and Governance of Companies
Types of Companies
2 . Establishing a Public Shareholding Company
3 . Requirements for a Public Shareholding Company
4 . Transformation, Merger and Division of Companies
Types Of Companies
The regulations relating to the structure and governance of companies
are governed by the Commercial Companies Law, Law No. (5) of 2002,
replacing Law No. (9) of 1998. Certain provisions of the Commercial
Companies Law were changed as per Law No. (16) of 2006. One of
the main changes of the new law is the removal of the provision
where only nationals of the State were allowed to form certain
types of partnership companies. Another significant change is
the addition of two new types of companies. The New Commercial
Companies Law provides for the incorporation of eight different
kinds of companies in Qatar :
Simple Partnership Company
A Simple Partnership Company is a company formed by two or more
natural persons who are personally and jointly responsible for
the liabilities of the company.
• The name of the company shall be formed by reference to
the name of all the partners, or the name of one partner followed
by the words “And Partners”. A company may have a
special commercial name, provided it is connected with the fact
that it is a simple partnership company.
• A ll the partners in a simple partnership company shall
be natural persons.
• A simple partnership company should have a Memorandum
Joint Partnership Company
A Joint Partnership Company is a company consisting of two types
I. Joint partners who are empowered to administer the affairs
of the company, and are jointly and personally responsible for
the company’s liabilities.
II. Trustee partners, who merely contribute to the company’s
capital without being responsible for its liabilities except to
the value of their shares in the capital.
• All the Joint partners in a joint partnership company
shall be natural persons.
• A Trustee partner shall not interfere in the management
of the company.
Joint Venture Company
A Joint Venture Company is a company formed by two or more persons.
It is an un-incorporated entity, without validity against third
parties and has no legal personality and is not subject to any
registration procedures in the commercial register. A Memorandum
of a joint venture may be proved by all evidential means including
substantive and circumstantial evidence.
• The resolutions of a Joint Venture Company are decided
by the unanimous vote of all the partners, unless stated otherwise
by the Memorandum.
• If non-Qatari’s are partners of a Joint Venture
Company, then the company is allowed to carry out only those business
activities stipulated by law for non-Qatari’s.
Public Shareholding Company
A Public Share holding Company is a company whose capital is divided
into shares of equal value, which are transferable. Shareholders
of a Public Share holding Company are not liable for the company’s
obligations except for the amount of the nominal value of the
shares for which they subscribe.
• A Public Share holding Company should have a minimum of
five shareholders and in all cases the name of the company should
be followed by the words “Qatari Public Share holding Company”.
• Subscription to the shares of the company shall remain
open for not lesser than two weeks and not more than four weeks.
Founders may extend the subscription period by another two weeks
if shares are not fully subscribed, after obtaining the consent
of the Ministry.
• A Public Shareholding Company shall have a definite term,
which should be indicated in the Memorandum of Association and
in the Articles of Association, in accordance with a format issued
by a Ministerial Decree. The fixed term of a Public Shareholding
Company may be extended by an extra ordinary resolution of the
• The capital of a Public Shareholding Company should not
be less than QR 10,000,000/- (Ten Million Qatari Riyals). The
nominal value of each share may be less than QR 10, subject to
the Ministry’s approval.
• A Company may purchase its shares for the purpose of selling
them in accordance with the rules determined by the Qatar Financial
E. Limited Shares Partnership Company
A Limited Shares Partnership Company is a company formed by two
I. Joint Partners comprising of one or more joint partners who
are personally liable for the debts of the company.
II.Trustee Partners comprising of no less than four shareholding
partners whose liability is limited to the value of shares held
in the capital.
• The company should have a Memorandum and Articles of Association
signed by all founding partners. In all cases the words “Limited
Shares Partnership Company” should be added to the name
of the company.
• For the joint partners, the company shall be governed
in the same manner as a Simple Partnership Company and all the
joint partners shall be natural persons.
• The company should have a minimum capital of QR 1,000,000/-
(One Million Qatari Riyals), divided into shares of equal value
that are transferable and indivisible and should be fully paid
• The company must have a General Assembly composed of all
joint and trustee shareholding partners.
• A Limited Shares Partnership Company is managed by one
or more joint partners.
Limited Liability Company
A Limited Liability Company is a company formed with at least
two partners and not more than fifty partners, whose liabilities
are limited to the value of shares held in the company. The shares
of a Limited Liability Company are not freely transferable.
• The company should have a Memorandum and Articles of Association
signed by all the partners. In all cases the words “Limited
Liability Company” should be added to the name of the company.
• The company must have a minimum capital of QR 200,000/-
(Two Hundred Thousand Qatari Riyals), divided into shares of equal
value not less than QR 10/- (Ten Riyals) each.
• The management of a Limited Liability Company is conducted
by one or more managers whether being partners in the company
• A Limited Liability Company may not engage in the business
of insurance, banking, or in the nvestment of funds, whether as
a principal or an agent.
One Person Company
A One Person Company refers to a company in which every economic
activity and its full share capital is held by one natural or
• The company should have an Article of Association stating
its rules, data, and procedures of its entry and registration.
Such a company shall not have a corporate personality before its
registration. The name of the company shall be linked with the
name of the holder of is share capital followed by the words “One
Person Company (O.P.C)”.
• The company must have a minimum capital of QR 200,000/-
(Two Hundred Thousand Qatari Riyals), paid in full. Such share
capital may include shares in kind, whose value is estimated by
professional experts .
• The company shall be managed by the holder of its share
capital, who may appoint one or more managers to represent the
company in its transactions. The company’s owner shall be
responsible from his own assets for company obligations, unless
he seperates his personal interests from that of the company.
The company shall be dissolved upon the death of the holder of
its share capital, unless the shares of the heirs is held by one
person, or the heirs select to continue the company in another
A Holding Company is a joint stock, limited liability or one person
company financially and administratively controlling one or more
other companies by holding at least 51% of the shares of such
company(ies) whether they are shareholding, limited liability
or one person companies.
• The Capital of a Holding Company shall not be less than
QR 10,000,000/- (Ten Million Qatari Riyals).
• The words “Holding Company” should be added
to the name of the company.
• To the extent not contradicting to the provisions, holding
companies shall be subject to the provisions hereof relating to
shareholding, limited liability or one person companies, as the
case may be.
2. Establishing a Public Shareholding Company
The establishment of a Public Shareholding Company involves the
issuance of a resolution by the Minister of Economy and Commerce.
A Public Shareholding Company should have a Memorandum and Articles
of Association which contain the following information:
• the company name and principal place of business;
• the objective for which the company has been established;
• the names of the founders, their nationalities, place
of residence, occupations, and the number of shares subscribed
by each of them;
• the amount of company capital, the number of shares into
which the capital is divided, their type and value;
• the duration of the company;
• a statement of every non-monetary share, the name of the
person contributing this share, all the conditions relating to
its subscription, and the specific rights in kind attached to
• a statement of the estimated amount of formation expenses,
remuneration and costs paid or undertaken to be paid by the company
during its incorporation; The founding members from among them
shall elect a committee of not less than three and not more than
five who shall take over the incorporation procedures before the
founding members are required to subscribe to not lesser than
20% of the shares and not more than 60% of the shares in the company.
No founding member shall subscribe to more shares than the percetage
allowed in the company’s articles of association.
Requirements for a Public Shareholding Company
Board of Directors
A Public Shareholding Company should be managed by an elected
Board of Directors. The Articles of Association shall define the
company’s formation, the number of its members and the term
of office of its members, provided the number of its members is
not be less than five and does not exceed eleven. The tenure of
board members are set for a period of three years and they can
be re-elected more than once unless stated otherwise in the Articles
of Association. The Board of Directors have to prepare for every
fiscal year the company’s audited financial statements,
along with a report on the company’s activities during the
past year and the future plans for the coming year.
The meeting of the General Assembly (shareholders) is to be convened
upon the invitation by the Board of Directors at least once a
year. The meeting should take place within four months following
the end of the company’s financial year. Invitations containing
a clear summary of the agenda for the General Assembly should
be sent to all shareholders by registered post. The Board of Directors
shall call for a General Assembly meeting upon request by the
company’s auditor or to discuss important matters upon the
request of one or more shareholders holding not less than 10%
of the capital. The Chairman of the Board of Directors should
at least fifteen days before the general assembly meeting publish
the company’s audited financial statements and report in
two local daily Arabic newspapers.
• A n extraordinary General Assembly meeting is convened
in discussing important matters such as; modifying the Memorandum
or Articles of Association; increasing or decreasing the capital
of the company; extending the duration of the company; dissolution,
liquidation, assignment or merger with another company; or selling
the entire undertaking for which the company was established.
A Public Shareholding Company must have one or more auditors,
who must be appointed by the General Assembly who also fix their
remuneration. The auditors can be re-appointed annually but their
term of office cannot exceed five consecutive years.
Closed Public Shareholding Company
A Closed Public Shareholding Company is a company in which there
are at least five persons who hold the entire shares of the company,
which cannot be offered for public subscription. The company should
have a capital of not less than QR 2,000,000 (Two Million Qatari
Riyals). A Closed Public Shareholding Company is governed by all
the laws pertaining to Public Shareholding Companies, with the
exception of public subscription and share transfers. A Closed
Public Shareholding Company may be transformed into a Public Shareholding
Transformation, Merger and Division of Companies
A company may be transformed into another type of company by a
resolution of the General Assembly, subject to compliance with
the requirements relating to the amendment of the company’s
Memorandum and Articles of Association and the necessary steps
for incorporation and commercial registration applicable to the
category of the transformed company is taken. If the transformation
is into a Public Shareholding Company, a period of three years
must have expired from the date the company has been entered into
the Commercial Register, and that the company has by carrying
out the objects for which it was incorporated realised distributable
net profits of not less than ten percent of the company capital
during the two years preceding the transformation application.
merger can take place by absorbing one or more companies into
another existing company, or by combining two or more companies
with a new company under incorporation. A company may merge with
another company even while undergoing liquidation. No merger shall
be valid unless a resolution has been issued by every company
that is party to such a merger, in accordance with the requirements
set for the amendment of a company’s Memorandum and Articles
A company may be divided into one or more companies upon the approval
through a resolution issued by the General Assembly, consisting
of shareholders holding at least three quarters of the company’s
capital. Every company resulting from such a division shall assume
a seperate legal entity, with all the consequences arising therefrom.
The resolution to divide the company shall determine the number
of shareholders or partners, their names, the entitlement of each
in the companies resulting from the division, the rights and liabilities
of such companies, and the method of distributing assets and liabilities