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DOHA: The Ministry of Business and Trade has posted a draft commercial companies’ law on its website for public comment which talks of setting up a single-window licensing system for setting up a business in the country.
The idea is to simplify the licensing process and help attract added inflow of foreign investment, says the ministry.
The draft suggests allowing a public shareholding company to have at least a third of the members of its board of directors from outside—those who do not hold any shares of the company.
It also recommends that the board members of a public shareholding company put together should not be permitted to get financial awards such as annual bonus or remunerations exceeding 10 percent of its net profits.
However, if a company suffers losses the board could be entitled to some remuneration provided a proposal to the effect is approved by its shareholders at their annual general meeting. The ministry can earmark an amount for that purpose. The face or nominal value of the shares of a public shareholding company is QR10 under the present commercial companies’ law that was enforced 11 years ago. The draft law suggests that listed entitles should be allowed to fix the face value of their shares from anywhere between QR1 and QR100 so as to help broaden their subscriber base.
The draft law talks of seven types of companies instead of six which are provided for in the present law (Law Number 5 of 2002) — general partnership companies, limited partnership companies, joint venture companies, private shareholding firms, public shareholding companies, limited shareholding companies and limited liability companies.
It also suggests an eighth type of company, apparently an LLC (limited liability company), that can have a single owner who would have the right to assign one or several directors to represent him.
The draft says that all companies being licensed and registered in Qatar must have their headquarters here. There are hazy hints in the draft law that companies with foreign partners are not to be treated on a par with those that are wholly-owned by citizens.
There is no mention in the draft of details of how a foreigner can become a partner in a particular company—LLC, joint venture, public shareholding or any other firm—and how much ownership he could be entitled to.
The draft is in Arabic and posted on the website of the trade ministry for comments from the public. This means that non-Arabic speaking expatriates would not be able to express their opinion on its content.
The draft has 340 articles divided into 13 chapters and according to the ministry, has been framed by a committee of experts from various ministries and government agencies.
The minimum share capital of a public shareholding company has been suggested to be QR10m and if the company is unable to offer its shares for public subscription within 60 days of its inception, it would have to change its articles of association and become an LLC after paying the necessary fee and fines.
A public shareholding company, says the draft law, should be able to float initial public offerings or rights issues without help from a bank or banks. It can, though, seek a bank’s help if it so wishes.
The Peninsula
