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  • Part XII — Part XII — Termination of the Company

    • 1 — 1 — Company Dissolution

      • Article (320)

        The company shall be dissolved for any of the following reasons:

        a— Expiry of its specified term unless the company's memorandum or articles of association provides for its renewal.
        b— Achieving the objectives for which the company was incorporated.
        c— Destruction of all or most of its assets to the extent that it becomes useless for it to continue.
        d— A unanimous resolution by all partners to dissolve it before the expiry of its term, unless the company's memorandum or articles of association provides for certain majority.
        e— Merging the company with another company.

        The registration of the company shall be struck off by an explained decree by the Ministry of Commerce and Industry if the company does not undertake its activities for one year from the date of the completion of its incorporation procedures or if it suspends its activities for a continued period exceeding one year without acceptable justification.

        The Ministry of Commerce and Industry shall notify the company the registration of which is to be struck off in accordance with the procedures decreed by the Minister of Commerce and Industry.

        Any interested party shall have the right to appeal against the decree to the Minister of Commerce and Industry within a period of no more than thirty days from the date of publication of the decree in the Official Gazette or from the date of notification of the concerned person of that action.

        Such appeal shall be decided on within thirty days from the date of its submission, and the lapse of such period without taking a decision shall be deemed rejection thereof.

        The appealing party may object to the rejection of his appeal before the High Civil Court within forty-five days from the date of his knowledge of the rejection or from the date of deeming it as rejected.

        Striking off the registration shall not terminate the responsibility of the members of the board of directors, the managers, the partners and the shareholders. This responsibility shall remain as if the company is still going.

      • Article (321)

        a— Except for public joint-stock companies, the court may decide, at a request by a partner, to dissolve any company if it finds serious reasons justifying such dissolution, and any provision depriving partners from using this right shall be deemed null and void. If such reasons have to do with the acts of any partner, the court may decide to discontinue his membership and to evaluate his share according to the latest inventory, unless the company's memorandum of association provides for another method of evaluation. In this case the company shall continue among the other partners.
        b— The court may also decide to dissolve the company at a request by a partner if a partner has not honored his obligations.

      • Article (322)

        a— General partnership companies, limited partnership companies and associations in participation shall be dissolved for any of the following reasons:
        1— Withdrawal of a partner from the company if its term is indefinite. However, the partner shall withdraw in good faith and notify the other partners of his withdrawal in a suitable time, failing which a court order may be obtained obliging the partner to continue in the company and to pay compensation if necessary. If the company's term is definite the partner shall not withdraw from the company without a court order.
        2— Death of a partner or if a court passes a restraint order against him or if he is adjudged bankrupt or insolvent.
        b— The company's memorandum of association may provide for its continuation with the heirs of a deceased partner even if all or some of them are minors. If the deceased partner was a joint partner and the heir is a minor, the minor shall be considered a ing partner to the extent of his share in that of his legator. In this case the continuation of the company shall not require a court order to keep the minor's money in the company.
        c— The company's memorandum of association may provide for its continuation with the remaining partners in case of withdrawal or death of a partner or if an order of distraint is passed against him or if he adjudged bankrupt or insolvent. If the company's memorandum of association does not contain such a provision, the partners may, within sixty days from the date of withdrawal, death or the order of distraint or adjudication of bankruptcy or insolvency unanimously agree to continue the company among them. Such agreement shall not be binding on third parties before the date of entering it in the Commercial Registry.
        d— In all cases of continuation of the company among the remaining partners, the share of the withdrawing partner shall be evaluated by an accredited auditor unless the company's memorandum of association provides for another method of evaluation. Such partner or his heirs shall not have a share in subsequent rights except for those resulting from operations performed before his withdrawal from the company.

      • Article (323)

        A limited partnership by shares shall be dissolved if a joint partner withdraws therefrom or deceased or if a distraint order is passed against him or if he adjudged bankrupt or insolvent, unless otherwise provided for in the company's memorandum of association.

        If the company's memorandum of association does not contain a provision in this respect, the extraordinary general assembly may decide to continue the company, and the procedures governing amendments to the company's memorandum of association shall apply.

        If all joint partners in a limited partnership by shares withdraw or deceased or if distraint orders are passed against all of them or if they are adjudged bankrupt or insolvent, the company shall be dissolved unless its memorandum of association provides for the conversion thereof into another form of company.

      • Article (324)

        A limited liability company shall not be dissolved if a partner or more withdraws or deceased or if a distraint order is passed against him or if he is adjudged bankrupt or insolvent, unless otherwise provided for in the memorandum of association.

    • 2 — 2 — Liquidation of the Company and Division of its Assets

      • Article (325)

        a— Every company shall be in a state of liquidation upon dissolution.
        b— The powers of the managers or the board of directors shall terminate upon the dissolution of the company. However, the managers shall continue to manage the company, and shall be considered towards third parties as liquidators until a liquidator is appointed and they give him their accounts and all the company's assets, books and documents.

      • Article (326)

        a— The company shall maintain its corporate entity during the liquidation period to the extent necessary for liquidation.
        b— The phrase (under liquidation) shall be added to the name of the company during the period of liquidation.
        c— The company's bodies shall remain during the period of liquidation, but their powers shall be confined to the liquidation measures falling outside the liquidators' competence.

      • Article (327)

        Relevant provisions in the company's memorandum or articles of association shall apply to liquidation. If they do not contain such provisions, the provisions of the following articles shall apply.

      • Article (328)

        a— The partners or the extraordinary general assembly shall appoint, from among the partners or non-partners, a liquidator or more to undertake the company's liquidation, and determine his remuneration. The liquidator shall be appointed by the simple majority by which the company's resolutions are passed.
        b— If the company's dissolution or nullity is decided by the court, the court shall specify the manner of liquidation and appoint the liquidator and determine his remuneration. The liquidator's job shall not terminate upon the partners' death or if they are adjudged bankrupt or insolvent or if a distraint order is passed against them even if he was appointed by them.

      • Article (329)

        a— The liquidator's name and the partners' agreement on the liquidation manner or the court decision thereon shall be marked in the Commercial Registry and shall be published in one of the local daily newspapers. The liquidator shall follow up the entry procedures.
        b— The liquidator appointment or the manner of liquidation shall not be effective towards third parties before the day following the date of publication.

      • Article (330)

        a— The liquidator shall be dismissed in the same way he was appointed.
        b— In all cases, the court may, at a request by a partner and for acceptable reasons, decide to dismiss the liquidator.
        c— Any decision dismissing the liquidator shall appoint whoever replaces him.
        d— The dismissal of the liquidator shall be entered in the Commercial Registry and shall be published in one of the local daily newspapers, and it shall not be effective towards third parties before the day following the date of publication.

      • Article (331)

        a— The liquidator shall, on his appointment and in agreement with the board of directors or the managers, carry out an inventory of the company's rights, assets and liabilities. A detailed list thereof and a balance sheet shall be prepared and signed by the liquidator, the board of directors and the managers.
        b— The board of directors or the managers shall submit their accounts to the liquidator and hand him over the company's property, books and documents.
        c— The liquidator shall maintain a register to enter therein the liquidation acts, and such register shall be subject to the provisions of the Commerce Code regulating the commercial books.

      • Article (332)

        a— The liquidator shall take the necessary actions to safeguard the company's property and rights.
        b— He shall recover the company's rights with third parties; however, he shall not request the partners to pay the unpaid part of their shares unless liquidation so requires and provided that all partners shall be equally treated.
        c— The liquidator shall immediately deposit the amounts he receives in the account of the company under liquidation with any of the banks.

      • Article (333)

        The liquidator shall undertake all tasks required for liquidation, and in particular the following:

        a— Representing the company towards third parties before the courts of law and accepting reconciliation and arbitration.
        b— Selling the company's movable and immovable property by public auction or by any other method unless the liquidator's appointment document provides for other methods of sale.
        c— Paying the company's due debts and setting aside the deferred or disputed debts.

      • Article (334)

        a— The liquidator shall not initiate new activities unless they are necessary for the completion of previous activities. If he initiates new activities that are not necessary for liquidation he shall be liable to the extent of all his property for such activities. If there is more than one liquidator they shall be jointly liable.
        b— The liquidator shall not sell the assets of the company as a whole without permission from the partners or the ordinary general assembly.

      • Article (335)

        a— The liquidator shall notify all the creditors of the commencement of liquidation and invite them to submit their claims. The notification shall be made by a registered letter with a delivery note or by publishing it in a local daily newspaper if the creditors are not known or if their domiciles are not known.
        b— Without prejudice to the rights of the privileged creditors, the liquidator shall pay the company's debts in proportion thereto.
        c— If some creditors fail to submit their claims, their debts shall be deposited with the court's treasury.
        d— Funds adequate enough to pay the disputed debts shall be deposited with the court's treasury, unless the owners of these debts obtain adequate guarantees or unless the distribution of the company's funds is deferred until the dispute on the said debts is resolved.

      • Article (336)

        If there is more than one liquidator, their acts shall not be valid unless they unanimously agree thereon in case the document of their appointment does not provide otherwise. This provision shall not be effective towards third parties before the date of its publication in one of the local daily newspapers.

      • Article (337)

        The company shall be bound by the liquidator's acts undertaken in its name if such acts are necessary for liquidation purposes, even if he uses the company's signature for his own account unless the person he contracted with is mala fide.

      • Article (338)

        Debts arising from liquidation shall have priority in payment from the company's funds over other debts.

      • Article (339)

        a— The liquidator shall complete liquidation within the period specified in his appointment document. If such period is not specified, each partner may take the matter to the competent court to specify the period within which liquidation shall be completed.
        b— However, the period specified for liquidation may be extended by a resolution by the partners or by the general assembly after considering the liquidator's report in which he states the reasons justifying the incompletion of liquidation in the specified period. If the liquidation period is specified by the court, it shall not be extended without the permission thereof.

      • Article (340)

        a— The liquidator shall submit every six months to the partners or to the general assembly an interim account on liquidation.
        b— He shall furnish the partners with the details and information they request to the extent that does not cause any harm to the company's interests or delay liquidation.

      • Article (341)

        a— The company's funds shall be distributed on all partners after the payment of the debts referred to in article (338) of this law and after honoring the rights of the company's creditors.
        b— Each partner shall receive an amount equivalent to the value of the share he provided in the capital as stated in the memorandum of association or in the resolution of the general assembly approving its evaluation, or equivalent to the value of this share at the time of subscription if the value is not stated in the memorandum of association.
        c— If the partner's share is in the form of work or usufruct he shall get nothing.
        d— The remaining part of the company's funds shall be distributed among partners in proportion to their respective dividends in profits.
        e— If the net value of the company's assets is not sufficient to pay the partners' shares in full, the loss shall be distributed among them with the same percentages specified for loss distribution.

      • Article (342)

        The relevant provisions in the company's memorandum or articles of association shall apply to the distribution of the company's funds. If the memorandum or articles of association does not include such provisions, the provisions of the Civil Code regulating the distribution of common funds shall apply.

      • Article (343)

        a— The liquidator shall submit to the partners or to the general assembly a final account on liquidation.
        b— Liquidation shall be completed on the approval of the final accounts.
        c— The liquidator shall enter the completion of liquidation in the Commercial Registry and publish it in one of the local daily newspapers. Completion of liquidation shall not be effective towards third parties before the date of publication.
        d— The liquidator shall, on the completion of liquidation, apply for striking off the company from the Commercial Registry.

      • Article (344)

        The company's books and documents shall be maintained for ten years from the date of striking off its name from the Commercial Registry at the place specified by the partners or the general assembly.