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- Partners and Shares
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- Reserve Trade Name (Terms & Regulations)
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Partners and Shares
A partner is defined as a natural person or legal person who has invested or is involved in an entity’s business dealings. A legal person refers to a non-human entity like a corporation company, government and non-government organization, committee or commercial organization, which has legal rights and responsibilities and is subject to commitments. A partnership arise whenever two or more persons co-own a business and share in the profits and losses of the business. Partnerships may be between a natural and legal person, between two natural persons or between two legal persons. Partners own shares in a company, which essentially makes them part owners.
Types of partners :
- General partners
This involves two or more partners that share equal rights and responsibilities in the management, debts and obligations of the business.
- Limited partners
In this instance, partners are liable only to the extent of their financial investment in the business. A limited partnership requires at least one general partner who retains the right to control the business and bear responsibility for the business’s obligations and liabilities.
Both general and limited partners benefit from business profits.
- Founders of Public and private shareholding
Public and private shareholding companies comprise a minimum of five founders who are also the shareholders. While the public shareholding company offers shares for public subscription on the Qatar Stock Market, private shareholding companies distribute their shares among their shareholders and do not publicly list them.
- Sole Proprietorship
This refers to a natural person who is at least 18 years and above owning and running a business and is responsible for its debts. In a Sole Partnership, personal responsibility only extends to his/her own money only in the case of individual establishment. In the case of LLC, he/she is responsible to the extent of the company's capital and assets.
- Adding partners
Partners may generally agree to add partners in an existing partnership in the following ways:
- The new partner could buy some of the shares from an existing partner
- Investing in the partnership therefore increasing the shares or capital in the business
- Buying out shares from a partner that is leaving or stepping down as partner from the business
- Shares
According to Qatar’s company laws, a partner’s share shall be a specific sum of money or in kind, that serves the purposes of the company. It may also be work provided by the partner himself. A company’s capital can comprise both in cash and in kind, or either of the two. There is no specified ratio of how much cash or in kind each partner is expected to pay. If a share is made in kind, a financial evaluator is brought in to ascertain its value in cash.
Partners have the right to determine the percentages or number of shares each is entitled to as per the signed agreement between the parties. The profits or losses are shared and distributed based on the ownership percentage each partner holds unless stipulated otherwise in the article of association or contract signed by the partners.
Qatar’s law stipulates that any foreigners requiring setting up businesses in the country must have a local (Qatari) partner who must hold the majority share or interest in the business. Generally, foreign investors can own up to 49 per cent of the share capital while one or more partners that are Qatari must hold the remaining 51 per cent.
The law also stipulates that a foreign business owner can exceed the 49 per cent share to own up to 100 per cent pending a decision by the Minister of Commerce and Industry provided the business aligns with Qatar’s development plans. Foreign partners managing a business must also obtain sponsorship from the business in which they own shares
