MEC officials outline the benefits of the new law before limited liability companies. The MEC said a limited liability company is a business structure that involves 1 to 50 partners; where the liability of its shareholders is directly in proportion to their shareholding influence according to the issued capital of the company.
By Santhosh V Perumal
Business Reporter
Qatar has done away with minimum capital requirements for limited liability companies in a far reaching move to encourage small and medium enterprises (SMEs) sector, which is an important cornerstone for the national economy.
The new Commercial Companies Law No 11 of 2015 has eliminated minimum capital requirements for the establishment of limited liability companies, hence partners are free to determine their own capital, thus encouraging SMEs, the Ministry of Economy and Commerce (MEC) said.
In its sixth session held to familiarise representatives from limited liability companies in Qatar with the new law, the MEC said a limited liability company is a business structure that involves 1 to 50 partners; where the liability of its shareholders is directly in proportion to their shareholding influence according to the issued capital of the company.
Highlighting the provisions of the new law with regard to sole proprietorship companies; the ministry said the new law makes no distinction between the limited liability companies and the sole proprietorship companies and considers them one and the same.
The session addressed the improvements and benefits that will come into effect as a result of applying the new law with regard to limited liability companies; a business structure that is favoured among Qatari businessmen.
The ministry highlighted the new law’s role in reinforcing Qatar’s economic competitiveness and boosting investments.
Qatar had last month announced a new national definition, whereby a SME is an entity with workforce of maximum 250 employees (except for the creative sector where employees would not exceed 100), and annual revenue of maximum QR100mn.
The definition identifies five main sectors, including agriculture, transformational industries, creative industries, constructions and trade, in addition to the sector of different services. The new law not only signifies a major leap forward in terms of simplifying business practices in Qatar but also addresses a number of challenges that existed under the previous law, said the representatives of limited liability companies, who attended the session.
The new law is part of a comprehensive plan by the MEC to reform legislation and streamline incorporation procedures for companies in a bid to bolster the private sector’s contribution to sustainable development in Qatar.
The new law incorporates international standards applied to determine the ranking of countries in terms of the ease of doing business and aims to support investors by establishing a business-friendly environment.
