Numerous elements influence the company’s shape, including its social purpose, number of partners, capital requirements, taxation, turnovers, projects and goals, and so on.
Partnership
The two categories of partnership:
- General partnership (Société en Nom Collectif – SNC)
- Partnership in commendam (Société en Commandite Simple – SCS).
General Partnership
Two or more people can form a partnership. The fundamental feature of this structure is each partner’s contribution, as all partners are individually liable for the company’s debts and responsibilities. There is no legal requirement for capital. Because it engages in commercial activities, it must be registered with the commercial register.
The firm name commonly ends with the words ‘and Co.’ and includes the names of some or all of the partners. A limited partnership has two sorts of participants and is known as a commendam partnership. General partners are the owners and managers of the company. These are responsible for all of the company’s commitments. Limited – or silent – partners contribute financially but are not involved in management. Their culpability is restricted to their actions.
Co-Partnership (Société en Participation)
A co-partnership is a secret collaboration known only to the persons involved to complete a project, and it cannot be registered because it is secret. The rights and obligations of the partners, as well as their share of profits and losses, are spelled out in an association agreement. Each party is liable for its obligations.
Despite their confidentiality, co-partnership agreements are legally enforceable in the event of a dispute.
Limited liability company (Société à Responsabilité Limitée) SARL
Between one and twenty people form a limited liability company. Statute 126/2019 made it possible to form a limited liability company with just one partner. The initials SARL are commonly used to sequence the trade name, and the names of the partners may be included. The capital of 5 000 000 Lbp-Lebanese Pounds (about 3334 USD) must be paid in full. Each partner’s liability is restricted to the value of the shares held by that partner.
The capital must be fully deposited in the company’s name at a bank. One or more partners may be given management, and a manager cannot complete any contract or transaction on behalf of the company in which he has a financial interest. Except where prior authorization has been provided.
Joint Stock Company (Société Anonyme Libanaise) SAL
Three or more individuals form a joint-stock company. It should have at least 30 million LBP in authorized capital (The equivalent of 20 000 USD).
The shareholder’s shares allow them to membership in the firm, as well as the opportunity to participate in management and vote. These shares can be traded or transferred.
Each shareholder’s responsibility is strictly restricted to the value of the shares held. The Board of Directors is required to set aside 10% of net income in a statutory reserve fund until it reaches one-third of the company’s capital. An auditor must be appointed by a joint-stock company.
Branch Offices
Foreign enterprises interested in doing business in Lebanon can open a local branch or representative office.
To open a branch office, the Board of Directors of the foreign firm must give a proxy/power of attorney to a person residing in Lebanon, allowing him the ability to register the company in Lebanon, represent it, sign documents, and take all necessary steps on its behalf.
Commercial Representation
A Legislative Decree from 1967 governs and defines commercial representation, allowing a commercial agent to negotiate on behalf of his principal for the conclusion of transactions or the provision of services.
In this instance, the agent can operate in the principal’s name and on his or her accounts.
An arrangement offering exclusive representation or distributorship to a person is considered an agency agreement, and it can only be provided to Lebanese citizens unless the foreign agent is a national of a country that treats Lebanese nationals equally.
Holding Companies
A holding company is a type of joint-stock corporation controlled by laws No. 45/83 and No. 772, both of which were enacted on November 11, 2006.
As a result, a holding company’s activities are strictly confined to the following:
- Own shares and participation in Lebanese or international anonymous or limited-liability businesses, or participate in the formation of such companies.
- Run businesses in which it has shares or participation.
- Own and lease patents, inventions, privileges, trademarks, and any other registered rights to firms operating in Lebanon and abroad.
