The Kuwaiti Companies Law requires that the capital of the joint liability company be sufficient to achieve its purposes, and the capital is divided into shares of equal value indivisible. The executive regulations of the law indicated that the minimum capital of the joint liability company is one thousand Kuwaiti dinars.
The joint liability company’s contract must also include the amount of the company’s capital, the share of each partner in it, and a statement of the in-kind contributions offered, their nature and the value they were valued at, and the percentage of Kuwaitis’ ownership in the company must not be less than 51% of the capital.
The following are the rules governing the partners’ shares in a joint liability company:
Partner share form
The Kuwaiti Companies Law made it clear that the partners’ shares in a joint liability company may not be in the form of negotiable securities.
Assignment of the partners’ shares in the joint liability company
A partner in a joint liability company may assign his share in the company to the rest of the partners, and he may not assign his share to anyone other than the partners in the company unless the company contract stipulates otherwise, and this waiver does not apply to third parties unless all registration procedures are fulfilled.
The law permits a partner in a joint liability company to waive the financial rights related to his share in the company, and the provisions for transfer of rights apply to the waiver.
A partner pledged his share in the joint liability company
A partner in a joint liability company has the right to mortgage his share in the company, and the mortgage shall be concluded in writing, and the mortgage shall not be effective against the company and third parties except from the date of entering the mortgage in the commercial registry.
Attachment of the share of the debtor partner in the joint liability company
The creditors of a partner with a personal debt may not seize the company’s funds, but he may seize the share of his debtor. If the creditor of one of the partners initiates execution procedures on the share of his debtor, he may agree with the debtor and the company on the method and conditions of the sale, and in this case the provisions for assignment of shares to the remaining partners shall be applied.
Displaying the share of the debtor partner in the public bid
If the method of sale is not agreed upon within fifteen days from the date of seizure, the share must be offered for sale in a public auction in accordance with the procedures established in the Civil and Commercial Procedures Law, and the base price is determined after the share is evaluated by one of the auditing offices approved by the Capital Markets Authority.
Objection to the person who submitted the best bid for the company
With the exception of the partner whose shares were seized, the sales judge gives the partners three days to express their objection to the person who submitted the best bid joining the company. This amendment shall not apply to third parties unless all registration procedures are completed.
The partners’ fulfillment of the partner’s indebtedness to the confiscating creditor
The company or any of the partners, even before a judgment of awarding the auction is issued, may fulfill the partner’s indebtedness to the confiscating creditor, and the company may, during the mentioned period, redeem – in favor of the partners or some of them – some of the shares seized within the limits sufficient to satisfy the creditor’s debt. in the event that any of the partners objects to the winning bidder joining the company, and the company or partners have not fulfilled the creditor’s debtor withholding or redeemed the shares, the sales judge shall issue a ruling dissolving and liquidating the company and appointing a liquidator. The judgment issued in this regard is subject to appeal in accordance with the law.
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