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Companies law amendment helps boost local economy – Experts shed light on new rules
March 11, 2014, 10:33 pm
The new companies law that was issued in 2012 and amended in 2013 brought many new changes to the legal status and regulation of businesses in Kuwait. To highlight the most important changes, the Luai Al-Kharafi law firm held a three-day conference from March 10-12 at the Arraya Ballroom.
The development of economic life during the past few years was behind the amendment of the companies law. “This amendment is an important step for economic development and to transform Kuwait into an international financial and economic center.
The new law includes many new rules and new forms of companies such as the one-person company, professional partnerships and special-purpose companies like nonprofits,” said attorney Luai Al-Kharafi during the conference. A one-man company is a business entity established by solely one person without partners. Such a company acquires a legal personality and a patrimony separate from that of its owner. A professional partnership is a business entity formed by two or more professionals such as accountants, doctors or lawyers who provide professional services to the public.
The new law obliges existing companies to readjust their status by Oct 1, 2014. “It’s important to clarify the new amendments of the companies law with all the changes it brought through discussions with experts from the legal field,” Kharafi added. Dr Mansour Al-Saeid, Undersecretary of the Ministry of Commerce for Legal Affairs, noted that the company law was issued in 1960 and no longer worked for the modern development of trade and business. “The new amendment is encouraging foreign capital to enter Kuwait as it included the law of foreign companies. This amendment corrected the negativities of the old law, and the ministry played a great role in this amendment to overcome its problems.
This is the first time the law includes an executive list and clear articles were added, which saves judges’ efforts in resolving disputes,” he pointed out. Kuwait’s economy is a free economy that combines both the private and public sectors. “The government is interested in the private sector as it activates the development process and supports localizing the national capital and to attract international investment through ensuring a suitable investment environment, both legislative and executive,” stressed Saeid. The law has brought many important changes. “For the first time, it’s allowed to establish a civil nonprofit company.
The new law also established a new system to finalize the paperwork of establishing a company or readjusting its contracts through a new department called ‘Unified Window’, which includes representatives from all public institutions in charge. In addition, the law set a sharia inspection body for the companies that work according to Islamic sharia,” he added. Abdulrahman Al-Barrak, Deputy Chairman of the Kuwait Bar Association, stated that the old law no. 15/1960 was no longer suitable for the present era with all the political, economic and social changes that took place. “The development in this field was fast and huge during the past few years, which demanded urgent law amendment that was realized with the new law no. 25/2012,” he explained.
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