstances and on the issues not stipulated in the agreements and contracts under which they were established and their Memorandums of Association.

 Companies Operating in Free Zones

b) Companies operating in the free zones shall be registered with the Free Zones Corporation in the registers prepared by it for that purpose in coordination with the Controller. The laws and regulations implemented in this Corporation shall be applied thereto provided that the Corporation send a copy of the registration of these companies to the Controller in order for him to document the registration of investors in the free zones with the Ministry.

 Civil Companies

c) Civil Companies

Civil companies shall be registered with the Controller in a special register named “Register of Civil Companies.” Such companies are the companies established among specialized and professional partners and shall be subject to the provisions of the Civil Code, the provisions of the laws pertaining thereto and to their internal Articles and Memorandum of Association.

New partners of the same profession may be admitted to such companies or partners may withdraw there from. These companies shall not be subject to the provisions of bankruptcy and preventive bankruptcy.

The provisions set forth herein shall apply to the registration of these companies and the amendments effected thereon to the extent that they do not contradict with the provisions of the laws and regulations related thereto.

If all the partners in a company belong to the same profession, and the company objectives are limited to practicing the work and activities related to that profession, the partners may agree in the company articles of association or its memorandum of association on any special provisions to manage the company or to distribute its profits or to organize the transfer of the shares’ ownership therein and to place the necessary restrictions for that purpose or to place special provisions for any other issues related to the company in accordance with what the partners agree upon.■

- Non-profit Companies

d) Non-profit companies may be registered in accordance with one of the types of companies provided for in this Law and in accordance with the provisions set forth in this Law. These companies shall be registered in a special register named “Register of Non-Profit Companies.” The company provisions, conditions, objectives, work that it is permitted to practice, supervision, the method and manner of receiving assistance and grants, finance resources, spending method, liquidation and accrual of its money upon liquidation and death, and documents that should be submitted to the Controller and remaining related issues will be specified in pursuance to a special regulation issued for this purpose.▪

e) A joint investment company will be registered as a Public Shareholding Company with the Controller in a special register. The provisions of this Law shall be applied to its registration, management and amendments that may occur thereto; otherwise it shall be subject to the Securities Law.■

f) The company registration application, articles and memorandum of association or any other document or any amendment that may occur to any of same shall be signed in the presence of the Controller or the person authorized by him in writing. Any document which the Law requires its submittal to the Controller or the Department for any type of the companies listed in this Law shall also be signed in the presence of the Controller or person authorized by him in writing or the Notary Public or a practicing lawyer.▪

Article (8): The Conversion of Public Entities into Public Shareholding Companies

Notwithstanding anything stipulated in this Law:

a) Any institute, authority, public official body or public utility or any part of it may be converted by virtue of a decision of the Council of Ministers, upon the recommendation of the Minister, the Minister of Finance and the appropriate Minister, into a Public or Private Shareholding Company or a Limited Liability Company operating in pursuance to commercial basis where the government owns all of its shares, with the exception of the institute, authority or public body established by virtue of a special law, in which case the special law pertaining thereto should be amended before converting it to any of the abovementioned companies in accordance with the provisions of this Article.■

b) The capital of such company shall be determined by re-evaluating the moveable and immovable assets of the corporation, authority or body in accordance with the provisions of the Law, provided that the members of the re-evaluation committee shall include at least one licensed auditor. The value of such assets shall be considered cash shares in the company capital.

c) The Council of Ministers shall appoint a special committee that shall prepare the company articles and memorandum of association including the method of selling and trading its shares and completing the procedures for converting the corporation, authority or public official body into a Public Shareholding Company and the registration thereof in such capacity in accordance with the provisions of this Law.

d) Upon the conversion of the corporation, authority or public official body into a company and the registration thereof in such capacity, the Council of Ministers shall appoint its Board of Directors to conduct the affairs thereof and to carry out all powers entrusted thereto under this Law.

e) The company established in the aforesaid manner shall be subject to the provisions and conditions stipulated in this Law in the circumstances and issues not provided for in its articles and memorandum of association and shall appoint its independent auditor.

f) The company established in the aforesaid manner shall be considered a general successor for the corporation, authority or public official body which has been converted and shall supersede it legally and practically in all its rights and obligations.

Article (9): Founding of the General Partnership

a) A General Partnership shall consist of a number of natural persons, not less than two and not more than twenty, unless the increase is due to inheritance, provided that such an increase is subject to the provisions of Articles (10) and (30) of this Law.

b) No person may be a partner in a General Partnership unless he is at least eighteen years of age.

c) A partner in the General Partnership will acquire the capacity of a merchant and shall be considered as practicing commercial business in the name of the Partnership.

Article (10): Address of the Company

a) The title of the General Partnership shall consist of the names of all the partners, or of the title or surname of each of them or of the name of one or more of the partners or his title, provided that, in this case, the phrase “and his partners” or “and partners” is added to his name or their names, as the case may be, or what would lead to the meaning of this phrase. The title of the Partnership shall always comply with its existing status.

b) The General Partnership may have its own trade name provided that the said name is associated with the title under which the Partnership is registered and that it appear on all the documents and papers issued by the Partnership or dealt with and on its correspondence.

c) If all or some of the partners in the General Partnership die and the title of the Company was registered in their names, their heirs and the surviving partners may – with the approval of the Controller – keep the Company title and use same if he finds that the Company title has acquired commercial fame.

Article (11): Registration Procedures

a) An application for registration shall be submitted to the Controller together with the original Company agreement signed by all the partners and with a statement signed by each of them in accordance with paragraph (f) of Article (7) of this Law. The Company agreement and its statement must include the following:*

Title of the Company and its trade name, if any.

Names of the partners and the nationality, age and address of each of them.

Headquarters of the Company.

The Company capital and each partner’s share therein.

Objectives of the Company.

Duration of the Company, if it is limited.

Name of the partner or names of the partners authorized to manage and sign on behalf of the Company and their powers.

The status of the Company in the event of the death, bankruptcy, or the declaration of incompetence of any or all of its partners.

b) The Controller shall issue his decision approving the registration of the Company within fifteen days from the date of the submission of the registration application. The Controller may reject the said application if there is evidence in the Company agreement or its memorandum of a violation of this Law, public order or the provisions of all legislations in force and if the partners do not take action to rectify the said violation within the period determined by the Controller. The partners may submit an objection to the Minister against the rejection decision of the Controller within thirty days from the date of notifying them of the said rejection.

Should the Minister decide to reject the objection, the objectors shall have the right to contest his decision before the High Court of Justice within thirty days from the date of their notification of the decision.

c) If the Controller approves the registration of the Partnership Company or if the approval was obtained by a decision of the Minister, pursuant to the provisions of paragraph (b) of this Article, it shall be registered after collection of the registration fees and the Controller will issue the Company a registration certificate which will be considered as official evidence in all legal procedures. The Company must maintain it in a visible place in its headquarters and the Controller shall also publish an announcement of the Partnership’s registration in the Official Gazette.*

d) The General Partnership is not allowed to commence its operations or to exercise any of them except after its registration and payment of the fees due thereon in accordance with the provisions of this Article, and subject to all the provisions of this Law and the regulations issued in accordance.

Article (12): The General Partnerships Register

The Controller shall keep a special register in which all General Partnerships are registered in serial numbers and in chronological order according to their registration dates. The alterations or amendments that may occur to any of them shall be recorded therein. Any individual may, upon payment of the required fees, review the said register after obtaining the prior approval of the Controller if the latter is convinced that such individual has a special interest in the register.

Article (17): Management of the Company

a) Each partner shall have the right to take part in the management of the General Partnership and the Partnership Agreement shall specify the names of partners authorized to manage and sign on its behalf and their powers. The authorized person shall realize the operations of the Company in accordance with the provisions of this Law and the regulations issued in line therewith and within the authorities delegated to him and the rights given to him under the Partnership Agreement. The authorized person shall not have the right to receive any remuneration or wages in return for his work in the management of the Company except with the approval of the remaining partners.

b) Any partner authorized to manage the affairs of the General Partnership and to sign on its behalf shall be considered its legal representative and the Company shall be committed to the actions he undertakes on its behalf and to the results arising from the said actions. However, if the partner is not authorized and realized any work in the name of the Company, then it shall be responsible for his actions towards a bona fide third party and shall claim compensation from him for all the losses and damages that may have been incurred thereby as a result of his action.

Article (18): Responsibilities of Persons Authorized to Manage the Company

a) Any person authorized to manage the affairs of the General Partnership, whether a partner or not, must work for its benefit honestly and faithfully, safeguard its rights and protect its interests. Same shall also present the partners on a periodic basis or upon the request of all or any one of them with correct accounts of the Company operations in addition to detailed information and data thereon.

b) The person authorized to manage the General Partnership shall be responsible for any harm he may cause the Company or for any damage incurred thereby due to his negligence or failure in realizing his duties. Such responsibility shall prescribe after the lapse of five years from the date his work in the Company management is terminated for any reason whatsoever.

Article (19): Responsibilities of the Person Authorized to Manage a Partnership upon the End of his Authorization

a) The person authorized to manage the General Partnership must present the partners therein the following documents whether or not he has been requested to do so by the partners and within three months from the date his duty in the Company management ends:

An account showing every benefit he gained whether in cash or in-kind or any rights he obtained or owned as a result of any work relating to the Company which he conducted or exercised in the course of his management of the Company and which he kept for himself including any similar benefits which he gained through the exploitation of the Company title, trademark or fame. The said person shall be obliged to refund the full value or amounts of profits he earned and compensate the Company for all the harm sustained thereby including interest, expenses and costs incurred by the Company.

An account of any properties or assets belonging to the Company which he has placed under his control or disposal and used or exploited or for the purpose of exploiting same for his personal benefit. The said person shall be obliged to return such properties and assets to the Company and shall be liable for any loss or damage incurred thereby. He must also compensate the Company for any harm or damage incurred thereby and for the loss of profit incurred by the Company as a result of the aforementioned.

b) The provisions provided for in paragraph (b) of Article (18) of this Law regarding the discharge of responsibility shall not be applicable to the acts stipulated in this Article. Such provisions also do not include anything that prevents the person who commits the abovementioned acts from assuming penal liability pursuant to any other law.

Article (20): The Discharge of the Person Authorized to Manage the Partnership■

a) If the person authorized to manage the Partnership and sign on its behalf was a partner therein and was appointed in that capacity in pursuance of the Company agreement or a special contract agreed upon between the partners, then he may not be discharged from managing it or signing on its behalf and another may not be appointed in his stead except with the approval of all partners or by virtue of a decision issued with the majority of more than one-half of all partners who own more than 50% of the Partnership’s capital if the Partnership Agreement permits that and if it contains a provision stating the method of appointing a person authorized to manage it and sign on its behalf from among the partners instead of the discharged person. Otherwise the authorized partner may not be discharged.

b) The partner authorized in managing the Company and signing on its behalf may be dismissed with a decision issued by the competent Court upon the request of one partner or more if the Court finds a legitimate cause justifying that dismissal, after which the competent Court shall take a decision to appoint a substitute authorized person.

Article (21): Actions that a Partner is Prohibited to Undertake

A partner in a General Partnership or the authorized person in managing it, whether a partner or other, shall not be permitted to undertake any of the following actions without obtaining the prior written approval of the remaining partners or all of them, as the case may be:■

a) To enter into any undertaking with the Company to realize any business, whatever its nature, on its behalf.

b) To enter into any undertaking or agreement with any person if the subject-matter of the undertaking or the agreement falls within the objectives and activities of the Company.

c) To engage in any business or activity which competes with the Company, whether he carried out the said business or activity for his own benefit or for the benefit of others.

d) To participate in any other company which carries out businesses similar or analogous to those of the Partnership or to assume the responsibility of managing such companies. This Article does not apply to mere ownership of shares in Public Shareholding Companies.

Article (22): Expenses of the Person Authorized to Manage the Partnership

The General Partnership shall be liable for all the expenses and costs incurred by the person authorized to manage the Company in the course of conducting its operations or for any loss or damage sustained by him due to undertaking any business for the benefit of the Company or for the protection of its assets and rights, even if the said person did not obtain the prior approval of the partners for that.

Article (23): Expelling a Partner from the Partnership

The partners in a General Partnership shall not have the right to expel any of them from the Company except by a Court decision upon the request of any of the partners.

Article (24): Partnership’s Account Books, Records, and Registers

a) The Partnership shall undertake to keep its account books, records and registers at its headquarters or at any place where it carries out its activities. If the capital of the Partnership is ten thousand Dinars or more, it shall undertake to keep duly organized account books and records. Each partner shall have the right to examine such account books, records and registers either personally or by delegating, in writing, any other experienced and specialized person to do so and to obtain copies or extracts therefrom. Any agreement to the contrary shall be null and void.

b) The General Partnership, whose capital is one hundred thousand Dinars or more, shall undertake to appoint a licensed auditor to be elected by the majority of the partners.

Article (25): Partnership’s Responsibility towards Actions of Authorized Manager

a) The General Partnership shall be bound by any action undertaken by any person authorized to manage it or to realize such action and by any documents signed by him in the name of the Company whether such person is a partner in the Company or not.

b) The person authorized to manage the Company shall be considered authorized to file lawsuits in the name of the Company unless the Partnership’s Agreement provides otherwise.■

Article (26): Partners’ Responsibility towards Partnership Debts

a) Subject to the provisions of Article (27) of this Law, the partner in the General Partnership shall be jointly and severally liable with the rest of the partners for all the Partnership’s debts and obligations which became due on the Company during the period he is a partner therein. He shall guarantee the Company debts and obligations by his own private property. This liability and guarantee shall be transferred to his heirs after his death within the limits of the amount inherited.

b) Anyone who assumes, either verbally or in writing or by his acts, the identity of a partner in the General Partnership or deliberately allows others to believe as such shall be responsible to any party who becomes a creditor to the Company as a result of his belief in that pretence.

Article (27): Partnership Prosecution

A creditor of the General Partnership may sue the Company and partners therein. However, he may not levy execution on property of partners for collecting his debt except after having levied execution on the property of the Company. Should such property prove to be insufficient for settlement of his debt, then the creditor may file lawsuit against the partners’ own property to settle the amount remaining of that debt. Each partner shall have the right to compensation from other partners in proportion to the percentage paid by him for each one of them out of the Company debt.

Article (28): Withdrawal from a Partnership

a) Any partner in the General Partnership may of his own will withdraw therefrom if the duration of the Company is not limited, in such case he must abide by following:

Inform the Controller and the remaining partners in the Partnership of his intention to withdraw therefrom by serving them with a written notice through registered mail. The withdrawal shall be considered effective as from the day following the publication of same by the Controller in at least two local daily newspapers at the expense of the withdrawing partner. Withdrawals will only be effective against others from this date.

The withdrawing partner shall continue to be, together with the remaining partners, jointly and severally liable for all the Company debts and obligations incurred by it prior to his withdrawal therefrom. The withdrawing partner shall be considered as guarantor of the said debts and obligations from his private properties, together with the remaining partners, in accordance with the provisions of this Law.

The withdrawing partner shall be responsible towards the Company and the remaining partners for any harm or damage sustained by them as a result of his withdrawal from the Partnership, and he shall also be responsible to compensate for such harm or damage.

b) If the General Partnership is of limited duration, then none of the partners are allowed to withdraw therefrom during that period except with a Court decision.

c) Should the provisions of paragraphs (a) and (b) of this Article apply, then the remaining partners shall realize the necessary amendments to the Partnership Agreement and make the necessary changes to its status in accordance with the provisions of this Law.

d) In case a partner withdrawal in accordance with the provisions of paragraph (a) of this Article and the Company was comprised of two persons then this will not lead to dissolution of the Company and the remaining partner should admit one or more new partners to the Company to replace the withdrawing partner within three months from the date of withdrawal. Failing to do so within such period will result in the dissolution of the Company by operation of Law.

Article (29): Admittance of a Partner to the Partnership

a) One or more new partners may be admitted to the Partnership with the approval of all the partners unless it is stated otherwise in the Partnership Agreement. The new partner, with the remaining partners, shall become liable for all debts and obligations that become due on the Company after his admittance thereto, and shall also be considered as guarantor of the said debts and obligations with his personal properties.■

b) The provisions of paragraph (a) of this Article shall apply to any new partner admitted to the Company as a result of the relinquishing by one of the other partners to him of his share or a part thereof in the Company. In this case, the provisions of clauses (2) and (3) of paragraph (a) of Article (28) of this Law shall apply to the withdrawing partner.

Article (30): Death of a Partner

a) Unless the Partnership Agreement or any other agreement signed by all partners prior to the death of a partner provides otherwise:

The Partnership shall remain in existence and shall continue to exist in the event of the death of one partner therein.

Any of the heirs of the deceased partner wishing to join the Company may do so, each in proportion to the percentage of shares devolved upon him from the share of his devisor, in the capacity of a general partner if same meets the conditions required in the general partner in accordance with the provisions of this Law. Heirs not wishing to join the Company must notify the Controller with a written notice within two months of the occurrence of the death. In all cases the heirs joining the Company and the partners must bring about the necessary changes in the Partnership’s Agreement and its statement in accordance with the Law’s provisions within a period set by the Controller.■

If one of the heirs of the deceased partner is a minor or is legally incompetent he shall be admitted to the Company as a limited partner and the Partnership shall, by operation of the Law, be converted to a Limited Partnership.

b) If the General Partnership continues to operate following the death of any of its partners without there being in its Agreement or any other agreement signed by all partners prior to the death of the partner any express provision that prohibits the Company to continue in existence and it continues to exist, then the inheritance of the deceased partner shall not be liable for any of the debts and obligations that become due on the Company following his death.

Article (31): Bankruptcy of One of the Partners

If one of the partners in the General Partnership becomes bankrupt, then the creditors of the Company shall have the priority over his private debts in his bankruptcy. If the Company, however, becomes bankrupt, then its creditors shall have priority over the private creditors of the partners.

Article (32): Cases of Company Termination

A General Partnership shall be terminated in any of the following circumstances:

a) When all partners agree on the dissolution of the Company or on its merger with another company.

b) Expiry of the Company term, whether its original term or the extended term as per the agreement of all partners.

c) Completion of the objective for which it was formed.

d) When only one partner remains in the Company subject to the provisions of paragraph (d) of Article (28) of this Law.

e) Declaring the Company bankrupt, in which case this will result in the consequent bankruptcy of the partners.

f) Declaring one of the partners bankrupt or legally incompetent unless all remaining partners decide on the continuance of the Company between them in accordance with the Partnership agreement.

g) Dissolution of the Company by a Court decision.

h) Canceling the registration of the Company upon the Controller’s decision in accordance with the provisions of this Law.

Article (33): Dissolution of a Company

a) The Court shall consider the dissolution of a General Partnership pursuant to a case filed by one of the partners in any of the following circumstances:

If any of the partners commits a imperative continuous breach of the Partnership Agreement or causes substantial damage to the Company as a result of committing a wrong, default, or negligence while managing the Company affairs or while looking after its interests or safeguarding its rights.

If the activities of the Company can only be realized at a loss for any reason whatsoever.

If the Company loses all of its properties or a big portion so that the continuity of its activities becomes unfeasible.

If a disagreement occurs between partners rendering the continuity of the Company among them impossible.

If any of the partners becomes permanently incapable of performing his duties towards the Partnership or fulfilling his obligations thereto.

b) The Court may, in any one of the events mentioned in paragraph (a) of this Article, either decide to dissolve the Company or decide that it continue to realize its business after the expulsion of one or more partners therefrom if such an expulsion, at the discretion of the Court, will lead to the continuity of the operations of the Company in a normal manner that meets the interests of both the Company and the remaining partners and safeguards the rights of others.

Article (34): Ceasing of Company Operations■

Should the Company cease to carry out its operations, the authorized partner or any partner therein shall notify the Controller of that within a period that does not exceed thirty days from the date of the Partnership ceasing its operations, or if the Controller became aware that the Company has ceased to carry out its operations, and after ascertaining this, he may in both cases grant the Company a specified period to resume its operations. If the Company fails to respond, the Controller may request its compulsory liquidation.

Article (35): Company Liquidation

a) Any Partnership that has been dissolved for any of the reasons stipulated in this Law shall be considered in a state of liquidation and the properties thereof shall be liquidated and distributed among the partners as agreed upon in the Partnership Agreement or any other document signed by all partners. Should there be no such agreement between the partners, then the liquidation of the Company and the distribution of its properties among the partners shall be governed by the provisions of this Law.

b) A General Partnership which is under liquidation shall retain its corporate identity, to the extent necessary for the liquidation and its procedures and until its liquidation is realized. The authority of the person authorized to manage the Company shall, in this case, be terminated whether he is one of the partners or others.

Article (36): Appointment of a Liquidator

If the liquidation of the Partnership is voluntary with the agreement of all partners, then a liquidator shall be appointed by the partners, and they shall determine his remuneration. Should a dispute arise between them regarding this issue, then the liquidator shall be appointed and his remuneration will be determined by the Court upon the request of any or all of the partners. However, if the Company has been dissolved by law or by a Court decision, then a liquidator shall be appointed by the Court which shall also determine his remuneration.

Article (37): Liquidator’s Activities

a) The liquidator of a General Partnership must commence his work by announcing the Company liquidation in one daily newspaper at least and by preparing a list which includes all the properties and assets of the Company, and must also specify all its rights due from others and obligations due to others. The liquidator is neither authorized to relinquish any of the Company properties, rights or assets nor to dispose of any of them except with the prior approval of all partners or permission from the Court.■

b) The liquidator is not authorized to carry out any new business for the Company or in its name except what is needed and necessary for the completion of any undertaking which has been previously commenced by the Company.

c) The liquidator shall be personally liable for any violation of the provisions of this Article.

Article (38): Liquidator’s Duties

The liquidator must comply with all the legal and practical procedures needed for the liquidation of the General Partnership in accordance with the provisions of this Law and any other legislation which he deems appropriate to apply, including the collection of debts due to the Company and repayment of debts due by the Company, according to priority as determined by law.

Article (39): Settlement of Partners’ Rights after Dissolution of Partnership

a) The following rules and provisions shall be observed in settling the rights among the partners after the dissolution of a General Partnership and placing it under liquidation, and the properties and assets of the Company including the properties offered by the partners for the purpose of such settlement and as a part thereof, shall be utilized for the settlement of such rights and obligations due, according to the following order:

Liquidation costs and the remuneration of the liquidator.

Amounts due by the Company to its employees.

Amounts due by the Company to the public treasury.

The Company debts to creditors other than the partners provided that priority rights are observed when repaying same.

Loans advanced by partners to the Company which were not part of their shares in its capital.

b) Each partner shall receive profits and incur losses including the profits or losses of the liquidation in the same proportion agreed upon and determined in the Partnership Agreement. If the Agreement does not indicate such a proportion, then distribution of profits and losses shall be made in proportion to their shareholding in the capital. The remaining amount of the Company properties and assets shall then be distributed among the partners each in proportion to his shareholding in its capital.

Article (40): Liquidator’s Duties upon End of Liquidation■

a) The liquidator must submit to each partner at the end of the General Partnership liquidation a final account of the operations and procedures undertaken by him during the liquidation process. He must also submit the said account to the Court should he have be appointed therefrom. In all events, the Controller shall be notified of the causes of liquidation and shall be provided with a copy of that account in a period that does not exceed a year from the date of the liquidation decision. Contrary to this, the Controller may refer the Company under liquidation to Court in order for it to complete the liquidation procedures under its supervision, or he may grant the liquidator an appropriate grace period to complete these procedures. In all cases the Controller must publish an announcement of the Company liquidation in the Official Gazette and in a local daily newspaper at the Company expense. The date of appeal comes into force as of the announcement’s publication in the local daily newspaper if the liquidation decision is not issued in the presence of the parties.

b) Shall it become apparent after the completion of the liquidation procedures and the cancellation of the Company registration that movable and immovable property registered in the Company name were not included in the liquidation exist, the Controller shall refer the matter to Court in order for it to issue a decision in pursuance to a summary request to determine the method of liquidating this property whether through the appointment of a new liquidator, or the continuance of the previous liquidator in carrying out his duties.

Article (41): Founding of a Limited Partnership

A Limited Partnership is formed of the two following categories of partners whose names should be listed in the Partnership Agreement.

a) General Partners:

They shall manage the Partnership and realize its operations. They are also jointly and severally liable for all the Partnership’s debts and liabilities with their private properties.

b) Limited Partners:

They shall contribute to the capital of the Partnership without having the right to manage the Company or to realize its operations, and the liability of each one of them towards the Company debts and liabilities is limited to his share in the capital of the Company.

Article (42): Partnership’s Address

The title of a Limited Partnership shall only consist of the names of the general partners. If there is only one general partner in the Partnership, then the phrase “and partners” must be added to his name. The name of any limited partner must not appear in the limited Partnership’s title. Should the name of a limited partner be mentioned upon his request or with his knowledge, then he shall be responsible as a general partner for the Company debts and liabilities towards other parties, who may have depended, in good faith, in their dealing with the Company, on that name.

Article (43): Partnership’s Management

a) A limited partner shall not have the right to participate in the management of the Limited Partnership and shall have no power to bind it, but he may have access to its books, accounts and registers related to the decisions adopted in the course of its management. Same may also inquire about its state and affairs and deliberate with other partners in connection therewith.

b) If the limited partner participates in the management of its affairs, he shall then be liable as a general partner for all debts and obligations incurred by the Partnership during his participation in its management.

Article (44): Relinquishment by a Limited Partner of his Share■

A limited partner in a Limited Partnership may at his own discretion and without acquiring the approval of the general partners relinquish his share to another person, who shall become a limited partner in the Company unless all general partners agree that he be admitted as a general partner in the Company.

Article (45): Admittance of a Limited Partner to the Company

A new general partner may be admitted to the Limited Partnership with the consent of all the general partners, or with the consent of the majority of them should the Partnership Agreement allow such an admission. The approval of the limited partners is not required in such a case.

Article (46): Amendments to the Company Objectives▪

Any disagreement arising of the management of the Limited Partnership shall be resolved by the general partners in the Company with unanimity or agreement of their majority provided that same own more than 50% of the Company capital (if permitted to do so by the Partnership Agreement). However, any change or amendment in the Agreement and statement shall not be made without the consent of all general partners.

Article (47): Instances where the Company shall not be Dissolved

A Limited Partnership shall not be dissolved due to the bankruptcy of the limited partner, his insolvency, his death, his incompetence or his permanent disability.

Article (48): Application of General Partnership Provisions to Limited Partnership

A Limited Partnerships shall be subject to the provisions governing the General Partnership, which are stipulated in this Law in all matters and events not provide for in this part.

■ As amended by the Temporary Law No. (40) for the year 2002.

Article (49): Founding of an Implied Trust

a) An Implied Trust is a commercial understanding organized between two persons or more. The operations of the Implied Trust shall be carried out by an apparent partner who shall deal with third parties. The Implied Trust as such is limited to the special relationship between the partners. The existence of such a company between the partners may be proven by all means of proof.

b) An Implied Trust Company does not enjoy a corporate identity and is not subject to the provisions and procedures of registration and licensing.

Article (50): A Partner Acquiring the Capacity of a Merchant

The silent partner in an Implied Trust Company shall not be considered a merchant unless he personally carries out commercial transactions.

Article (51): Partners’ Responsibility

Third parties shall not have the right of any course of action against any partner except over the one dealt with in the Implied Trust. Should a partner therein confess to the existence of such a Company or should he notify others of its existence, the Company may then be considered as an existing Company and the partners therein shall become jointly responsible towards third parties.

Article (52): Partners’ Rights and Obligations

The Implied Trust Agreement shall specify the rights and obligations of all partners therein towards each other and towards the Company and the manner in which profits and losses are to be distributed among them

Article (53): Founding of a Limited Liability Company

a) The Limited Liability Company is composed of two persons or more. The Company liability shall be considered independent from the liability of every shareholder in it. The Company assets and property shall be liable for its debts and obligations. The liability of any shareholder therein for these debts, obligations and losses is limited to its shares in the Company.*

b) The Controller may agree to the registration of a Limited Liability Company composed of one person only or which may become owned by one person.

c) Upon the death of a shareholder in the Limited Liability Company, his share will be transferred to his heirs. This rule shall apply to the legatee of any share or shares in the Company.

Article (54): Company Capital

a) The capital of the Limited Liability Company shall be fixed in Jordanian Dinars provided that the capital is not less than thirty thousand Dinars divided into indivisible shares of equal value of not less than one Dinar each. However, should more than one shareholder jointly own such shares, for whatever reason, the shareholders must select one person from amongst them to represent them before the Company. However, if the shareholders disagree or do not make that election within thirty days from the date they become holders of such share, then they shall be represented by the person elected from amongst them by the Company manager or its Management Committee.

b) A Limited Liability Company may not offer its shares for public subscription or increase its capital or borrow by subscription.*

Article (55): Title of a Limited Liability Company

The name of the Limited Liability Company shall be derived from its objectives provided that it is followed by the words: “with limited liability”, which can be abbreviated by the letters “W.L.L.” The Company name, capital amount and registration number shall be stated on all of the stationery and print material used in its operations and contracts concluded thereof.

Article (56): Maintenance of the Commercial Name

A General Partnership Company or Limited Partnership Company may keep its original name if it wishes to convert to a Limited Liability Company.

Article (57): Registration Procedures

a) The application to establish the Limited Liability Company shall be submitted to the Controller accompanied by the Company Articles and Memorandum of Association on the approved forms for this purpose, and shall be signed before the Controller or before any person delegated by him in writing, before a Notary Public or before a licensed lawyer.

b) The Limited Liability Company Articles of Association shall incorporate the following particulars:

•               Name of the Company, its objectives and its headquarters.

•               Names of the shareholders, their nationalities and the selected notification address of each of them.■

•               Amount of capital and the shares of each shareholder therein.

•               Statement of the in-kind share(s) in the capital, name of the shareholder who presented such shares and their estimated values.

•               Any other additional data which the shareholders may submit or which the Controller may request in implementation of the provisions of the Law.

c) The Memorandum of Association of the Limited Liability Company must include the information provided for in paragraph (b) of this Article in addition to the following information:

•               The manner of managing the Company, the number of members in the Management Committee, the Committee’s powers including the limit and ceiling of borrowing, mortgaging the company assets and guaranteeing others in a manner that realizes the interest of the company and its objectives.▪

•               Conditions for transferring the shares in the Company and the procedures to be followed in that respect and the form of writing the transfer.

•               The manner of distributing the profits and losses to the shareholders.

•               Meetings of the Company General Assembly and Management Committee, their legal quorum, and the quorum needed for taking decisions thereby, the procedures regarding the manner of holding the said meetings and the invitation procedures for attending same.▪

•               Rules and procedures pertaining to the liquidation of the Company.

•               Any other additional information furnished by the shareholders or requested by the Controller.

Article (58): In-kind Shares in the Capital

a) If the Company capital or a part thereof is in-kind shares, then the holders of such shares shall keep same and refrain from disposing of them until they are delivered to the Company, registered in its name and the title thereto is transferred to it.

b) If the holders of in-kind shares do not comply with delivering and transferring the title of these shares, as the case may be, to the Company within thirty days of the Company registration, subject to renewal upon the Controller’s approval, they shall be bound by operation of law to pay the value thereof in cash, according to the price approved by the founders in the Company Memorandum of Association. The Controller has the right to request proof of the accuracy of the evaluation of the value of the in-kind shares.*

c/1) If the Controller is not convinced of the accuracy of the evaluation of the in-kind shares presented by the shareholders, the Minister based on the Controller’s recommendation shall form a committee from specialized and experienced persons at the Company expense to evaluate the concerned shares’ monetary value, provided that one of the shareholders is a member of the committee. The committee shall present its report to the Controller within a period that does not exceed thirty days from the date of its formation.▪

c/2) The shareholders may object to the Minister on this report within ten days of its presentation to the Controller. The Minister shall arrive at a decision concerning the objection within two weeks of its presentation to the Controller. If he accepts the objection the Company registration will be rejected unless the shareholders accept the evaluation, in which case the registration procedures shall be completed in accordance with the provisions of this Law.

d) Concession rights, patents, technical know-how and other intangible rights are considered as in-kind assets.

Article (59): Registration of the Company

a) The Controller shall issue his decision approving the registration of the Company within fifteen days from the date the application’s submittal and signed by the shareholders. He may refuse the application if he finds that the Company Articles or Memorandum of Association contains a provision that contradicts the provisions stipulated in this Law and the regulations promulgated in accordance therewith and contrary to any other legislation in force in the Kingdom, and the shareholders have not removed the violation within the period specified by the Controller. The shareholders may object to the rejection decision before the Minister within thirty days of the date they are notified of same. If the Minister rejects the objection, the objectors may challenge his decision before the High Court of Justice within thirty days of the date of notifying them of the decision.

b/1) If the Controller approves the registration of the Company or such approval was secured by the Minister’s decision in accordance with the provisions of paragraph (a) of this Article, and after the shareholders submit documents which prove that not less than 50% of the Company capital has been deposited at a Bank in the Kingdom, the Controller shall collect the registration fees and issue a registration certificate to be published in the Official Gazette. In all cases, the remainder of the Company capital shall be paid within the two years following its registration. The deposited amount can not be disposed of for purposes that are not related to the Company.*

b/2) The provision of clause (1) of this paragraph shall be applied to any increase that may occur to the Company capital.

c) The bank with which any amounts of the Company capital have been deposited, the Company being in the founding stage, may not return it unless a certificate from the Controller attesting to desisting from establishing the Company has been presented it. This provision shall be applied upon any increase to the Company capital.▪

Article (60): Company Management

a) The Company shall be managed by a manager or Management Committee whose members shall not be less than two and not more than seven, whether they are shareholders or others, in accordance with the Company Memorandum of Association for a period of four years. The Memorandum may provide for a shorter period. The Management Committee shall elect a chairman, a deputy chairman and those authorized to sign on behalf of the Company.*

b) The manager of the Limited Liability Company or its Management Committee shall have full power to manage the Company within the limits specified by its Memorandum of Association. Transactions and actions realized or exercised by the manager or Management Committee in the name of the Company shall be binding on the Company before others dealing with the company in good faith, irrespective of any restriction stipulated in the Company Articles or Memorandum of Association.

c) Others dealing with the Company shall be considered bona fide unless the contrary is proven. However, others shall not be obligated to ascertain that there is any restriction on the powers of the managers or the Management Committee in their power to bind the Company under its Articles or Memorandum of Association.

Article (61): Responsibility of the Manager of the Company

The manager of a Limited Liability Company, whether the sole manager thereof or any one of the members of its Management Committee, shall be responsible to the Company, the shareholders and others for any violation of the provisions of this Law, the regulations issued in pursuance, the Company Articles and Memorandum of Association, and decisions issued by its General Assembly or Management Committee.

Article (62): Duties of the Manager of the Company*

The manager of a Limited Liability Company or its Management Committee shall prepare the Company annual balance sheet and final accounts including the profit and loss account, necessary clarifications and cash flow statement, fully audited by a licensed auditor in accordance with recognized and accredited international auditing principles, in addition to the annual report on the Company activities. The manager shall then submit them to the Company General Assembly, during its annual ordinary meeting and shall present the Controller with a copy thereof accompanied with the appropriate recommendations. This should be done within the first three months of the Company’s new fiscal year.

Article (63): Actions Prohibited to the Company Manager

a) The manager of a Limited Liability Company – whether a sole manager or a manager appointed by the Management Committee – and any member of the Management Committee shall be prohibited from assuming any position in any other company with objectives similar to or competitive with the Company business and from realizing any work similar to the Company business, whether for his own account or for the account of others, with or without payment, or to participate in managing another company having objectives similar to or competitive with those of the Company except with approval of the General Assembly by a majority vote of not less than 75% of the shares forming the Company capital.

b) If any of the persons mentioned in paragraph (a) of this Article fails to obtain the approval of the General Assembly, and the Controller is notified of the offence by a written notice from one of the shareholders, the Controller shall request the offending shareholder to rectify his status and remove the offence within thirty days of the date of his notification thereof. Otherwise the person shall be considered as having lost his membership in the Management Committee or his position in the Company by the operation of Law. He shall also be punished with a fine of not less than one thousand Dinars and not more than ten thousand Dinars and shall be obligated with the damage sustained by the Company or the shareholders.*

Article (64): The Company General Assembly

a) The General Assembly of a Limited Liability Company is composed of all the shareholders therein, and shall hold one annual meeting during the first four months of the Company fiscal year upon the invitation of either its manager or the chairman of the Management Committee and in the place and on the date specified thereof.

b/1) The General Assembly of a Limited Liability Company may hold one or more extraordinary meeting upon the request of its manager or Management Committee to discuss any of the issues falling within its jurisdiction in accordance with the provisions of this Law, in any of the following two situations:*

•               Upon the request of a number of shareholders holding at least one quarter of the Company capital provided that a copy of the request is sent to the Controller.

•               Upon the request of the Controller should he receive a request from shareholders holding at least 15% of the Company capital, and is satisfied with the reasons indicated therein.

2) Should there be no response to the request from the Management Committee’s manager within a week of the date of its submittal; the Controller shall call for a meeting at the Company expense.*

c) Any shareholder in a Limited Liability Company shall have the right to attend the ordinary and extraordinary meetings of the General Assembly to discuss issues presented therein, and to vote on the decisions thereof. The said shareholder may delegate another shareholder to attend the meeting on his behalf in pursuance to an empowerment form prepared by the Company management or in pursuance to a power of attorney. Empowerment or delegation to others in the same manner is permissible if the Company Agreement permits same.*

d) Each shareholder in a Limited Liability Company shall be notified to attend the meetings of the General Assembly whether these meetings are ordinary or extraordinary. Invitations shall be delivered by hand against a signature of receipt, or sent via registered mail at least fifteen days prior to the date set for the meeting, provided that the invitation includes the annual work schedule and is accompanied by the documents referred to in Article (62) of this Law. The shareholder shall be considered notified of the invitation within a period that does not exceed six days of the date of its deposit in the registered mail on his address registered at the Company.*

e) The Controller shall not be invited to attend meetings of the General Assembly of the Limited Liability Company, whether they are ordinary or extraordinary. However, the Company manager or Management Committee shall provide the Controller with a copy of the minutes of the meeting signed by the meeting’s chairman and the secretary thereof within ten days of the date of convening such meeting. The Controller may attend the meeting upon the request of the manager or Management Committee or upon a written request by shareholders holding at least 15% of the shares which form the company capital.

f) If the procedures set out in paragraph (d) of this Article are not observed the Controller may reject the meeting’s minutes and the decisions issued thereof unless the shareholder or shareholders, who were not notified and did not attend the meeting, agree in accordance with the aforementioned regulations to consider themselves notified without his or their shares entering the quorum set for issuing the decision.*

Article (65): The Legal Quorum for General Assembly Meetings

a) The quorum for the ordinary meeting of the General Assembly of the Limited Liability Company shall be valid if attended by a number of shareholders representing more than one-half of the Company capital whether they attend in person or by proxy. If such quorum is not present within one hour from the time set for starting the meeting, then such meeting shall be postponed to another date which will be held within fifteen days from the date set for the first meeting. The absent shareholders shall be notified of this, and the quorum at the second meeting shall be considered valid with the shareholders present regardless of their number or the percentage of shares owned by them in the capital.

b) The quorum for the extraordinary meeting of the General Assembly of the Limited Liability Company shall be valid if attended by a number of shareholders representing at least 75% of the shares which form the Company capital, whether in person or by proxy unless the Company Memorandum of Association provides for a higher majority. If however, the quorum is not present within one hour from the time set for starting the meeting, then it will be postponed to another date to be held within ten days from the date set for the first meeting. The absent shareholders shall be re-notified thereof, and quorum for the second meeting shall be valid if attended by at least 50% of the shares forming the Company capital, whether in person or by proxy unless the Company Articles of Association provides for higher majority. Should such quorum not be present the meeting shall be cancelled whatever the reasons for calling it.

Article (66): The Agenda for the Ordinary General Assembly Meetings

a) The agenda of the Limited Liability Company General Assembly in its ordinary annual meeting shall include the following:

•               Discussion of the report prepared by the manager or the Management Committee on the Company operations, activities, financial position during the past fiscal year, and future Company plans.*

•               Discussion and approval of the balance sheet, profit and loss account and cash flow of the Company after hearing and discussing the report of the auditors.▪

•               Election of the Company manager or its Management Committee, as the case may be, in accordance with this Law.

•               Election of the Company auditors and determination of his remuneration.

•               Any other matters which the Company manager or Management Committee may present to the

•               General Assembly, or any issue presented by any shareholder which the General Assembly accepts to discuss. Provided that none of these issues is of the type which can only be discussed in an extraordinary meeting in accordance with this Law.

b) The General Assembly of a Limited Liability Company shall adopt its decisions with respect to any of the issues stipulated in paragraph (a) of this Article by majority votes of the shares of the capital represented in the meeting and each share shall have one vote.

Article (67): The Agenda for the Extraordinary General Assembly Meeting

a) The General Assembly of a Limited Liability Company shall be invited to an extra-ordinary meeting. None of the following issues can be discussed unless they have been stated in the agenda for this meeting:

•               The amending the text to the Company Articles or Memorandum of Association.

•               Increase or decrease of the Company capital and determination of the share premium or discount, provided that the provisions stipulated in Article (68) of this Law pertaining to the decrease of the Company capital are observed and that the method of increasing the capital is specified.

•               Merger or incorporation of the Company by any of the incorporation methods stated in the Law.

•               Dissolution and liquidation of the Company.

•               Discharge of the Company manager or its Management Committee or any of its members.

•               Sale of the Company or all of its assets, or the ownership of another company or buying all or part of its assets.

•               Guarantee of third parties’ obligations if the Company interest so requires.

•               Any issue that falls within the jurisdiction of the extraordinary General Assembly stated in this Law or the Company Memorandum of Association.

b) Notwithstanding the provisions stipulated in Articles (68) and (75) of this Law and if the aim is to restructure the capital, the Company may decrease and re-increase its capital at the same extraordinary meeting of the General Assembly convened in accordance with the provisions of the Law for this purpose, provided that the invitation shall contain the justifications and feasibility which this procedure aims at, and that the restructuring of the capital shall be published in two local newspapers for at least one time.

c) The General Assembly of the shareholders in a Limited Liability Company may at its extraordinary meeting discuss any of the issues mentioned in Article (66) of this Law, provided that the said issues are listed in the invitation for the meeting. The assembly shall adopt its decisions by the majority of the capital shares represented in the meeting.

d) The General Assembly of a Limited Liability Company shall adopt its decisions in respect of any of the issues provided for in paragraph (a) of this Article by a majority of not less than 75% of the capital shares represented in the meeting, unless the Company Memorandum of Association provides for a greater majority. Decisions adopted by the General Assembly regarding the issues mentioned in clauses (1), (2), (3), (4) and (6) of paragraph (a) and paragraph (b) of this Article shall be subject to the provisions of approval, registration and publication stipulated in this Law.

e) If the General Assembly fails, during its ordinary or extraordinary meetings, to reach a decision as a result of a tie in the votes in two consecutive meetings, the Controller shall grant it a period that does not exceed thirty days to reach the appropriate decision. In case such a decision is not reached the Controller is entitled to refer same to Court to decide on its liquidation.

Article (68): Decrease of the Company Capital

a) A Limited Liability Company may decrease its capital if same exceeds its needs or if the Company sustains losses amounting to more than 50% of the said capital, provided that the provisions of Article (75) of this Law are observed.

b) The Controller shall at the expense of the Limited Liability Company publish an announcement, on three consecutive days in at least one daily newspaper, of the Company decision to decrease its capital. The Company creditors shall have the right to submit a written objection against the said decision to the Controller within fifteen days from the last date of publication of the said announcement. Any creditor shall also have the right to appeal the decision regarding the decrease of the Company capital before the Court if the Controller fails to settle his objection within thirty days from the date of the submission of the said objection thereto, provided that such an appeal does not stop the decrease procedures, unless the Court decides so.*

Article (69): Publication of the Annual Balance Sheet

A Limited Liability Company is exempted from publishing its annual balance sheet, its profit and loss account and a summary of the report of its manager or Management Committee in the local newspapers.

Article (70): The Statutory Reserve and the Voluntary Reserve

a) A Limited Liability Company shall deduct 10% of its annual net profits for the account of the statutory reserve, and shall continue to deduct the same percentage each year provided that the total deducted amounts for the said reserve shall not exceed the Company capital.

b) The General Assembly of a Limited Liability Company may decide to deduct an amount not exceeding 20% of the Company annual net profits for the account of the voluntary reserve. The General Assembly may also decide to either use this reserve for the Company purposes, or it may distribute it among the shareholders as profit, if not used for those purposes.

Article (71): Shareholders Register

a) The Limited Liability Company shall keep at its headquarters a special register for the shareholders in which the following information pertaining to them shall be recorded. The Company manager or its Management Committee shall be responsible for this register and for the accuracy of the information listed therein:

•               Name of shareholder, his title if any, nationality, domicile and exact address.

•               Number and value of shares owned by a shareholder.

•               Alterations that may occur on a shareholders share(s), its details and dates thereof.

•               Attachments, mortgages or any other liens and the details that may occur to a shareholders share(s).

•               Any other information that the manager of the Company or its Management Committee decides to record in the register.

•               Each shareholder in the Company shall have the right to examine the register either in person or through a person authorized in writing therewith.

b) The manager of a Limited Liability Company or the chairman of its Management Committee, shall annually and within the first month following the end of the Company fiscal year, provide the Controller with the particulars included in the shareholders register provided for in paragraph (a) of this Article and with any amendment, change or alteration that may occur in this respect thereof, within a period not exceeding thirty days from the date the change or the alteration take place.

Article (72): A Shareholders Assignment of his Shares in the Company *

a) A shareholder in a Limited Liability Company may assign his shares in the Company to any of the shareholders or to others as per an assignment deed in accordance with the form adopted by the Controller. The assignment deed shall be signed in accordance with the procedures followed in registering the Company in pursuance to the provisions of this Law.

b) In all cases, the assignment deed shall be authenticated with the Controller, announced and its due fees collected. This assignment may not be used as evidence against the Company, shareholders or others except from the date of its authentication with the Controller.

c) A shareholder may assign his shares in the Company by means other than their sale to his spouse, or a relative up till the third degree or a mortmain, and shall inform the manager or Management Committee of this assignment unless the Company Memorandum of Association provides otherwise.

Article (73): The Sale by a Shareholder of his Share in the company

a) Should a shareholder in the Company wish to sell all or part of his shares to a third party, the shareholder shall submit an application regarding this issue to the Company manager or Management Committee, as the case may be, and copies of same to the shareholders and the Controller indicating the price he is requesting and the number of shares he wishes to sell. The manager or Management Committee shall notify the remaining shareholders of the conditions for assignment, either by hand, against signature, or via registered mail within a week of the application. The shareholders shall have a preemptive right to purchase the shares at the offered price and the manager or chairman of the Management Committee shall notify the Controller in writing of his notification to the shareholders. Otherwise same will be held responsible for any damage that may befall an affected shareholder.*

b) Should more than one shareholder offer to purchase the share(s) to be assigned at the offered price, the shares shall then be divided among those shareholders wishing to purchase each in proportion to the percentage of his share in the Company capital. In event of disagreement on the price, the Controller shall, at the seller and buyer’s expense, appoint a licensed auditor in order to determine the price, and the evaluation of which shall be final, and the shares shall be divided among the shareholders who wish to purchase. If the shareholder does not observe the completion of the sale or purchase after the issuing of the report then he shall be responsible for the expenses born towards the Company.▪

c) Should a period of thirty days lapse from the date on which the shareholders are notified of the sale conditions without any of them expressing a wish to purchase, whether at the offered price or at the price evaluated by the licensed auditor, the shareholder wishing to sell shall have the right to sell his share to a third party at the price offered or at the evaluated price as a minimum.

d) Should any of the shareholders or a third party not express a wish to purchase the share(s) on sale within thirty days of the expiry of the period specified in the above-mentioned paragraph (c) to the effect that the sale of the share(s) becomes impossible, then the person wishing to sell may request the Controller to sell the shares at a public auction, in accordance with directives issued by the Minister in pursuance to the Controller’s recommendation for the purpose of carrying out the sale by public auction.*

Article (74): A Shareholder’s Preemptive Right to Purchase a Shareholder’s Share in the event an Execution Order Concerning the Share has been Issued

a) If a Court decision is issued regarding an execution on the share(s) of any shareholder who is indebted then the preemptive right for purchasing such share or shares shall be given to the remaining shareholders in the Company. If none of the shareholders offers to purchase same or if agreement on the price has not been reached within thirty days of the date of issue of the conclusive decision, then such shares shall be offered for sale at a public auction. Each shareholder in the Company may participate in his name in the auction on the same footing with others and purchase such share(s) for himself.

b) The Controller shall issue the necessary regulations for implementing the sale at a public auction, for the purpose of this Article.

Article (75): Company Losses*

a) Should the losses of the Limited Liability Company exceed half of its capital, the Company manager or its Management Committee shall invite the Company’s General Assembly to an extraordinary meeting in order to decide on whether the Company should be liquidated or continue to exist in a manner that would rectify its position. If the General Assembly fails to reach a decision in this respect within two consecutive meetings, the Controller shall grant the Company a grace period of not more than a month to reach the decision. If it fails in reaching a decision, the Company shall be referred to Court for the purposes of compulsory liquidation in accordance with the provisions of the Law.

b) Should the Company’s losses amount to three quarters of its capital, the Company shall be liquidated unless the General Assembly decides in an extraordinary meeting to increase the Company’s capital to deal with the losses or quench the losses in accordance with the accredited international accounting and auditing standards, provided that the total of the remaining losses does not exceed half of the Company’s capital in both cases.

Article (76): Application of Provisions Pertaining to a Public Shareholding Company over a Limited Liability Company

The provisions pertaining to the Public Shareholding Company shall apply to the Limited Liability Company where there is no clear provision in respect thereof in the provisions relating to Limited Liability Companies.

Article (77): Founding of a Limited Partnership in Shares

A Limited Partnership in shares is composed of the following two categories of partners:

a) General Partners:

Their number shall not be less than two and they shall be liable for the Company debts and obligations in their personal property.

b) Limited Partners:

Their number shall not be less than three, and each partner shall be liable for the Company debts and obligations in proportion to his shareholding.

Article (78): Capital of the Limited Partnership

a) The capital of the Limited Partnership in share shall not be less than one hundred thousand Jordanian Dinars divided into negotiable shares of equal value. The value of each indivisible share is one Jordanian Dinars, provided that the Partnership’s capital offered for subscription shall not exceed double the shares subscribed for by the general partners in the Partnership.

b) Notwithstanding the provision of paragraph (a) of this Article, the general and limited partners may agree in the Limited Partnership’s Articles and Memorandum of Association to the existence of types of shares that have a voting power and on the method of distributing profits and losses. They may also agree on the prohibition of assigning general partners’ shares within a certain period from the date of founding.■

c) If the partners agree on any of the matters stated in paragraph (b) of this Article, then it shall be reflected in the issuance prospectus when the shares are issued for subscription.▪

Article (79): Address of the Limited Partnership

The name of the Limited Partnership in Shares shall be formed from one name or more of the general partners, provided that the name is followed by the words “Limited Partnership in Shares”, and what is indicative of its objectives. The name of the limited partner may not be indicated in the Partnership’s name. If the name of the limited partner was stated with his knowledge, he shall then be considered a general partner before bona fide third parties.

Article (80): Registration of the Limited Partnership

The registration of the Limited Partnerships in Shares shall be subject to the approval of the Controller.

Article (81): Management of the Limited Partnership

a) The Limited Partnership in Shares shall be managed by one or more general partner(s), whose number, authorities and duties are indicated in the Partnership’s Memorandum of Association. Their powers, responsibilities and dismissal shall be subject to the provisions applied to authorized partners in the General Partnership.

b) If the position of the manager of the Limited Partnership in Shares becomes vacant at any time and for any reason whatsoever, the general partners shall appoint a manager from amongst them. In the event they fail to do so, the Supervisory Council provided for in Article (84) of this Law shall appoint a temporary manager to undertake the management of the Company, provided that the Partnership’s General Assembly shall be called upon to convene within thirty days from the date of the appointment of the temporary manager to elect a manager from amongst the general partners.

Article (82): Application of General Partnership Provisions to General Partners in the Company

The provisions of the General Partnership stipulated in this Law shall apply to general partners in the Limited Partnership in Shares. A limited partner in this Partnership shall be subject to the provisions provided for in Article (43) related to the Limited Partnership.

Article (83): The Limited Partnership’s General Assembly

a) The General Assembly of a Limited Partnership in Shares shall consist of all the general and the limited partners. Each one of the partners shall have the right to attend the Partnership’s General Assembly meetings, whether ordinary or extraordinary meetings of the General Assembly, to discuss the issues presented before it and to vote on any decisions made. Each partner shall have a number of votes in the General Assembly equal to the number of his shares in the Partnership’s capital.

b) The provisions for ordinary and extraordinary meetings of the General Assembly of Public Shareholding Companies which are stipulated in this Law shall apply to the meetings of General Assemblies of Limited Partnerships in Shares.

Article (84): The Supervisory Council

Each Limited Partnership in Shares shall have a supervisory council composed of at least three members who shall be elected annually by the limited partners from amongst them for one year in accordance with the procedures stipulated in the Partnership’s Memorandum of Association.

Article (85): Duties and Responsibilities of the Supervisory Council

The supervisory council of the Limited Partnership in Shares shall assume the following duties and responsibilities:

a) To supervise the progress of the Partnership’s operations, to verify the accuracy of the founding procedures thereof, and to request the Partnership’s manager to furnish the council with a detailed report on the said operations and procedures.

b) To examine the Partnership’s records, registers and contracts and to prepare an inventory of the Partnership’s properties and assets.

c) To give advice on issues that the council deems important to the Partnership or on issues submitted thereto by the manager(s).

d) To approve any actions and business which the Memorandum of Association of the Partnership states that the execution thereof requires the approval of the council.

e) To invite the Partnership’s General Assembly to an extraordinary meeting should it become evident to it that violations have been committed in the course of managing the Limited Partnership. The violations shall be presented to the General Assembly.

Article (86): Obligations of the Supervisory Council

The supervisory council of a Limited Partnership in Shares shall submit to the shareholders in the Partnership at the end of each fiscal year a report on the supervisory activities carried out thereby and the results thereof. This report shall be presented to the General Assembly of the Company at its annual ordinary meeting. A copy of same shall be sent to the Controller.

Article (87): The Auditor

Each Limited Partnership in Shares shall have an auditor to be elected by its General Assembly. The provisions concerning auditors in Public Shareholding Companies stipulated in this Law shall apply to the said auditors.

Article (88): Dissolving and Liquidation of a Limited Partnership

The Limited Partnership in Shares shall be dissolved and liquidated in the manner determined by the Partnership’s Memorandum of Association. Otherwise, it shall be subject to the provisions for the liquidation of a Public Shareholding Company.

Article (89): Application of the Public Shareholding Company Provisions to the Limited Partnership in Shares

The provisions for Public Shareholding Companies stipulated in this Law shall apply to Limited Partnership in Shares in all matters not provided for in this part.

Article (90): The Founding of the Public Shareholding Company, its Address and Duration

a) A Public Shareholding Company shall consist of a number of founders not less than two who subscribe for shares that can be listed on the Stock Exchange and may be negotiated and transferred in accordance with the provisions of this Law and any other legislation in force.

b) Subject to the provisions of Article (99) of this Law, the Minister may, upon a justifiable recommendation by the Controller, approve that the Limited Public Shareholding Company be established by one person, or that the Company ownership devolves to one person in the event he purchases all its shares.■

c) The name of the Public Shareholding Company is derived from its objectives provided that wherever the name appears it shall be followed by the words “Limited Public Shareholding Company”. The Company shall not be registered in the name of a natural person unless the objective thereof is the exploitation of a patent duly registered in the name of the said person.

d) The term of the Public Shareholding Company shall be indefinite unless the objectives thereof is to realize a certain business, in which case, the duration thereof shall end upon the completion of that business.

Article (91): Financial Liability of the Company

The financial liability of the Public Shareholding Company is deemed independent from the financial liability of each Shareholder therein. The Company shall, with its assets and properties, be liable for its debts and obligations and the Shareholder shall not be liable before the Company for such debts and obligations except in proportion of the shares he owns in the Company.

Article (92): Registration of the Company

a) The application for the formation of the Company shall be submitted by the Company founders to the Controller on the form designated for such purpose and accompanied by the following:

1.             The Company Articles of Association.

2.             Its Memorandum of Association.

3.             Names of the Company founders.

4.             The founders’ minutes of meeting that include the election of the founders’ committee which will supervise the founding procedures and set the signing authorization on behalf of the Company during the formation period.■

5.             Name of the auditor chosen by the founders for the formation period.▪

b) The Shareholding Company Articles of Association and Memorandum of Association should include the following information:

•               Name of the Company.

•               Company headquarters.

•               Objectives of the Company.

•               Names of the Company founders, their nationalities, chosen notification addresses, and the number of shares subscribed for.

•               The authorized capital of the Company and the subscribed part thereof.

•               A statement of the in-kind shares in the Company, if any, and the value thereof.

•               Whether the shareholders and the holders of convertible bonds hold preemptive right to subscribe for any new issues to be made by the Company.

•               The manner in which the Company is managed and the authorized signatories during the period between its founding and the first General Assembly meeting which should be held within sixty days of the date of founding of the Company.

•               Specification of the manner, form, and method of inviting the Company Board of Directors to its meeting.■

c) The Articles of Association and Memorandum of Association of the Public Shareholding Company shall be signed by each founder before the Controller or any person delegated by him in writing or before a Notary Public or a licensed lawyer.

Article (93): Operations Limited to Public Shareholding Companies

The following operations may not be carried out, except by Public Shareholding Companies which are formed and registered in accordance with the provisions of this Law:

a) Banking Operations, financial institutions and all types of insurance.

b) Companies awarded concessions.

Article (94): Acceptance and Rejection of a Company Registration

a) Upon the recommendation of the Controller, the Minister shall issue his decision approving or rejecting the registration of the Company within a maximum period of thirty days from the date of the Controller’s recommendation. The Controller shall make the recommendation within thirty days from the date of submitting the application to him which shall be signed by the founders and which shall fulfill the legal conditions. Should the Minister fail to issue this decision during that period, the application shall be deemed approved.

b) In the case the Minister rejects the registration of the Company its founders may challenge his decision before the Higher Court of Justice.

Article (95): Fixing the Company Capital and Duration of Paying the Unsubscribed Part

a) The authorized capital of the Public Shareholding Company and the subscribed part shall be fixed in Jordanian Dinars and shall be divided into nominal shares at a par-value of one Dinar each, provided that the authorized capital shall not be less than five hundred thousand (500,000) Dinars and the subscribed capital shall not be less than one hundred thousand (100,000) Dinars or twenty percent (20%) of the authorized capital, whichever is greater.

b) Subject to the provisions of paragraph (d) of this Article, the un-subscribed capital shall be paid within three years of the date of the Company founding or the increase of the capital, as the case may be. In the event of default in payment of the un-subscribed capital within the said period, the following should be observed:■

1.             If the subscribed capital exceeds five hundred thousand (500,000) Dinars at the end of the period, the authorized capital of the Company shall be become its actual subscribed capital.

2.             If the subscribed capital is less than five hundred thousand (500,000) Dinars at the end of the period, the Controller shall issue a warning to the Company to pay the necessary difference in the amount with the effect that the actual subscribed capital of the Company becomes five hundred thousand (500,000) Dinars within thirty days from the date the notice is served to the Company. Should the Company fail to do so, the Controller shall have the right to request the Court to liquidate the Company in accordance with the provisions of Article (266) of this Law.

c) The Company Board of Directors may re-issue the un-subscribed shares of the authorized capital of the Company as the Company interests may warrant, and at the value which is deemed proper by the Board, whether such value is equivalent to the nominal value of the share, or higher or lower than it, provided that such shares shall be issued in accordance with the provisions of the applicable regulations and legislations in force.■

d) The Board of Directors of the Public Shareholding Company shall obtain the approval of the extraordinary General Assembly in the event that the un-subscribed shares are covered by any of the following methods:

1.             Incorporating the voluntary reserve into the Company capital;

2.             Capitalization of the Company debts or any part thereof provided that the creditors of these debts consent thereto in writing;

3.             Conversion of convertible bonds into shares in accordance with the provisions of this Law.

e) It shall be permissible by a decision of the General Assembly in accordance with rules set by same for this purpose to allocate a part of the Company un-subscribed capital as an incentive to the Company employees. In such a case, this part may continue to be offered to them for a period that does not exceed four years as of the date of the Company registration or the increase in its capital, as the case may be.▪

f) The Board of Directors may issue shares as provided for by the provisions of the Securities Law in force.

Article (96): Indivisibility of Shares

The share of a Public Shareholding Company shall be indivisible. However, the heirs may jointly own one share as the successors of their predecessor. This provision shall also apply to the heirs if they have jointly inherited more than one share of their predecessor’s estate, provided that they, in both cases, choose one of them to represent them in and before the Company. Should they fail to do so within the period determined by the Company Board of Directors, the Board may appoint one of them to be their representative.

Article (97): Company Shares and Payment of their Value

a) Shares of the Public Shareholding Company are cash shares and the value of the subscribed shares shall be paid in one installment. The Company shares may be in-kind given against in-kind payments evaluated in cash in accordance with the provisions of this Law. Concession rights, patent rights, technical know-how and other intangible rights, that the founders approved as in-kind assets provided that a report specifying their value is prepared by experienced and specialized people is presented and provided the following is observed:■

1.             If the in-kind payments holders fail in their delivery or the transfer of their title to the Company within a month from the date of their registration, they shall be obligated by operation of law to pay their value in cash in accordance with the price adopted by the founders in the founding application of the Company. The Controller may request a proof of the validity of the monetary evaluation of the in-kind payments.

2.             If the Controller is not convinced of the validity of the in-kind shares’ evaluation presented by the founders, then the Minister may form a committee, at the expense of the Company, of experienced and specialized persons to evaluate same in cash, provided that the committee’s members include a founder. The Committee shall submit its report to the Controller during a maximum period of thirty days from the date of its formation. The founders may object on the report to the Minister within ten days from the date it is approved by the Controller.

b) The Minister shall resolve the objection within two weeks of its submittal. If the Minister accepts the objection then the Company registration will be rejected unless the founders reconsidered and accepted the evaluation, whereupon the registration procedures will be completed. The founders or subsequent shareholders shall have no right to object to the value of the in-kind shares presented in the founding stage.■

Article (98): The Shareholders Register and the Number of Shares Held by Each

a) The Public Shareholding Company shall keep one or more register wherein shall be recorded the names of shareholders, the numbers of shares held by each one of them, and any conversion procedures affecting same and other information relating thereto and to the shareholders.

b) Subject to the provisions of paragraph (c) of this Article, the Company may file copies of the registers referred to in the abovementioned paragraph (a) with any other authority for the purpose of following up the affairs of shareholders, and it may authorize such authority to keep and organize these registers.▪

c) The Public Shareholding Company shall list its shares in the Market and shall follow the rules and procedures provided for in the laws, regulations and instructions which regulate the negotiability of securities in the Kingdom and which are related to the delivery of the registers referred to in the abovementioned paragraph (a) to the authority determined by such laws, regulations and instructions.▪

d) Any shareholder in the Company may have access to the shareholders register in connection with his shareholding for whatever reason, and to the entire register for any reasonable cause. Any other person with interest, at the discretion of the Court, may request the Company to review the shareholders register. In all cases, the Company may charge a reasonable fee in case any person or shareholder wishes to reproduce the register or any part thereof.

e) The Public Shareholding Company may purchase shares issued by it and sell same in accordance with the provisions of the Securities Law and the regulations and instructions issued in pursuance.■

Article (99): Underwriting the Value of the Founders’ Shares

a) Upon signing the Articles and Memorandum of Association of a Public Shareholding Company, the founders thereof should underwrite the entire value of the shares subscribed for them, and shall provide the Controller with evidence to that effect provided that the percentage of shares subscribed for by the founders in banks and financial institutions shall not exceed 50% of the authorized capital and that the number of founders therein shall not be less than fifty (50) persons.▪

b) The shareholding of the founder(s) of the Public Shareholding Company upon its founding shall not exceed 75% of the authorized capital. The founder or founders’ committee should offer the remaining shares for subscription as permitted by the Securities Law in force. However, the partners in the companies transformed from Limited Liability or Limited Partnership in Shares or Private Shareholding Company to a Public Shareholding Company may underwrite the complete difference in the authorized capital of the Company or may offer the remaining shares for public or private subscription in accordance with the procedures provided for in the Securities Law.▪

c) The founders of the Public Shareholding Company are prohibited from subscribing in the shares offered for subscription at the founding stage. However, they may underwrite the remaining shares after the lapse of three days from closing the subscription.

d) In all events, if all shares offered for subscription are not underwritten, the Company may be registered with the number of shares subscribed for provided that the subscribed capital shall not be less than the minimum limit stipulated in Article (95) of this Law and that the number of subscribers is not less then two.■

Article (100): The Period during which a Founding Share may not be Disposed of and Exception to this Prohibition

a) The founding share in the Public Shareholding Company may not be disposed of prior to the lapse of at least two years from the founding of the Company. Any action in violation of the provisions of this Article shall be null and void.

b) There shall be excluded from the restriction imposed in paragraph (a) of this Article the transfer of founders’ shares to the heirs and between spouses, ancestors and descendants, as well as transfers among the founders themselves, and the transfer of the founders’ share to third parties under a judicial decision, or as a result of selling same at public auction in accordance with the provisions of the Law.

Article (101): Underwriting the Value of shares by an Underwriter

Subject to the provisions stipulated in any other law, founders of the Public Shareholding Company or its Board of Directors may entrust the underwriting of the Company shares to one or more Underwriter.

Article (102): Principals of Subscription in Shares

a) It is not permitted for more than one person to participate in one subscription application in the offered shares. Fictitious subscriptions or subscription in fictitious names are prohibited and will be considered invalid in any of the cases provided for in this paragraph.■

b) Subscription in the shares of the Public Shareholding Company shall take place in a manner that conforms with the provisions of this Law and other applicable laws.

Article (103): Providing the Controller with Subscribers’ Names

The Company shall provide the Controller, within a period not exceeding thirty days from the closing date of any subscription in the shares of the Public Shareholding Company, with a statement containing the names of subscribers and the value of the shares subscribed for by each one of them.

Article (104): Allocation of Shares

If subscription in the shares of the Public Shareholding Company is in excess of the number of shares offered for subscription, the Company should allocate the shares offered for subscribers in accordance with the laws and regulations in force.

Article (105): Refunding Excess Amounts upon the Allocation of Shares

The Company shall be held responsible for refunding the amount in excess of the value of the Public Shareholding Company shares offered for public subscription to the subscribers within a maximum period of thirty days from the closing date of the said subscription or the determination of the allocation of shares, whichever is earlier. Should the Company fail to do so for any reason whatsoever, then those entitled to such amounts shall receive interest thereon to be computed as of the beginning of the month immediately following the thirty day period stipulated in this paragraph. This interest shall be equal to the highest interest rate prevailing between Jordanian Banks on time deposits during that month.

Article (106): The Agenda of the General Assembly’s First Meeting

a) The first meeting of the General Assembly of the Public Shareholding Company, referred to in Article (92) of this Law, shall be presided over by a member of the founders’ committee of the Company who are entrusted with management of the Company in accordance with the provisions of Article (92) of this Law. At such meeting, the General Assembly shall carry out the following:

•               To review the report of the Company founders’ committee who are entrusted with management of the Company, which should include sufficient information and data related to the founding activities and procedures along with supporting documents. The General

•               Assembly shall also ascertain the information and data’s authenticity and to what extent they conform to the Law and to the Company Memorandum of Association.

•               To review and discuss the audited founding expenses that are authenticated by the Company auditor and to take the appropriate decisions in their respect.■

•               To elect the first Board of Directors of the Company.

•               To appoint an auditor or auditors for the Company and to fix their remuneration or to authorize the Board of Directors to fix same.

b) The first meeting of the General Assembly shall be subject to the procedures, invitation requirements, legal quorum and the adoption of the decisions applied to the ordinary meetings of the Company General Assembly.

c) The powers and functions of the founders’ committee of the Public Shareholding Committee shall cease upon the election of the first Board of Directors of the Company and same shall hand over to this Board all documents and instruments related to the Company.

Article (107): Objection by Shareholders to Founding Expenses■

Should shareholders in the Public Shareholding Company, holding at least 20% of the shares represented in the first meeting of the Company General Assembly, object to any of the items of the Company founding expenses, the Controller shall ascertain the authenticity of the objection and settle same. If he fails to do so for any reason whatsoever, the objectors may file a case before the Court. This case will not affect the proceeding of the Company in its operations unless the Court decides otherwise.

Article (108): Providing the Controller with a Copy of the Minutes of the General Assembly’s First Meeting

a) The chairman of the first Board of Directors of the Company shall provide the Controller with a copy of the minutes of the first meeting of the Company General Assembly together with the documents and statements submitted by the Company founders’ committee to the General Assembly within fifteen days from the date of the first meeting of the General Assembly.

b) Should it become evident to the Controller that the Public Shareholding Company has neglected during its founding stage to comply with any legal text or provision or has violated that text or provision then he shall send a written notice to the Company to correct its position within three months from the date of the notice. If the Company does not abide by the notice, the Controller shall then refer it to the Court.

c) Should it become evident to the Controller after examining the documents submitted to him in accordance with the provisions of paragraph (a) of this Article that the procedures followed for the founding of the Public Shareholding Company are legally proper, he shall then notify the Company in writing of its right to commence its operations.

Article (109): Conditions of Offering In-kind Shares

a) The founders of a Public Shareholding Company may offer, in exchange for their shares in the Company, in-kind payments evaluated in cash, provided that the provisions listed in Article (97) of this Law are observed.■

b) As for the in-kind shares offered at any stage subsequent to the founding, the approval of the extraordinary General Assembly on the value of the in-kind payments should be obtained.

c) Any shareholder who has attended the extraordinary meeting of the General Assembly and registered his objection in the minutes of that meeting may appeal the value of the in-kind payments before the competent Court within fifteen days of the date of the meeting.

Article (110): Conditions of Issuing In-kind Shares

The in-kind shares of the Public Shareholding Company shall not be issued to the owners thereof until the completion of the legal procedures for the delivery of the in-kind payments to the Company and the transferring their title thereof.

Article (111): In-kind Shares Owners Rights

Owners of in-kind shares in a Public Shareholding Company shall enjoy the same rights enjoyed by owners of cash shares in the same Company. Should the in-kind shares be founding shares then they shall be subject to the restrictions applied to the cash founding shares.

Article (112): Increasing the Authorized Capital

The Public Shareholding Company may increase its authorized capital with the approval of its extraordinary General Assembly if such capital has been subscribed for in full, provided that the approval shall contain the method of underwriting the increase.

Article (113): Methods of Increasing the Capital

Subject to Securities Law, the Public Shareholding Company may increase its capital by one of the following methods or by any other method approved by the Company General Assembly:

1.             Offer the increase shares for subscription by shareholders or others.

2.             Incorporation of the voluntary reserve or the accumulated deferred profits or both to the Company capital.

3.             Capitalization of the debts due by the Company, or any part thereof, provided that the written approval of these debts’ creditors is obtained.

4.             Transferring the transferable bonds to shares, in accordance with the provisions of this Law.

Article (114): Reducing the Unsubscribed Capital

a) A Shareholding Company may, by a decision of the extraordinary General Assembly, reduce the unsubscribed portion of its authorized capital. It may also reduce its subscribed capital if it is in excess of its needs or if it sustains any loss and the Company decides to reduce its capital in the same amount of such loss or any part thereof provided that the Company shall observe in the reduction decision and in its procedures the rights of third parties stipulated in Article (115) of this Law.

b) The reduction in the subscribed capital shall be made by reducing the value of shares, by canceling the portion of their paid value equal to the amount of the loss, if there is a loss in the Company or by refunding a portion thereof if the Company deems that its capital is in excess of its needs.

c) The capital of the Public Shareholding Company in any case may not be reduced below the minimum limit stipulated in Article (95) of this Law.

d) If the aim is to restructure the Company capital, then the decision to reduce or increase its capital, may be taken in the same extraordinary General Assembly meeting, provided that the reduction procedures stipulated in this Law are completed after which the increase procedures are completed and that the invitation to the meeting contain the reasons for restructuring and the objectives of such a procedure.■

Article (115): Procedures for the Reduction of the Capital

a) The Board of Directors of the Public Shareholding Company shall submit the application for the reduction of its subscribed capital to the Controller together with the reasons that require such a reduction. This can only be made following the approval of the Company General Assembly of such reduction by a majority of at least seventy-five percent (75%) of the shares represented in its extraordinary meeting which is held for that purpose. A list of the names of the Company creditors, the amount of the debt of each of them, his address, and a statement of the Company assets and liabilities shall be attached to the application provided that same is certified by its auditor.

b) The Controller shall notify the creditors whose names appear in the list submitted by the Company of the decision of the Company General Assembly regarding the reduction of its subscribed capital. The notice shall be published in two local daily newspapers at the Company expense. Each creditor may submit to the Controller, within thirty days from the date of publishing the last notice, a written objection against the reduction of the Company capital. If the Controller fails in settling the objections submitted to him within thirty days following the date of the expiry of the period fixed for submitting same, the objectors shall have the right to bring their case before the Court in respect of their objections within thirty days of the date of expiry of the period granted to the Controller to settle such objections. Any case brought before the Court after the lapse of said period shall be dismissed.

c) Should the Controller receive a written notice from the Court informing him of any case that has been filed with it within the period specified in paragraph (b) of this Article to contest the reduction of the subscribed capital of the Company, then same shall stop the reduction procedures until a Court decision is issued and becomes final. The case in this instance is considered of an urgent nature in accordance with the Law of Civil Courts Procedures in force.

d) If no case has been brought before the Court to contest the decision of the Company General Assembly regarding the reduction in its subscribed capital, or if a case has been filed but dismissed by the Court and the Court’s decision became final, the Controller must continue considering the reduction of the Company capital and must submit his recommendation regarding same to the Minister to issue the decision he deems appropriate. Should the Minister approve the reduction, the Controller shall register and publish the said reduction decision at the Company expense in accordance with the procedures provided for in this Law so that the reduced capital of the Company shall by operation of law replace its capital listed in its Articles and Memorandum of Association.

e) The reduction of the unsubscribed portion of the authorized share capital shall not be conditional on the approval of the Controller and creditors.

Article (116): Definition of Corporate Bonds■