DOHA: Board members of listed entities may see their lucrative perks trimmed once a new commercial companies’ law sees the light of day.
The present law is being amended and an article that entitles the board member of a listed company to monetary compensation at the end of his tenure is being removed.
The new law which is in the pipeline seeks to make all listed companies more accountable to their shareholders. So, once the law is in force, annual general meetings of shareholders, referred to as general assembly in Qatar, will become more significant.
A draft law that carries amendments to the commercial companies’ law (No 5 of 2002) was approved by the Advisory Council yesterday.
The draft has 340 articles divided into 13 chapters and seeks to allow for six types of companies, including the most popular one — limited liability company (LLC).
A global consultancy was hired to prepare the draft law and feedback was also taken from various state agencies, experts as well as the business community.
The government told a panel of the Advisory Council that the reason for having a new companies’ law was that the World Bank placed Qatar at 81st position among 190 countries in the world in terms of this law.
“We want Qatar to rank among the top 10,” a senior state official told the Council’s economic and financial affairs panel.
A highlight of the draft is that it talks of a single-window licensing system for companies (investors!), covers Islamic sukuks and talks of facilitating family-owned businesses to seek listing. The present law lacks these provisions.
Once the new law is in force, the Ministry of Economy and Commerce would install an online system whereby companies would be able to get their contracts (with their clientele) endorsed by it together with the justice ministry.
Banks and financial institutions, although licensed and regulated by Qatar Central Bank, will also need licence from the economy ministry. Industrial units of all kinds licensed by the energy ministry will also need approval from the economy ministry to set up shop and operate.
The draft talks of two types of company owners: founder-owners and subscriber-owners. There would need to be a minimum of five founder-members of a company while subscribers can be in the thousands.
Founders can sell their shares, even partly, only after two years.
The draft bans insider trading and defines it extensively and makes it illegal for company officials with privileged knowledge of company’s secrets not to misuse information for personal gain.
The Peninsula
