Chapter One — Chapter One — Incorporation of the Limited Liability Company
Article (265)
a— The memorandum of association of a Limited liability company shall include the following details:1— The names, titles and nationalities of partners.2— The company's headquarters.3— The company's name and address, with the addition of the phrase (a limited liability Company).4— The company's objectives.5— The company's capital, and the cash and in-kind shares provided by each partner with a detailed description of the in-kind shares and their value.6— The conditions of share assignment.7— The term of the company, if any.8— The names of those entrusted with the company's management from among the partners or from others, and the names of the members of the control board in the cases in which law stipulates the existence of such board.9— Distribution methods of profits and losses.b— The partners may include in the company's memorandum of Association special provisions regulating the right of retrieval of partners' shares and the evaluation methods thereof when this right is exercised, and the formation of reserves other than the statuary reserve and the organization of the company's finance and accounts and the reasons of the dissolution thereof.c— The Minister of Commerce and Industry may decree the inclusion of other details than those included in paragraph (A) of this Article.Article (266)
A limited liability company shall not be incorporated unless all the cash shares are distributed among partners and the value thereof is fully paid and the in-kind shares are delivered to the company.
The cash shares shall be deposited with one of the licensed banks in Bahrain and shall only be withdrawn by the company's managers upon the submission of a certificate proving its registration in the Commercial Registry.
Article (267)
If the share presented by a partner is an in-kind share, the company's memorandum of association shall specify its type, value, agreed upon price by the other partners, and the name of the partner and the amount of his share in the capital against what he has paid.
The provider of the in-kind share shall be liable towards third parties for the estimated value thereof in the company's memorandum of association. If it is overestimated, he shall pay the difference to the company, and the other partners shall be jointly liable for such difference unless they prove that they were not aware of it.
The liability action provided for in the foregoing paragraph shall be barred after the lapse of five years from the date of entering the company in the Commercial Registry.
Article (268)
The company's manager, or whomever the partners delegate, shall register the company in the Commercial Registry and shall publish it in the Official Gazette and in one of the local daily newspapers at the company's expense. The company shall not acquire a corporate entity before registering it, and it shall not undertake its activities before registration. Any act undertaken for the company before registration shall only bind the person who undertakes it, and he shall be liable for it to the extent of all his property. If more than one person undertakes the act, they shall be jointly liable for it.
Article (269)
The capital of a limited liability company shall be divided into equal shares the value of which shall not be less than fifty Bahraini dinars. The share shall be indivisible. However, two persons or more may jointly own one share, provided that one person shall represent them towards the company. The partners in the same share shall be jointly liable for the obligations resulting therefrom.
Article (270)
The capital shares of a limited liability company shall be non-tradable. However, shares may be sold by a written instrument the signatures on which are certified unless otherwise provided for in the company's memorandum of association. Whoever intends to sell his share, or a part of it, shall notify the other partners of the offer he has received and its conditions — in particular the price and the name of the buyer — otherwise the act shall be ineffective. After the lapse of two weeks from the date of notification the partner may sell his share to third parties for the offered price at least if none of the partners requests to buy it. If more than one partner requests to buy the share, it shall be divided among them in proportion to their respective shares in the company's capital. If the assignment of the shares is free of charge, the assigned shares shall not be transferred without the approval of the majority of the partners owning shares of no less than seventy five percent (75%) of the capital after excluding the shares under assignment.
Article (271)
The assignment of a share shall be effective towards the partners and third parties as of the date of the registration thereof in the Commercial Registry and the publication thereof in the Official Gazette.
Article (272)
The share of a partner shall devolve to his heirs or beneficiaries in a will. If the share devolves by way of inheritance or will to more than one person, which increases the number of the partners to more than fifty, the shares of the heirs or beneficiaries shall be considered one share towards the company unless the heirs or the beneficiaries agree to transfer the share to a number of them falling within the maximum number of the partners. If all the company's shares are concentrated in the hands of one person, the company shall turn into a single person company unless it is dissolved.
Article (273)
If a personal creditor of a partner institutes execution proceedings against the share of his debtor, the share shall be offered for sale in a public auction unless the creditor agrees with the debtor and the company on the way and terms of the sale. In the case of sale by public auction, the creditor shall notify the company of the terms and conditions of the sale and the date of the session to be held for considering the objections thereto.
The company may, within ten days from the date of the decision approving the highest bid offered, find a buyer other than the successful bidder to buy the share on the same terms and conditions.
These provisions shall apply in the case of the partner's bankruptcy.
Article (274)
The company shall prepare a special register for the partners at its head office including their names, domiciles, professions, nationalities and the number of shares each one of them owns. It shall also show the assignment of the shares and the date thereof.
Each partner and any interested person shall have the right of access to this register. The details contained in the register and any changes therein shall be forwarded to the Ministry of Commerce and Industry.
