Establishing professional companies in Kuwait

The establishment of professional companies in Kuwait is between two or more people who have one free profession to whom the conditions and controls of its practice are met. It aims to practice the profession’s work through collective cooperation among them, and it also operates under a title that derives from its purposes and the names of the partners or one of them.

Legal form of the professional company

The professional company takes the form of a closed joint stock company, a limited liability company, a general partnership or a simple partnership, without the partner acquiring the status of a merchant.

It is also subject to the rules established for the company’s form that it adopts without conflicting with the special provisions of the professional company, as well as the controls for protecting those dealing with it, and the provisions related to insurance against the risks of this profession.

Professions that may establish professional companies

The Kuwaiti Companies Law permits the establishment of professional companies among the following liberal professions:

  1. Lawyer
  2. Accounting
  3. Medicine
  4. Engineering
  5. Consultations carried out by employers of professions that are legally regulated and licensed to be practiced by the regulatory authorities

Issuance of a license to establish professional companies in Kuwait

The license to establish professional companies is issued by the Kuwaiti Ministry of Commerce and Industry in coordination with the legally competent authorities to which the professional company is subject to supervising the organization of the profession’s affairs practiced by the company, in accordance with the conditions and rules set by the Ministry.

Publication of the company’s contract

The company’s contract is made public by noting it in a special register prepared by the competent authority that agreed to the Ministry of Industry and Trade to issue the license, in addition to registering the company in the commercial register.

The register of the competent authority must include the following data:

  1. Company name and address
  2. Partners’ names, nationalities and domiciles
  3. The number and type of shares or shares owned by each partner and the value paid for each share or share
  4. Names of the directors or the board of directors and their powers
  5. Any changes to the data recorded in the registry

The company does not acquire legal personality, and it may not practice its business except after being registered in the register of the competent authority. The competent authority shall legally issue certificates for the data indicated in the register.

The company is also not granted a license to practice the activity by the competent authority to supervise it except after submitting an insurance policy concluded with an insurance company against professional errors that occur from partners or employees, and the competent authority determines the value of this document.

Data that must be provided in the articles of incorporation of professional companies

The professional company contract must include the following data:

  1. Professional name and address of the company
  2. The company’s main center
  3. The purpose of establishing the company
  4. Duration of the company, if any
  5. The partners’ names, titles, nationalities, educational qualifications and place of residence for each of them
  6. The way the company is managed, those responsible for management and their powers
  7. The amount of the capital and the share of each partner, a statement of each non-cash share, its nature and value, the name of its provider, the conditions for its submission, and the encumbrance and lien rights arising therefrom, if any.
  8. Provisions for the distribution of returns between partners
  9. Company’s financial year
  10. The provisions relating to the liquidation of the company and the division of its funds

Responsibility of the partners in the professional company

A partner in a professional company may not be a partner in another professional company, and he may not practice the profession for his own account or through another person.

Each partner is personally responsible for his professional error towards the company, and the company is also asked for compensation to others for the damages he sustained as a result of the partner’s mistake.

The company may not provide its services to its clients except through its partners and employees, and it is not entitled to conduct its activity through the employees of another professional company practicing the same activity, unless it is agreed otherwise.

Sale, pledge or assignment of shares or shares by a partner in the professional company

A partner in a professional company has the right to sell, assign or mortgage his shares or shares, provided that this is done to persons of the same profession, even if this sale is forcible.

A partner who has lost the authority to practice the profession must relinquish his shares in the company within a period of six months, otherwise the company will recover these shares or shares according to their market value, and this applies to the case of the deceased partner unless one of his heirs is authorized To practice the profession and the heirs agreed to replace their legator.

Also, the sale, mortgage, assignment or withdrawal from the company against third parties shall not be valid unless it is entered in the register prepared for this by the competent authority.

Dissolution and liquidation of professional companies

The company shall be dissolved in the event that all the partners in the company lose the conditions for practicing the profession and shall be liquidated in accordance with the law. The company may not be dissolved and liquidated before the expiry of its term except after notifying its clients of a period of no less than three months before the commencement of the dissolution and liquidation procedures. The decision of dissolution or liquidation shall not be noted in the register prepared for this at the authority concerned with supervising the profession until after this notification.

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