Chapter Three — Chapter Three — Transfer, Disposal, Mortgage and Distraint of Shares
Article (119)
The shares and the interim certificates may be traded, and the company may purchase its shares in the cases and in accordance with the rules decreed by the Minister of Commerce and Industry.
The disposal of the shares shall be effective against the company or third parties only upon the registration thereof in the relevant register.
Trading in the shares shall be effected in pursuance of the provisions of the law of the Bahrain Stock Exchange and the internal regulation of the market. The purchaser must be a Bahraini national. However, non-Bahrainis may own and trade in shares of the Bahraini joint stock companies in accordance with the provisions of this law and with the rules and the conditions and the percentages decreed by the Minister of Commerce and Industry, except for the companies excluded by a Ministerial decree.
The company may suspend the registration of the shares transfer during the period between the date of the call for a general assembly meeting and the date of this meeting.
The company may refuse to register the disposal of the shares in the following cases:
i— If the shares are mortgaged or distrained by a court order.ii— If the shares or the interim certificates are lost and no other shares or certificates are given in lieu thereof.iii— If dealing in the shares or the title transfer is in contravention of the provisions of law or of the rules, the conditions and the percentages decreed by the Minister of Commerce and Industry or of the company's articles of association.iv— If the value of the shares has not been fully paid to the company or if the company claims a debt thereon.Article (120)
The shares and the interim certificates may be mortgaged, donated or disposed of in any manner. The provisions of the foregoing article shall apply to such disposal.
The share mortgage shall be made by marking it overleaf, and the rank of the mortgagee shall be determined from the date of entering the mortgage in the share register.
The mortgagee shall receive dividends and use the rights attached to the share unless otherwise agreed upon in the mortgage contract. However, the mortgagee shall not attend the general assembly meetings or take part in its deliberation or approve its decisions.
The mortgage shall not be deleted except by a declaration of acceptance of such deletion by the creditor or by a final court order. The deletion shall be marked in the share register.
Article (121)
No heirs or creditors of a shareholder are entitled for any reason whatsoever to request for the seizure of the company's books, documents, or property, or to demand the winding-up or the sale of the whole company, or to interfere in any way whatsoever in the management of the company's business. In exercising their rights, they shall rely only on the company's records, financial accounts and the general assembly's resolutions.
Article (122)
The company's property shall not be distrained to discharge debts owed by one of the shareholders. However, the shares of the debtor and its dividends may be distrained, and such distraint shall be entered in and deleted from the relevant register upon a notice by a competent authority.
The distrainer and the mortgagee shall be subject to all the resolutions passed by the general assembly in the same way they apply to the distrainee or the mortgagor without having membership rights in the company.
Article (123)
The holders of the in-kind shares shall not dispose of their shares before the elapse of two years from the date of the final incorporation of the company. However, the holders' heirs, in the case of his death, or the bankruptcy trustee, in the case of his bankruptcy, may dispose of his shares during such period.
Article (124)
The founders shall not trade in the shares they have subscribed for before the publication of the balance sheet and the profit and loss account for a financial year of not less than twelve months from the date of publication of the company's incorporation unless the company's articles of association provides for a longer period. A notation shall be made on these shares indicating its type and the date of the company's incorporation.
However, the titles of the shares may be transferred during the ban period by way of sale from one founder to another or from the heirs of one founder to a third party or from the bankruptcy trustee of the bankrupt founder to a third party. The provisions of this article shall apply to the shares subscribed for by the founders in the case of increasing the capital of the company before the expiry of the ban period.
