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Find Out Best Legal Form for Your Business

The legal forms of companies, offices and business establishments vary in terms of capital, stocks, number of partners, etc. It is important to have the know-how of the different legal forms of companies and institutions in order to be well informed on the best form to select especially when establishing a company.

Public Shareholding Company

Definition It comprises a minimum of five shareholders and its capital should not be less than ten million Qatari riyals. In this form, company shares shall be offered for public subscription (to be traded on Qatar Stock Exchange) and each shareholder is liable only to the value of his shares.
Capital & Shares Capital should not be less than ten million Qatari riyals, which shall be sufficient to achieve the purpose for which it was established.
Founders There should be a minimum of five founders but there is no maximum number. Companies set up by the government, public organizations and institutions and companies in which the government owns a percentage not less than 51% (or less subject to cabinet approval), solely or jointly with one or more founders, national or foreign, whether natural or legal person, public or private shall be exempted from the minimum number of founders.
Trade Name Company trade name should indicate its purpose and shall not carry a natural person’s name unless the company’s purpose is to invest a patent registered in the name of such person or owns a commercial registration in the name of a natural person and takes the name for the company. In all cases, the company’s name shall be followed by the phrase “Qatari Public Shareholding Company”.
Article of Association

It should include the following requirements:

  • Company name and its headquarters. 
  • Purpose of establishing the company
  • Founders’ names, nationalities, resident status, professions, and number of subscribed shares by each of them. 
  • Company’s authorized capital (if any). 
  • Company’s issued capital, number and types of shares, nominal values and amount paid for each share. 
  • Duration of the company registration.
  • A statement about each in kind share, the name of its provider, relevant submission terms and consequent in-kind rights.
  • An approximate statement of expenses, wages and costs to be paid by the company for its establishment.
Management Founders shall elect from among them the individual responsible for the management of the company. An elected board of directors shall manage a public shareholding company as stipulated in the articles of association, which shall determine the appointment system, number of members and the duration of the membership. The number of members shall not be less than five and not exceed eleven. The duration of the membership shall not exceed three years, and may be extended to five years only for members of the first board of directors.
Other Terms The founders shall subscribe to shares of not less than 20 per cent and not more than 60 per cent of the company’s capital. A founder is also not permitted to exceed the subscription percentage set by the company’s articles of association. If a public shareholding company’s shares are not listed for trading in the financial market within a year of establishment, the company’s registration will automatically be converted to a private shareholding company. The founders shall jointly be liable for all of charges of converting to a private shareholding company.

Private Shareholding Company

Definition Not less than five founders may establish a private shareholding company. The company shall not be publicly list its shares. The shareholders are responsible for subscribing to all the shares of the company.
Capital & Shares The capital of the company shall not be less than two million Qatari riyals.
Founders Minimum of five founders and there is no maximum number.
Trade Name Company trade name should indicate its purpose and shall not carry a natural person’s name unless the company’s purpose is to invest a patent registered in the name of such person or owns a commercial registration in the name of a natural person and takes the name for the company. In all cases, the company’s name shall be followed by the phrase “Qatari Private Shareholding Company”.
Article of Association

It should include the following requirements:

  • Company name and its headquarters. 
  • Purpose of establishing the company.
  • Founders’ names, nationalities, resident status, professions, and number of subscribed shares by each of them. 
  • Company’s authorized capital (if any). 
  • Company’s issued capital, number and types of shares, nominal values and amount paid for each share. 
  • Duration of the company registration.
  • A statement about each in kind share, the name of its provider, relevant submission terms and consequent in-kind rights.
  • An approximate statement of expenses, wages and costs to be paid by the company for its establishment.
Management Founders shall elect from among them someone who is responsible for the management of the company. An elected board of directors shall manage a private shareholding company as stipulated in the articles of association, which shall determine the appointment system, number of members and the duration of membership. The number of members shall not be less than five and not exceed eleven. Duration of the membership shall not exceed three years and may be extended to five years only for members of the first board of directors.
Other Terms In these type of companies, shares are not offered for public subscription, as founders shall subscribe to all the shares. Each shareholder is liable only for the value of his shares in the company. A private shareholding company may turn into a public one if certain conditions are met (Please refer to Commercial Companies Law).

Holding Company

Definition A holding company is a shareholding or limited liability company that financially and managerially controls one or more companies. The controlled companies, when owned by at least 51 per cent in shares or stakes by the holding company become subsidiaries of the holding company.
Capital & Shares The capital shall not be less than ten million Qatari riyals.
Founders Minimum and maximum limit of shareholding and limited liability companies shall be applied based on preference and agreements signed. Foreign ownership cannot exceed 49 per cent as per the law.
Trade Name The phrase “holding company” shall be added to the trade name in all the papers, notices, correspondences and all the documents issued from the holding company.
Article of Association

Provisions of shareholding/limited liability companies shall apply to the holding companies as follows: 

  • Company name and its headquarters. 
  • Purpose of establishing company 
  • Founders’ names, nationalities, resident status, professions, and the number of shares subscribed by each founder. 
  • Company’s authorized capital (if any). 
  • Company’s issued capital, number and types of shares, nominal values and amount paid for each share. 
  • Duration of the company registration.
  • A statement about each in kind share, the name of its provider, relevant submission terms and consequent in kind rights.
  • An approximate statement of expenses, wages and costs to be paid by the company for its establishment.
Management Founders shall elect from among them someone who is responsible for the management of the company. An elected board of directors shall manage a private shareholding company as stipulated in the articles of association, which shall determine the appointment system, number of members and the duration of membership. The number of members shall not be less than five and not exceed eleven. Duration of the membership shall not exceed three years and may be extended to five years only for members of the first board of directors.
Other Terms

A holding company shall not own shares in joint liability companies or both kinds of partnership companies. It is prohibited from owning any stocks or shares in other holding companies as well.

The responsibilities of a holding company shall be as follows:

  • Participate in the management of its subsidiaries or companies in which it contributes. 
  • Invest its money in shares, bonds and securities. 
  • Provide the necessary support to its subsidiaries.
  • Own intellectual property rights, including patents, trademarks, industrial models, franchises and other moral rights, and utilize and license them for subsidiaries or third parties whether within or outside Qatar.
  • Own property and paraphernalia required for carrying out its business within the limits permitted by law.

Limited Partnership Company

Definition

A Limited partnership company shall include at least one joint liable partner and one silent partner and consists of two categories of partners: 

  • Joint liable partners run the company and are jointly liable for the company’s obligations in their assets. 
  • Silent partners contribute to the capital of the company but shall not be liable for the company’s obligations except for the commitment to pay amounts in cash to the company.
Capital & Shares The capital shall not be less than one million Qatari riyals.
Founders A minimum of two partners and there is no maximum number. All joint partners shall be natural persons.
Trade Name It shall only include joint partners’ names, in addition to proof of other partners’ existence. It may have a special trade name provided it shows that it is a limited partnership. The name of the silent partner shall not be included in the company name. If mentioned (with their knowledge), he shall be jointly responsible for the liabilities of the company towards third parties acting in good faith.
Article of Association

Limited partnership companies shall be governed by the same rules prescribed for joint liability companies as the article of Association shall include the following:

  • Company name, purpose, headquarters and branches (if any).
  • Name, profession, title, nationality, date of birth and country of origin of each partner.
  • Company’s capital and the shares that each partner has committed to provide, whether in cash, in kind or as rights for third parties, the value of such shares, provision methods and due dates.
  • The date and duration of company’s incorporation.
  • The method by which the company is to be managed and the names and powers of company’s authorized signatories.
  • The start and end dates of the company’s fiscal year.
  • The method for distributing profits and losses.
  • Names of the joint and silent partners.
Management
  • The silent partner shall not interfere in the management of the company even under a power of attorney; otherwise, he will be jointly liable for the obligations resulting from his management. He may partially or fully decide to undertake some liabilities depending on the significance of the business.  However, monitoring the behavior of the company’s managers,’ providing opinion and giving permissions to managers to act beyond their authorities shall not be considered as interference. 
  • The silent partner shall ask to see a copy of the balance sheet, losses and profits statement for verification purposes. He is entitled to review company records and documents personally or through his attorneys provided it does not cause any harm to the company.
  • Company’s decisions are made by a consensus of the joint partners, unless the articles of association stipulates otherwise. 
  • Decisions related to the amendment of company’s articles of association will not be valid unless approved unanimously by all joint and silent partners. 
Other Terms Limited partnership companies shall be governed by the same rules prescribed for joint liability companies.

Limited Liability Company

Definition The limited liability company comprises one or more persons but shall not exceed fifty persons. A partner will only be liable up to his share in the capital. Partners’ shares shall not be tradable securities.
Capital & Shares At least one Qatari riyal
Founders At least one owner in case one person or a minimum of two and a maximum of 50 partners own it.
Trade Name A limited liability company shall have a name derived from its purpose or from the name of one or more of its partners. Such a name may include in both cases a creative name, provided it is not misleading in its objectives or identity.  The phrase “limited liability company” shall be added to the name of the company. If the managers fail to abide by the said clause, they shall be jointly responsible and liable in their own assets for the company’s obligations and compensations.
Article of Association

The limited liability company shall be established under an incorporation document signed by the partner or partners. It shall include information contained in a ministerial decree as well as the following:

  • Company name, type, purpose and head office. 
  • Partners’ names, nationalities, resident status, and addresses.
  • Amount of capital, share of each partner, in-kind shares, their value and names of providers, if any.
  • Names and nationalities of company’s managers, whether they are partners or their names are mentioned in the incorporation document of the company.
  • Names of the members of the supervisory board, if any.
  • Duration of the company registration.
  • Distribution method of profits and losses. 
  • Conditions of assignment of shares 
  • Structure to be followed when sending notifications to the partners.

The incorporation document may include provisions that regulate partners’ shares refunding right, method of estimating their values when applicable, form an optional reserve, organize company’s financial matters and accounts and reasons for its dissolution.

Management Company’s manager shall have the full authority to manage the company unless the incorporation document stipulates the limits of his authorities. The manager’s actions shall be binding on the company provided they are in accordance with the given authority. Any decision to change other managers or confining their authorities shall not be valid until reflected in the commercial registration.
Other Terms The company shall not turn to public subscription to form or increase its capital, or obtain loans. It shall not issue tradable shares or bonds.

Joint Liability Company

Definition It shall consist of at least two joint partners provided they are natural persons.  Accounting firms are an exception as they may be non-natural persons, and shall be jointly liable in their personal funds.
Capital & Shares No capital is required as the partners are jointly liable for their own funds for company’s obligations.
Founders A minimum of two partners and no maximum set number.
Trade Name It shall consist of all partners’ names. However, it may be limited to the name of one partner but the word “and partners” must be included. The name of the company shall reflect its purpose, if it contains a name of a non-partner person (with their knowledge), he shall be jointly liable for company’s debts and profits. The company may keep the name of a partner who has withdrawn or is deceased provided the partners that have withdrawn or the heirs of the deceased partner accept. The company may have a special trade name, provided it is associated with proof that it is a joint liability company.
Article of Association

Joint liability companies’ Article of Association shall include the following:

  • Company name, purpose, headquarters and branches (if any).
  • Name, profession, title, nationality, date of birth and country of origin of each partner.
  • Company’s capital and the shares that each partner has committed to provide, whether in cash, in kind or as rights for third parties, the value of such shares, provision methods and due dates.
  • The date and duration of company’s incorporation.
  • The method by which the company is to be managed and the names and powers of company’s authorized signatories.
  • The start and end dates of the company’s fiscal year.
  • The method for distributing profits and losses.
Management All partners shall manage the company, unless the management duties are assigned to one or more partners or to one or more non-partners as stipulated in the articles of association or a separate contract.
Other Terms Partners’ shares in a joint liability company shall not be tradable securities. A partner in a joint liability company shall have the capacity of a trader, and shall be deemed to have engaged in commercial activities under company’s name. A company going bankrupt shall result in the bankruptcy of all partners.

Commercial Representation Office

Definition These offices are established within Qatar to run businesses for companies and establishments whose headquarters are based abroad.
Capital & Shares Not Applicable
Founders Not Applicable
Trade Name Not Applicable
Article of Association Not Applicable
Management There must be an office manager.
Other Terms

Commercial representation offices shall be responsible for the following: 

  • Contact customers to introduce the foreign companies and entities’ products and expand the distribution and marketing of the products. 
  • Contact exporters and sellers of raw and semi-manufactured material needed by the entity to facilitate and speed its delivery to the entity. 
  • Report complaints received about the products to the entity and seek to sort hurdles related to the distribution of such products.
  • Commercial representation offices are prohibited from: 
  • Conducting business in Qatar, importing or exporting products except for commercial samples of products produced by the entity it represents for promotion purposes. 
  • Promoting products other than those produced by the entity it represents.
  • Contacting customers directly. 
  • Setting up new branches. 
  • Foreign companies and entities working in the field of trade, industry and services are allowed to open a commercial representation office in the country.

Professional Office/ Professional Firm

Definition Issuing a professional license without a commercial registration: law firm, individual clinic, accounting office, or engineering office.
Capital & Shares Not Applicable
Founders Not Applicable
Trade Name For law firms (preferably the last word to be law or legal consultants).
Article of Association There is no Article of Association required.
Management Regulator’s provisions for professional office specialization shall apply.
Other Terms Branches cannot be established.

Sole Proprietorship

Definition Registering Sole Proprietorship for a natural person who is 18 years old or older.
Capital & Shares  
Founders Not Applicable
Trade Name There are no conditions
Article of Association There is no Article of Association required
Management  
Other Terms A Sole Proprietorship can be converted into a limited liability company. A single person may not own more than one sole proprietorship, but can open more than one business with same commercial registration according to Article 2 of the commercial registration executive regulation.

‎Branch of A Foreign Company (that involved in government contracts)

Definition The branch of a foreign company contracting with the government shall comply with the foreign companies’ law that awarded business contracts in Qatar, and licensed by a ministerial decree issued under Law No. 13 of 2000 regulating non-Qatari capital in economic activities. Contracts with the government can be direct or indirect.
Capital & Shares Not Applicable
Founders There are no conditions
Trade Name There are no conditions
Article of Association No need to submit MoA but the project contract signed by the State or with the direct contractor must be attached.
Management At least the name of one manager must be entered.
Other Terms
  • Copies of signed contracts and company’s headquarters must be attached. 
  • No branches can be established but other contracts may be added to the same commercial registration. A commercial license shall be issued with each contract. 
  • The duration of a commercial registration is determined based on the signed contract between the government agency and the foreign company. 
  • Foreign companies branches only execute the activities permitted in the contract with the government agency and are not allowed to execute any other activity.