Back Custom print Link Text Only Rich Text Print

  • 1 — 1 — Increasing the Capital

    • Article (125)

      The extraordinary general assembly may increase the authorized capital; and the ordinary general assembly may increase the issued capital up to the limit of the authorized capital, if any, provided that the issued capital must be paid in full before the increase. The approved increase in the issued capital must be made within the next three years to the date of the decision authorizing the increase. This period shall be calculated for any increase adopted or authorized before this law has entered into effect as of this date. However, in the cases specified in the Executive Regulation, some companies may issue new shares before the full payment of the value of the previous shares upon the approval of both the ordinary general assembly and the Minister of Commerce and Industry.

      The Ministry of Commerce and Industry and the Bahrain Stock Exchange shall be notified of the reports and the reasons requiring such increase.

    • Article (126)

      The capital may be increased in one of the following ways:

      i— Issuing new shares for the amount of the increase.
      ii— Transferring the reserve into capital through one of the following methods:
      1— Increasing the nominal value of the original shares without asking the shareholders to pay the difference, which shall instead be paid from the reserve, and the shares shall be marked with their new value.
      2— Issuing new shares for the amount of the increase and distributing them free of charge to the original shareholders in proportion to the original shares each shareholder owns.

    • Article (127)

      The nominal value of the new shares must be equal to the nominal value of the original shares. The extraordinary general assembly may decide to add a premium to the nominal value of the shares and determine its amount. The net amount of this premium shall be added to the statuary reserve even if it exceeds half the capital.

    • Article (128)

      i— The shareholders shall have priority right to subscribe for the new shares, and any condition to the contrary shall be deemed non-existent.
      ii— A statement shall be published in one of the local daily newspapers declaring priority of subscription given to the shareholders, the starting and closing dates thereof and the value of the new shares. The shareholders may also be notified of this statement by registered mail.
      iii— Each shareholder shall express his willingness to exercise his priority right in subscribing for the new shares within fifteen days from the date of publication of the statement referred to in the foregoing paragraph.
      iv— The priority right may be assigned to a third party against a quid pro quo, to be agreed upon by the shareholder and the assignee.

    • Article (129)

      i— The new shares shall be distributed among the shareholders who have applied for subscription in proportion to the shares they own in the company, provided that this proportion shall not exceed the new shares they have applied for.
      ii— The remaining new shares shall be distributed among the shareholders who have applied for more than they own in accordance with the provisions of the foregoing paragraph.
      iii— Any remaining new shares shall be offered for public subscription, and the same provisions relating to public subscription on the company's incorporation shall apply.

    • Article (130)

      i— In the case of offering new shares for public subscription, a prospectus shall be issued containing, in particular, the following details:
      1— The reasons for the capital increase.
      2— The resolution of the extraordinary or the ordinary general assembly, as the case may be, authorizing the capital increase.
      3— The capital of the company at the time of issuing the new shares, the amount of the proposed increase, the number of the new shares and the issue premium, if any.
      4— A statement on the in-kind shares, if any.
      5— A statement on the average profits distributed by the company during the three years preceding the capital increase.
      6— A declaration from the auditor certifying the details mentioned in the prospectus.
      ii— The chairman of the board of directors and the auditor shall sign the prospectus and shall be jointly liable for the accuracy of the details contained therein.

    • Article (131)

      The board of directors shall publish the resolution of increasing the capital in the Official Gazette and in one of the local daily newspapers, and the resolution shall be entered in the Commercial Registry within one month from the date of increasing the capital.