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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:
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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:
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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:
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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:
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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:
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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:
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Management |
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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:
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:
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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:
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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 |
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