UJ, Doha
ANSWER: According to relevant provisions of the Commercial Companies Law, the limited liability company shall be managed by one manager or more which shall be selected from the partners or otherwise.
Managers shall be appointed in the Articles of Association of the company or in a separate contract for specific period or without limitation. There is no such restriction to appoint a non-partner as the manager and to appoint more than one manager as per the law.
Any resolution made to appoint or replace the manager shall not be effective against others unless it is registered in the commercial register.
Complaints about products
Q: We have been supplying products to an MEP company in Qatar and until recently, it hasn’t raised any complaints on them. The MEP company has now merged with another firm and the manager in charge has also been changed. The new manager has made many queries on the supplied materials and related things. Now he has issued a notice that the materials supplied by us have to be replaced as they don’t meet the requirements. We had been supplying these products for many years and the old manager had approved previously supplied items. If the contract does not provide any specification, what is the law?
VN, Doha
A: According to Article 684 of the Civil law, if the contractor provides all or any of the materials, such materials shall be with the agreed specifications or shall be adequate for meeting the intended purpose. When the contract is silent on specifications, the contractor must use standard materials set by current practice.
End-of-service entitlements
Q: Our company shares have been sold to another partner because of financial issues and the new owner has terminated many employees without paying any benefits, asking them to approach their former employee for them. Shall we approach the Labour Department for due entitlements? Whether the new partner is liable to pay the benefits or not? Some of the employees were terminated under Article 61 of the Labour Law to get exemption from paying the end-of-service benefits. Do we have any chance to initiate legal action on such termination?
EW, Doha
A: According to Article 52, the employment contract shall not terminate on transfer of ownership of the company/employer. The new owner shall be jointly liable with the former employer for payment of the employee’s entitlements. The aggrieved employees can approach the labour department for their benefits.
An employer may take an action against his employee based on Article 61. But in all cases, the employee shall be entitled to have resort to the Labour Department and the court if he feels the action was unfair.
Lease contractextension
Q: My lease contract ended on July 31 this year and we continue to stay on the premises. We had informed the landlord on our willingness to renew the contract and he did not make any objection at that time. He has now issued a notice stating that our contract is no longer valid, asking us to vacate the premises within a week. Is our contract legal or not? Do I have the legal right to stay on the premises?
OS, Doha
A: The lease is valid. According to Article 626 of the civil laws, even after the expiry of the lease, the lessee continues to enjoy the leased property to the knowledge of and without objection on the part of the landlord, the lease is deemed to be renewed upon the same conditions but for an indefinite duration. The landlord is not allowed to evict the lessee from the premises before the contract expires as long as the lessee is paying the rent without due.
Power of attorney
Q: I have issued a power of attorney without any power for the attorney to appoint a third party. In any event, can this attorney appoint another?
AS, Doha
A: Article 89 of the Civil Laws stipulates that an attorney may not appoint a third party to act on his behalf unless the law or agreement permit such appointment.
*Please send your questions by e-mail to: [email protected]
LEGAL SYSTEM IN QATAR
According to Article 152, the capital of the company shall be divided into equal shares where the nominal value of each is one riyal and shall not exceed hundred riyals. The issuance expenses shall not exceed (1%) of the share nominal value. Article 154 stipulates that the share of the public shareholding Company shall be indivisible and if the share is owned by several persons, they shall elect one of them to represent them in enjoying the rights pertaining to the share. Joint owners shall be jointly and severally responsible for the liabilities arising from the ownership of the share.
Shares may not be issued for less than their nominal value; however, it can be issued at premium if the Articles of Association allows for this or if the issue is approved by Extraordinary General Assembly. If shares are issued at a premium, the difference in value shall be added to the legal reserve.
According to Article 155, the value of shares shall be paid in cash, by full amount as one payment or in installments. The installment falling due upon initial subscription shall not be less than (25%) of the share value. In all cases, the entire value must be paid within five years from the date of publishing the Resolution of incorporation in the official gazette.
The company shall issue on subscription, temporary certificates with the name of the shareholder, the number of shares subscribed, the amounts paid, and the remaining unpaid installments. The temporary certificate shall be in lieu of ordinary shares until they are replaced by shares upon payment of full installments.
As per Article 157, if the shareholder fails to pay the installment on the maturity date, the Board of Directors shall issue a reminder notice to the shareholder by a registered letter or any means that is deemed acceptable by the Ministry to pay the installment due.
If he fails to make the payment within thirty days, the company may sell the share in the public auction or in the stock exchange. The company shall from the proceeds of the sale collect the overdue installments and expenses, and disburse the balance amount to the shareholder.
If the sale proceeds fail to satisfy the company entitlements, the company shall have the right of recourse to the shareholder against his personal assets. The company shall cancel the share under execution, and deliver to the purchaser a new share under the same number of the deleted share and enter the sale and the name of the new owner in the share register.
The company shall keep a special register called the shareholders register which shall include the names, nationalities, and addresses of shareholders and the shares owned by each shareholder and the amount paid up on the shares. The Ministry shall have the right to examine this information and obtain a copy of them.
According to Article 160, where a public shareholding company desires to be listed on the stock market, the procedures and rules stipulated in the laws, regulations, and instructions organising the transactions of the stock exchange in the state shall be observed. The shares can be mortgaged by handing over certificate of share ownership to the mortgagee creditor. The mortgagee creditor has the right to receive the dividend and enjoy the rights attached to the shares unless otherwise agreed in the Mortgage contract.