Frequently Asked Questions


Why and how are companies dissolved?

The dissolution of a company can result in its termination. The company can be dissolved for a number of reasons:

  1. The expiry of the period specified in the Memorandum or the Articles Of Association, unless the period is renewed in accordance with the company's Memorandum and Articles
    • The objects of incorporating the company are exhausted
    • The depletion of all or most of the company's assets, making it impossible to beneficially invest the remainder
    • Amalgamation
    • The unanimous agreement of the partners to terminate the company's duration unless the company's Memorandum provides for a specific majority

Are the courts involved in this process?

The court may order the winding up of a partnership, a simple partnership or a joint participation (venture) at the request of one of the partners however, this must be a justifiable reason. Moreover, where the Memorandum is considered to be terminated, the company can be decreed dissolved. Dissolution can also be caused where a public joint stock company or a limited liability company suffers a loss of more than half their capital. In this case the matter must be referred to the General Assembly for decision. The winding up of a company, with the exception of a joint participation, should be published in two local daily Arabic newspapers and recorded in the Commercial Register.

A limited liability company will not be dissolved on the withdrawal of one of its partners, his death or the passing of a judgment declaring him incapacitated, bankrupt or insolvent, unless the memorandum states otherwise.

A resolution to dissolve will require a similar majority to that stipulated in the amendment of the Memorandum. If the losses reach an amount equivalent to three quarters of the capital, the company's dissolution may be requested by the partners holding one fourth of the capital.

Main Menu

Contact Me