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  • Part X — Part X — Conversion of Companies

    • Article (305)

      Any company may convert from one legal form to another. If conversion is to a joint-stock company, at least two financial years must have lapsed since the company was registered with the Commercial Registry. The conversion decision shall not issue before the company's managers prepare a report on the company's assets and liabilities and the results of the balance sheet for the preceding two financial years, to be signed by the auditor and ratified by the Ministry of Commerce and Industry.

    • Article (306)

      Conversion shall be effected by a resolution passed in accordance with the provisions and procedures governing the amendment of the company's Memorandum and Articles of Association. Such resolution shall not be effective before the lapse of sixty days from the date of its publication in the Official Gazette and in at least one of the local daily newspapers and after the completion of the incorporation procedures of the form into which the company is to convert and after the annotation thereof in the Commercial Registry.

    • Article (307)

      The partner who objects to the resolution of conversion may withdraw from the company and recover the value of his share or stake by submitting a written application to the company within sixty days from the date of the publication of the conversion resolution in accordance with the foregoing article. The value of the share or stake to be paid shall be either the actual or the market value at the conversion date whichever is higher.

    • Article (308)

      For companies to convert, they must repay their loans and banking facilities before conversion or obtain the creditors' approval of such conversion before the competent authorities approve it.

    • Article (309)

      A converted company shall not acquire a new corporate entity, but shall maintain its rights and obligations established before conversion. Conversion shall discharge the joint partners from the company's obligations before conversion unless the creditors object to the conversion within sixty days from the date of notifying each of them, by a registered letter with a delivery note, of this decision. The objection shall be submitted by using the normal procedures of filing legal actions, and shall be heard by the High Civil Court. The joint partners shall continue to be liable towards the objecting creditors until the objection is finally decided on.

    • Article (310)

      Every partner, in the case of conversion, shall have a number of shares or stakes in the converted company equal to the value of the share or stake he owned before conversion. If the conversion was to a limited liability company and the value of the share or stake of a partner is less than the minimum limit for the nominal value of the share in the limited liability company, the partner shall complete the value in cash.

    • Article (311)

      For a joint-stock company that has issued loan bonds to convert it must repay the value of the bonds before the Ministry of Commerce and Industry approves such conversion.