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06 July 2022

07 Thul-Hijjah 1443

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Law No. 5 of 2002, promulgating the Law of Commercial Companies

Law Summary Record Type: LawNumber: 5Date: 25/05/2002 Corresponding to 14/03/1423 HijriNumber of Articles: 348Status: In force

Official Gazette :Issue: 7Offcial Journal Issue Publication Date: 03/08/2002 Corresponding to 25/05/1423 HijriPage from: 17

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Board of Directors

94 Article

The management of a JSC shall be undertaken by an elected Board of Directors, the number of whose members and term of office shall be provided for by the Company's Articles of Associations. The members of the Board of Directors shall not be less than five and not more than eleven and their term of office shall not exceed three years.

A member of the Board of Directors may be re-elected more than once unless otherwise stipulated in the Articles of Association.

A member of the Board of Directors may withdraw from the Board provided that such withdrawal is made at an appropriate time, otherwise he shall be held accountable to the company.

95 Article

The general assembly shall elect the members of the Board of Directors by secret ballot, otherwise, the founders may appoint inter se the first Board of Directors for a maximum period of five years.

96 Article

The member of the Board shall fulfill the following conditions:

He must be less than twenty-one years old.
He must not have been convicted in any offence or a crime relating to honour and honesty or of one of the crimes provided for in Articles 324 and 325 of this Law unless he is rehabilitated.
He must be holder of a number of shares determined by the Articles of Association and specified as a security for the rights of the company, shareholders, creditors, and third parties.

Such shares shall be deposited within sixty days from the date of commencement of membership, at one of the approved banks. The deposited shares shall not be subject to transfer, lien or attachment until the balance sheet of the last financial year in which he was holding office is approved.

Failing to provide the aforesaid security nullifies the membership of the Board member

97 Article

With the exception of government representatives in joint stock companies and persons who hold at least 10% of the capital therein, no person, either in his personal capacity or as a representative of one of the corporate persons, shall be permitted to become a member of the Board of Directors of more than three joint stock companies whose headquarters are located in the State nor shall such person be the Chairperson or a vice-Chairperson in more than two companies whose headquarters are located in the State.

In all cases, no person, either in his personal capacity or as a representative of one of the corporate persons, shall neither be a managing director of more than one company whose headquarters is located in the State, nor be a member in the Board of Directors of two companies having similar activities.

Failing the above nullifies the membership in the Board of Directors exceeding the quorum prescribed herein according to the date of membership. A manager whose office is invalidated shall reimburse all amounts received thereby from the company or companies.

98 Article

Where the State or public authority or corporation becomes a shareholder in a joint stock company, the State or public authority or corporation shall, instead of participating in electing the Board of Directors, delegate representative(s) to participate in the Board pro rata to the shares held. The number of such representatives shall be deducted from the total number of Board's members. The State or public authority or corporation shall have the exclusive right to dismiss such representatives and replace them at any time.

The representatives of the State or public authority or corporation appointed in the Board of Directors shall have the same rights and liabilities accorded to elected members. The State or public authority or corporation appointed shall be liable for the actions of its representatives towards the company; creditors and shareholders' therein.

The representatives of the State or public authority or corporation in the JSC Board of Directors shall be exempted from submitting the security shares for their memberships.

99 Article

The BoD, through secret ballot, shall elect a Chairperson and a vice-Chairperson for one year unless the Articles of Association determines otherwise. The term of the Chairperson and vice-Chairperson shall not exceed three years.

The BoD may elect, through secret ballot, one or more managing directors. Such managing directors shall jointly or severally, according to the decision of the Board have the right to sign on behalf of the company.

100 Article

Where the office of one of the Board members becomes vacant, such office shall be filled by the member who received a majority of votes from the shareholders who have not attained membership of the Board. Where a justifiable reason prevents such manager from taking up the office, he shall be replaced by the next member who received a majority of votes. The new member shall only complete the unexpired term of his predecessor.

Where the vacant positions amount to one quarter of the original positions, the Board of Directors shall invite the general assembly to meet within a maximum period of two months from the date on which the last position becomes vacant in order to elect the members for these vacancies.

101 Article

Each company shall annually provide the Ministry with a detailed list, endorsed by the Chairperson, including the names, capacities and nationalities of the Chairperson and Board members. The company shall inform the Ministry of any change in this list as soon as it occurs.

102 Article

The Chairperson shall be deemed the head of the company and shall represent the company before courts and third parties. The Chairperson shall implement the Board decisions and abide by its recommendations.

The Chairperson may delegate some of his powers to other members of the Board.

The vice-Chairperson shall replace the Chairperson during his absence.

103 Article

The Board of Directors shall convene upon the invitation of its Chairperson pursuant to the provisions of the Articles of Association at the request of at least two members.

The meeting shall be valid only if attended by half the members, provided that three members thereof at least are present, unless the company's articles of association provide for a higher number or ratio.

The Board of Directors shall meet at least six times during the fiscal year of the company, unless the Articles of Association provide otherwise.

The meeting of the Board of Directors shall be held at least every two months.

An absent member may delegate in writing another in the Board meetings to act on his behalf in the attendance and voting, provided that one member cannot represent more than one member.

The decisions shall be adopted by majority of votes of the present representatives. In the event of a tie, the Chairperson shall have a casting vote. Voting by mail shall not be permitted.

A member not in agreement with a decision taken by the Board shall put such objection in the meeting minutes.

104 Article

Where a Board member is absent from three consecutive meetings of the Board or five inconsecutive meetings without acceptable justification to the Board, he shall be deemed resigned.

105 Article

Minutes of the Board meetings shall be prepared in a special record to be signed by the Chairperson, the managing director (if any), and the member or the officer who undertakes the secretarial work of the Board.

The minutes of meetings shall be regularly recorded in the record after each meeting and in serial order without deletion or erasure.

The signatories shall be liable for accuracy of facts recorded in the minutes and its compliance with the law and the Articles of Association of the company.

The pages of the register shall be numbered in sequence. Each page of the register shall be stamped by the competent authority and signed by the competent official.

The competent official shall confirm at the top of the pages the numbering and stamping of the pages and his signature before use.

It shall not be permitted to stamp a new register until after the previous register has been submitted to the competent authority and the competent official has recorded its closure

106 Article

Subject to the powers of the General Assembly as specified herein or in the company's Articles of Association, the Board of Directors shall have full authority to assume all the powers necessary to achieve the Company's objectives. The Board may, within its mandate, authorise one of its members to carry out one or more specific tasks or supervise one of the company's activities.

107 Article

Neither the Chairperson nor any other Board member may participate in any business competitive with that of the Company or trade for his own account or the account of third parties in one of the activities practised by the company.The company may otherwise demand indemnity therefrom, or considers businesses carried out for their account as for the company's account.

108 Article

The Chairperson, any Board member or director may not have any direct or indirect interest in the contracts, projects and transactions concluded for the account of the company. Shall be exempted from such restriction, the public contracting works and tenders where all the competitors are permitted to participate on equal footing. Where one of the persons mentioned in the previous paragraph offers the best tender, the ordinary general meeting, shall approve the same, which shall be annually renewed if such contracts and projects are regular and renewable.

In all cases, it shall not be permitted for any of the aforementioned concerned parties to attend any of the ordinary meetings of the general assembly or meetings of the Board of Directors if such meetings are pertaining to a matter related to any one of them.

Anyone who breaches the provisions of this Article shall be dismissed from his office in the company.

109 Article

The company shall not give cash loans whatsoever to any member of its board or guarantee any loan contracted by any of them with third parties. However, as an exception, banks or other financing companies may grant loans to the Board members or open a credit account for them or guarantee a loan contract concluded with third parties in accordance with the same rules and conditions that the company follows towards public customers.

Without prejudice to the right of the company to claim compensation from the defaulter in due time, any action being made in contravention of this Article shall be null and void.

110 Article

The Chairperson, member of the Board of Directors or any staff of the company are prohibited from utilizing the information accessible to them by virtue of their membership or position for the achievement of a benefit for themselves, or for their spouse, children or any of their immediate relatives up to the fourth degree as a result of trading in the securities of the company.

No one of such persons shall have any interest, directly or indirectly, with anybody involved in activities intended to affect the prices of the securities issued by the Company.

111 Article

The JSC shall be bound by all acts performed by the Board of Directors acting within their remit. The company shall also be accountable as to damages caused by unlawful acts by the members of the Board of Directors

112 Article

The Chairperson and members of the Board shall be jointly liable for compensating the company, shareholders and third parties against damages arising out of acts of fraud or misuse of powers, violation of the provisions of this Law or the Articles of Association, and any maladministration. Any provision to the contrary shall be null and void.

113 Article

Members of the Board of Directors shall all be liable under the preceding Article, if a default arises from a decision adopted unanimously thereby. However, in the event of decisions reached by majority votes, dissident members shall not be held liable if they entered their objection in writing in the minutes of the meeting. The absence from the meeting in which a decision was adopted shall not be a reason for exemption from liability unless it is proven that the absent member did not know about the decision or that he was unable to object to the same upon his knowledge thereof.

114 Article

The company, within five years from occurrence of a default or negligence resulting in damages to a group of shareholders, may file a liability claim against the Board members for such default or negligence.

The ordinary meeting of the general assembly shall take a decision appointing a person to pursue the case on behalf of the Company.

However, if the Company is under liquidation, the decision to file the case shall, by a General Assembly's resolution rest with the liquidator of the Company.

115 Article

When the aforesaid default causes personal damage to a shareholder, he may independently sue the company, provided that he informs the company of his intention thereto.

Any provision in the Articles of Association of the company to the contrary shall be null and void.

116 Article

Any decision adopted by the general assembly shall in no way discharge the Board of Directors from liability or dismiss a liability claim against Board members because of defaults committed during the execution of their duties. If the act giving rise to liability was forwarded to the general assembly and it was ratified thereby, the liability claim shall be dropped after five years from that meeting of the general assembly. However, if the act attributed to the Board members is a criminal act, the liability claim shall not become invalid until the public claim is invalidated.

117 Article

The general assembly may, by a resolution adopted by the absolute majority of the Board of Directors or by a request signed by shareholders possessing not less than 25% of the subscribed shares in the capital, dismiss the Chairperson or any elected member of the Board.

Consequently, the Chairperson shall call the general assembly for a meeting within ten days from the date of the dismissal notice; otherwise, the competent authority shall make such an invitation.

118 Article

The company's Articles of Association shall determine the remuneration of the members of the Board of Directors which shall not exceed 10% of the net profit after the deduction of the legal reserves and depreciation, and after the distribution of dividends at not less than 5% of the paid-up capital to the shareholders.

It may be stipulated in the company's Articles of Association, upon the approved of the general assembly that the members of the Board receive a certain amount if the company does not make profits. The ministry may determine a higher limit for such amount.

119 Article

The Board of Directors shall prepare every fiscal year the balance sheet, statement of profits and losses, cash flow statements, and justifications compared to the previous fiscal year, all of which shall be attested by the company's auditors. The Board of Directors shall also prepare a report on the activities of the company; its financial position during the previous fiscal year, and future plans for the coming year.

Within a period not exceeding three months from the end of the fiscal year, the Board shall prepare such statements and documents and submit them to the general assembly meeting to be held within a maximum period of four months from the end of the fiscal year of the company.

120 Article - Amended

The Board of Directors shall invite all shareholders to the general assembly meeting by an announcement published in two local Arabic daily newspapers and on the website of Qatar Securities Market.

The advertisement shall be published at least fifteen days before the meeting of the general assembly. The announcement shall include sufficient summary of the agenda of the meeting, all statements and documents provided for in the previous Article and the report of the company auditors.

A copy of the announcement shall be sent to the competent authority at the same time that it is sent to the newspapers.

121 Article

Annually, the Board of Directors shall, three days before the meeting of the general assembly to examine the balance sheet and the Board report, present to the shareholders, a detailed statement including the following:

All the amounts received by the Chairperson and each member of the Board in the fiscal year including remuneration, fees, salaries, bonuses for attending the meetings, and compensation for the expenses in addition to the amounts received by them in their capacities as technical or administrative employees or for any technical, administrative, or consultative work done for the company.
Material benefits enjoyed by the Chairperson and each member in the Board during the fiscal year.
The bonuses proposed by the Board to be distributed to the members.
Amounts specified to each member of current or previous managers as pension or reserve or compensation for the end of the service.
Deals in which the Board members or managers have interests that contradicts with the interests of the company.
The final amounts spent for the purposes of advertisement in any form with the details of each amount.
Donations with details of the party to whom the donations were made, the reason and particulars thereof.

For banks and other financial companies, a report of the auditor shall be attached to certify that all cash loans or credits or guarantees given by any of these institutions to the Chairperson or Board members during the fiscal year have been executed without violating the provisions of Article 109 of this Law.

This detailed statement shall be signed by the Chairperson and one member of the Board.

The Chairperson and members of the Board shall be liable for the implementation of the provisions of this Article and the verification of data in all the documents

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