A limited liability company is a mixture of partnerships and money market companies based on mutual trust between partners, and each partner is responsible for the debts of the company within the limit of his share in the capital only, and before discussing the procedures. Establishing a limited liability company, we will first shed light on the most important characteristics of the company, and the necessary data to be mentioned in the articles of association.
The most important characteristics of a limited liability company
- The company’s capital is made up of shares and not shares, so it cannot be traded on the stock exchange (the law does not stipulate a specific financial value for the capital).
- The number of its members is neither less than two nor greater than fifty.
- Its incorporation and liquidation procedures are the simplest among other types of companies.
- Suitable for young people who want to start a simple and inexpensive private business.
- The liability of the partners is within the limit of their shares in the capital and their own funds are not returned.
- The company is managed by the one chosen from among the partners, provided that his name is entered in the articles of association of the company.
- Public sector employees cannot join the company.
- The partners can sell their shares by drawing up a martial contract signed by both the transferring partner and the new partner at the extraordinary general meeting.
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Data to be mentioned in the company’s articles of association
- The name of the company, its activity and its seat.
- The names of the partners and their personal data.
- Determine the value of the capital as well as the number and value of the shares.
- The proportion of shares of each partner and the way in which they are distributed
- The names and details of the managers and the determination of the authority granted to them.
- The place of the Ordinary General Meeting.
- The validity of the ordinary general meeting and the validity of its decisions.
- The validity of the extraordinary general meeting and the validity of its decisions.
- Determine the month in which the business’s fiscal year begins and the month in which it ends.
- Determine the minimum legal reserve.
- Names of the members of the supervisory board.
- Name of the auditor.
- The name of the company’s legal advisor.
Procedures for setting up a limited liability company
- Drafting of the initial contract for the company.
- In the case of foreign partners, the security inquiries form must be completed.
- No certificate of ambiguity.
- Opening of a bank account to deposit the capital in one of the banks approved by the Central Bank of Egypt.
- A form for monitoring the business file of the General Investment Authority, and the signature of the agent on the acknowledgment of receipt attached to the form.
- Fill in the information on the investment journal publication request form.
- Review the company papers by the facility employee, then send the documents back to the facility tracking service to assess the fee and extract the payment authorization.
- Submit the original of the payment order, a copy of it and two copies of the payment receipts to the establishment tracking service.
- In the event that the value of the capital exceeds 200,000 Egyptian pounds, it is necessary to go to the counter of the Bar near the authority to obtain the authorization to pay the costs of ratifying the contract.
- Transfer of the company’s file to the real estate register by the monitoring service to document the contract and the articles of association.
- The incorporation decision is rendered twenty-four hours after signing in front of the real estate register.
- Going to the lawyer in charge of incorporation present at the General Investment Authority after the issuance of the incorporation decision to follow up on its issuance, and when the decision is published, the lawyer examines the file then submits the company’s file to the Chamber of Commerce until a certificate of professional activity for the company is issued.
- Go to the commercial register after having prepared the following documents: (Certificate of activity practice – Documented act of association of the real estate register – the incorporation decision – the originals of receipts for the fees for registration in the commercial register – a guide to corporate governance and social responsibility – photos of agencies – copies of the national identity cards of executives and copies of their passports if they are foreigners).
- After 40 days after the publication of the constitution decision, one will go to the newspaper counter to receive the initial contract and the statutes published in the newspaper Al-Istithmar.
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In this article, we have presented the procedures for setting up a limited liability company in Egypt, with an explanation of what it means and its most important features.
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