What is a Limited Liability Company?
A limited liability company is a company of funds consisting of at least two partners and no more than fifty partners. All or some of the partners may be individuals or companies whether they are Egyptians, foreigners or both. In the event that all partners are foreigners, one of the directors must be Egyptian.
There is no minimum or maximum capital; it may be cash, property or moral. In the case of the share in real estate and moral share, it must be assessed by a competent expert and all the shareholders should agree to this estimate.
Furthermore, the capital is divided into shares of equal value.
The Company is managed by one or more directors – whether Egyptian or foreign, partners or a third party – and the General Assembly shall determine the director’s competence. The General Assembly may replace the Director and appoint another one. Additionally, they have the right to amend his powers and specialization.
In the event of the change of the Director or the modification of his powers, it shall be acknowledged by the third party only after the passing of five days from the date of registration in the Commercial Register.
The Manager shall be personally asked in the event of incorrect data in the partners’ register and the General Assembly shall have the right of recourse in case of harm to the company.
If the number of partners exceeds ten, a supervisory board (composed of partners) shall be formed and appointed by the general assembly of the company. There is no upper limit to the board, however, they must be more than three; the duration of the members’ eligibility is three years.
The Supervisory Board shall administer the director’s work and follow up the work of the Company as well as submit a report to all the partners at least 15 days prior to the meeting.
Often, they are asked if they are aware of and failed to mention the director’s mistakes in their report to the partners’ group.
(Right of Redemption)
The limited liability company is characterized by the fact that the shares of the partners are recoverable, thus preserving the privacy of the partners. If one of the partners wants to sell their actual share, the other shareholders will be notified in a written letter knowing that they have reached the company’s headquarters with a desire to sell where the shareholders have one month to stake a claim on the share. In the event that all of the partners want to purchase the share, it shall be divided among them according to their own shares.
Should none of the shareholders proclaim a desire to buy during that period, the selling partner is entitled to sell his share to outsiders who are eager to secure new investment opportunities.
The managers or partners who own 5% of the capital shall are called upon to not only discuss and approve the annual budget of the company, but to also approve the works and take all decisions related to the management of the company. As aforementioned, they have the right to replace the director and appoint others.
The meeting shall be a quorum of no more than half and no less than one-quarter of the capital shares in the first meeting. Consequently, the second meeting will only be valid if the ratio of the present capital is between the partners, provided that it is written.
The voting should be by an absolute majority (51%) of the votes present in the meeting.
The voting should be carried out in the manner specified by the system or proposed by the President of the meeting and approved by the Assembly. The vote shall be anonymous in the case of the replacement of the Director and the appointment of another.
(The Extraordinary General Assembly)
1- The quorum of the meeting shall be at least half of the capital shares in the first meeting. The second meeting shall be valid provided that the percentage of attendance exceeds one quarter of the capital shares.
Decisions shall be made by the majority of two-thirds of the capital of the votes present and in cases where a majority of three-quarters of the votes present shall meet.
The vote shall be in the manner prescribed by the system or proposed by the President of the Meeting and approved by the Assembly.
Voting must be anonymous if the Director is dismissed.
The Director or partners who own 10% of the capital will be called upon in the following cases:
- Increasing the company’s capital.
- Reduction of the Company’s capital.
- Approval of not dissolving the company despite the percentage of capital loss.
- Dismissal of the Director.
- Adding objectives that are either complementary, or connected, to the original services or products produces by the business or changing the purpose of the company.
- Merging or dissolving the company ahead of schedule.
- Change the legal form of the company.