The establishment of a limited liability company in accordance with the Kuwaiti Companies Law is between a number of partners not exceeding fifty partners, and the most important thing that distinguishes it is that the financial liability of the company is independent of the financial liability of each partner in it, and the company is responsible for the debts and obligations arising from it, and the partner is not responsible for These debts, obligations and losses are only to the extent of his share in the capital of the company.
The company takes a special name that derives from its purpose or from the name of one or more partners in it, and the name of the company follows the phrase (with limited liability) or the term (LLC).
Data to be provided in the memorandum of association of a limited liability company
The company contract must include the following data:
- Company name and address
- Partners’ names, titles and nationalities
- The company’s main center
- Duration of the company, if any
- The purposes for which the company was established
- The amount of the company’s capital, and the cash or in-kind shares provided by each partner in it
- The names of the partners or others who are entrusted with the management of the company, or a statement of the method of their appointment, and the names of the members of the supervisory board in cases where the law requires the existence of this board
- How to distribute profits and bear losses
The limited liability company’s contract must also include the appointment of one or more auditors for the company’s accounts, and the rules and provisions stipulated in the matter of auditors in the joint-stock company shall apply to him with regard to his appointment, powers, remuneration, dismissal and resignation.
The capital of the limited liability company
The Kuwaiti Companies Law required that the capital of the limited liability company be sufficient to achieve the company’s purposes and that it be in Kuwaiti cash. The regulation also clarified the minimum capital when establishing a limited liability company to be no less than 1000 Kuwaiti dinars.
The capital is divided into shares of equal and indivisible value, and the value of each of them is not less than one hundred Kuwaiti dinars, and in the case of multiple owners of one share, they must choose one person from among them to represent them towards the company.
Shares in cash and in kind in the company
The legislator stipulated in the Kuwaiti Companies Law that in order to establish a limited liability company, all cash shares must be distributed among the partners and paid in full, and the in-kind shares must be delivered to the company, and the cash shares must be deposited in a local bank, and paid only to the appointed managers when they present a certificate proving Register it in the commercial register.
It is not permissible to establish a company or increase its capital by way of public subscription
It is not permissible to establish a limited liability company or increase its capital through public subscription, and it is considered public subscription to address the public directly or indirectly with an invitation to participate in the company.
Also, the shares of the partners in the limited liability company may not be in the form of tradable shares, and the company may not borrow by issuing any tradable securities.
Activities that a Limited Liability Company is prohibited from doing
In the Kuwaiti Companies Law, the legislator prohibited the limited liability company from practicing the following business:
- Banking business
- Insurance business
- Investing money for others
Managing the Limited Liability Company
The management of the company shall be assumed by one or more managers from among the partners or from others who shall be appointed in the company’s contract, and if the company’s contract does not specify the managers, they shall be appointed by the ordinary general assembly of the partners.
The manager in the limited liability company shall have full authority to carry out all the actions and actions necessary to achieve the company’s objectives, in the event that his powers are not specified in the company’s contract or in the decision issued by the general assembly of partners appointing him, and the managers shall be jointly liable towards the company, partners and third parties for their violation of the provisions of the law or company contract or error in management.