The following conditions must be met to dissolve a limited liability company:
- The expiration of the period specified in the Memorandum and Articles of Association, unless this period is extended according to the terms in the documents.
- End of the purpose for which the company was formed.
- Loss of all or most of the company’s funds in a way that makes its investment of funds unprofitable.
- Transfer of all shares to a smaller number of shareholders or partners than the minimum legally required, unless the company converts to a different type within six months of the transfer or the number of shareholders or partners is increased.
- Merger according to the law.
- If the company’s Memorandum of Association does not have a majority provision, then partners must agree unanimously to terminate the company.
- A court order dissolving the company.
Article (304) explains that (2) If the partners agree to dissolve the company, the agreement must indicate the method for liquidation and the name of the liquidator. (3) No partner or shareholder is entitled to any part of the company’s capital when dissolved or liquidated unless all of the company’s debt is resolved.
A valid resolution of dissolution must be adopted by the partners with the same majority required for the amendment of the company’s Memorandum of Association, and they must have a liquidator. According to Article (305), the dissolution resolution shall be recorded in the commercial register with the competent authority by the company’s managers, board chairman, or liquidator, as the case may be, and the resolution shall be published in two local daily newspapers, one of which must be in Arabic. Dissolution resolutions can be invoked against third parties only from the date of entry in the commercial register. In order to close the bank account, the company must be dissolved in the commercial register.
