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Location: Commercial Companies Law 2001 > Commercial Companies Law > Part II — General Partnership Company > Article (30)
  • Part II — General Partnership Company

    • Article (25)

      A General Partnership company is a company established by two persons or more under a certain name, and in which the partners are jointly liable to the extent of all their property for the company's obligations.

      Without prejudice to the provisions of laws regulating self-employment professions, general partnership companies may be formed — regardless of their type — among Bahraini or Non Bahraini partners in accordance with the rules and guidelines decreed by the Minister of Commerce and Industry.

    • Article (26)

      The Memorandum of Association of a general partnership company shall comprise the following details:

      i— The company's name and trade mark, if any.
      ii— The company's headquarters and branches.
      iii— The company's objectives.
      iv— The partners' names, titles, nationalities and domiciles.
      v— The names of the executive managers and persons authorized to sign for the company and their competence and power limits.
      vi— The company's capital and the share of each partner therein.
      vii— The manner in which profits and losses are distributed among partners.
      viii— The company's term, if any
      ix— The beginning and end of the company's financial year.
      x— The manner in which the company shall be liquidated and its assets divided up.

    • Article (27)

      The name of a general partnership company shall consist of the names of all partners or the name of one or more of them accompanied by (& Co.) or by a similar word giving the same meaning. The name of the company, wherever mentioned, shall be followed by (A Bahraini Partnership Company); and shall always conform to its current status.

    • Article (28)

      Any non-partner whose name is included in the company's name with his knowledge and consent shall be jointly liable for its obligations towards any other person who has counted in good faith on this name.

    • Article (29)

      The partners may draw up in a written and certified official document articles of association for the company, which shall include the detailed provisions they agree upon for managing the company. A copy thereof shall be attached with the Memorandum of Association of the company.

    • Article (30)

      The company's Memorandum of Association and subsequent amendments thereto shall be notarized by entering it in the Commercial Registry in conformity with the law of this registry. A summary of the company's Memorandum of Association and subsequent amendments thereto shall be published in the Official Gazette at the company's expense.

    • Article (31)

      The summary of the company's memorandum of association shall specifically include the following details:

      i— The company's name, objective, headquarters and branches, if any.
      ii— The partners' names, domiciles, professions and nationalities.
      iii— The company's capital and sufficient definition of each partner's shares and its due date.
      iv— The names of the managers and the persons authorized to sign for the company.
      v— The date of the company's incorporation and its term.
      vi— The beginning and the end of the company's financial year.

    • Article (32)

      Each partner shall have the capacity of a merchant who undertakes trade under the company's name. The bankruptcy of the company shall be deemed bankruptcy of all partners.

    • Article (33)

      The partners' shares shall not take the form of tradable instruments, and the partner shall not assign his share in the company to other persons without the consent of all partners or to the prejudice of the provisions of the company's memorandum of association. Procedures of publication and registration of such assignment shall be undertaken in accordance with the provisions of articles (7&30) of this law. Any agreement that permits unconditional assignment of shares shall be deemed null and void.

    • Article (34)

      The company's employees or affiliates who share profits in lieu of their wages for all or part of their work shall not be considered partners.

    • Article (35)

      The company's creditors shall have a claim on the company's assets, and shall have also a claim on the private assets of any partner who used to be a member of the company at the time of contracting.

      All partners shall jointly be liable towards the company's creditors, and any agreement to the contrary shall not be valid towards third parties.

    • Article (36)

      i— If a new partner joins the company, he shall be liable jointly with the other partners, to the extent of his property, for the company's preceding and subsequent obligations, and any agreement to the contrary shall have no effect towards third parties.
      ii— If any partner withdraws from the company, he shall not be liable for the company's obligations subsequent to the publication of his withdrawal.
      iii— If any partner assigns his share in the company, he shall remain liable for the company's obligations towards its creditors unless they approve this assignment.

    • Article (37)

      A partner's property shall not be subject to execution due to the company's obligations without a court decision against the company and before soliciting the company for the settlement thereof. The court decision shall be evidence against the partner.

    • Article (38)

      i— Any partner shall not, without the consent of the other partners, undertake any activity for himself or for other persons in competition with the company, or be a partner in another general partnership company or a partner or a sleeping partner in a limited partnership company or a limited liability company if such companies are exercising competing activities to those of the company.
      ii— If any partner fails to honor his obligations under the foregoing paragraph, the company may claim compensation from him or consider the activities he conducted for himself as conducted for the company. He shall then surrender to the company all the profits resulting from these activities without netting them out with the profits he is entitled to from the company.

    • Article (39)

      i— If any partner takes or retains an amount of money that belongs to the company, he shall refund it without prejudice to the right of compensation if required.
      ii— If any partner provides the company with his own money or spends in good faith to its benefit, the company shall refund such money together with compensation equal to the benefit it has gained from such money.

    • Article (40)

      Management of the company shall be undertaken by all partners unless the partners appoint, in the memorandum of association or in a separate contract, a manager or more from among the partners or non-partners to manage the company

    • Article (41)

      The manager shall undertake the day-to-day management of the company as specified in the Memorandum and Articles of Association.

      If there is more than one manager without specifying the competence of each of them, and in the absence of a provision confining the management to any of them, each manager may individually take managing actions, provided that the other managers shall have the right to object to these actions before they are completed. In such a case the actions taken shall be passed by the numerical majority of managers and, in the case of equal vote, shall be referred to the partners.

    • Article (42)

      If there is more than one manager without a stipulation that they shall collectively undertake management, their decisions shall be taken unanimously unless the memorandum of association provides for a specific majority. This condition shall not be violated except in the case of urgency where the company may incur a heavy loss or lose a substantial profit if it fulfils it.

    • Article (43)

      In the absence of a provision on the way the company shall be managed, each partner shall be considered authorized by the other partners to manage the company, and he shall take the charge of management without recourse to the other partners provided that they shall have the right to object to any action before it is completed. The majority of partners shall have the right to overrule the objection.

    • Article (44)

      i— If the manager is a partner appointed in the company's memorandum of association, he shall not be dismissed except by a court decision upon application by the majority of partners and on the basis of acceptable justification. Any agreement to the contrary shall be null and void. The company shall be dissolved if the manager is dismissed unless otherwise provided for in the memorandum of association.
      ii— If the manager is a partner appointed in a separate contract, or a non-partner appointed in the memorandum of association or in a separate contract, he may be dismissed by the majority of partners. Such dismissal shall not bring the company to dissolution.
      iii— If the manager is paid for his job and has been dismissed at an unsuitable time or for unacceptable reasons, he may claim compensation for any damages he may have sustained.
      iv— The dismissal and the appointment of a manager shall be registered in accordance with the provisions of articles (7) & (30) of this law.

    • Article (45)

      i— If the manager is a partner appointed in the memorandum of association, he shall not resign his office for unacceptable reasons, otherwise, he shall be liable to pay compensation. The manager's resignation shall result in dissolving the company unless otherwise provided for in the memorandum of association.
      ii— If the manager — whether he is a partner or not — is appointed in a separate contract, he may resign his office, provided that the time is opportune and that he brings his resignation to the notice of the other partners, otherwise he shall be liable to pay compensation. In this case the company shall not be dissolved.

    • Article (46)

      The non-manager partner shall not interfere in the company's management. However, he may monitor the performance of the company at its headquarters and inspect its books and documents. He may also get a summary statement of the financial position of the company from its books and documents and provide the manager with his advice. Any agreement to the contrary shall be null and void.

    • Article (47)

      The company shall be bound by all actions taken by the manager within his powers if he ascribes his actions to the company's commercial name even if he is working for his own interest so long as the third party he deals with is acting in good faith.

    • Article (48)

      i— The decisions of a general partnership company shall be taken by unanimity of the partners unless the memorandum of association provides for the majority. In this case, majority means simple majority unless otherwise indicated in the memorandum of association.
      ii— The decisions pertinent to the amendment of the company's memorandum of association shall not be valid if not taken by the unanimity of the partners.

    • Article (49)

      i— Profits and losses and the dividend of each partner therein shall be determined at the end of the company's financial year as per the balance sheet and the profit & loss account.
      ii— Each partner shall be deemed a creditor of the company with his dividend in profits upon determining it by approving the balance sheet.
      iii— Any reduction in the company's capital resulting from losses shall be covered from the profits of subsequent years unless otherwise agreed upon. In any event, no partner shall be obliged to cover the reduction in his share in the capital without his consent.

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