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08/06/2020 The Financial Regulatory Authority (FRA) has issued Decree No. 91 of 2020 amending some rules for listing and removing securities listed on the Egyptian Stock Exchange (ESE) that allowed the members from outside the company to join both the review and risks committees as a guarantee of the impartiality. The main points of the decree: Regarding the reviewing committee: The decree implied a new rule which allowing the members from outside the companyt to join the reviewing committee in the listed companies, companies dealing in the securities, companies licensed to practice real estate financing, financial leasing and factoring activities, consumer finance companies, and microfinance companies; The committee shall be consisting of an odd number which shall not be less than three members from among the non-executive board members, however the majority of the committee must be independent and its chairman must be one of them; The decision urged the members of the committee to be known for their competence and experience in the company's field of work and that at least one of them have experience in financial and accounting affairs, and the committee may seek the assistance of an auditor or whoever it deems appropriate to attend its meetings (even if they are not a member). Regarding the Risks committee: The aforementioned companies must, upon establishing the risk committee, commit themselves to forming it from an odd number of members of no less than three, the majority of whom are from non-executive board members and independent members. The committee may include members from outside the company. The chairman of the committee must be from Non-executive or independent members. The (FRA) has granted these companies a period of time to reconcile their positions with a maximum period of 12/31/2020 in accordance with the decisions issued in this regard. If you have any questions concerning the issues raised above or would like to have a more detailed discussion, please feel free to contact us via email: firstname.lastname@example.org.
13-03-2020 The companies' registered in the Egyptian commercial registry are now under an obligation to identify their ultimate beneficial owners (UBOs) who have actual ownership or control over the company or any other legal entities, according to the new amendment to the executive regulations of the commercial registry law no.34/1976 by the Ministerial decree no.41/2020. The following is a brief outline the new amendments: The amendment imposes a new obligation on all companies and other legal entities registered under the commercial registry, to disclose their UBO's full information and record this information in a special register called the UBO Register; however this register is required to be updated regularly. This register must include but not limited to; names of actual owners of the company, their nationalities, national ID number, or the passport number for non-Egyptians, also such register must be held throughout the lifetime of the company and for a period of five years after the company cases operations or in the case of de-registration from the commercial register. The date of Entry into Force: The Amendment is entry into force on the 09th of March 2020, It is still unclear how this new amendments will be applied, so we will keep you update on the practice of this amendments and how the competent authorities will apply these rules. Compliance: The amendment obliged the companies registered in the commercial registry to comply with this rules, although there is no specific penalty for not complying with the stipulated amendments, however the general penalty stated in the commercial register law will be applied. If you need any legal assistance, feel free to contact us via email: email@example.com.
03-03-2020 On January 2018, the Egyptian president has issued a law no.4/2018, amending some rules of the companies' law no 159/1981; one of these amending was about recognizing a new form of the companies that are eligible under the Egyptian litigation system; which is "the one person company". The one person company is essentially a limited liability company with a solo founder, whether national or foreigner, natural or juristic person, the founder is liable only with the amount of the capital of the company unless stated otherwise by the law; in addition that amendment has recognized establishing the company from the beginning with only one founder or partner, or transforming the company from a different type into the one person company whenever the multiple partners condition is not applied. The following is a brief outline the terms of establishing a one person company: What is the process of establishing the one person company? The establishing process proceeding with the notification of the founder to the GAFI and the notification must contain the following documents: 1- A memorandum association of the one person company; 2- The approval of the competent authorities, if the company activity requires such approval; 3- the approval shall be from the council of Ministries or the competent ministry In the case of establishing the company by one of the general public persons; 4- The receipt of payment with one out of thousandth, from the paid capital, at least 100 EGP and maximums of 1,000 EGP. The required documents for forming the company, after the notification: 1- A none confusion certificate issued from the commercial registry; 2- A banking certificate depositing the full capital; 3- A copy of the national identification or the passport; 4- A power of attorney; 5- A security approval for the company's founder; 6- A copy of the bar association card of the attorney; 7- The certificate of the auditor of the company; 8- A possession deed or the lease contract of the company's head quarter. How to determine the name of the company? The company name shall be obtained from its purpose, or its founder name with a statement clarifies that it's a one person limited company. How much the capital should be? The minimum of the capital is fifty thousand EGP; it shall be paid in advanced in full. What are the allowed/ restricted activities? The one person company can participate into the commercial, industrial, professional activities. On the other hand, restricted from: 1- Insurance, banking and saving; 2- Receiving deposits and investing money on behalf of others; 3- Establishing another one person company; 4- Issuing the prospectus either at establishing or increasing the capital; 5- Dividing the capital shares into the negotiable ones. When the one person company gains its legal capacity and what is the founder's liability limits? It gains its legal capacity at the registration date in the commercial register. The company responsibility is determined only by its capital, however that the founder responsibility turned into personality and unlimited in the following cases: 1- At the assessment of the in- kind share value, the founder is responsible personally and unlimited to pay the difference between the actual and the estimated value; 2- When compensating the damages to the company itself or others as a result of violation the obligation of due care that must be accomplished by him during the establishment process; 3- If he was dissolute or suspend the activity of the company prior to its expiration date or accomplished its purpose. How to manage the one person company? The founder of the company has the right to be its manager, and he has all the authorities of the general assembly in the limited liabilities companies; however he has the right to appoint one manager or multiple managers complying with the limited liability companies' rules. The cessation of the one person limited company: The one person limited company may cessation in one of the following cases: 1- If it has lost the half of its capital, unless the founder decided to continue its activity; 2- The cassation of the juristic person the founder of the company; 3- Incapacity of the owner; 4- The death of the owner, except for the case of a solo successor, or if the heirs decided to proceeded it in its legal form, having six months from the date of death in order to rectifying the legal status of the company in complying with the applicable rules.
18-02-2020 Whether you are planning to settle abroad, or being already abroad while needing an Egyptian official document such as the birth certificate, marriage certificates, unmarried status declarations, diploma and university degree, these official documents must be legalized in order to be recognized in the destination country, legalization confirms that the seal and the signature on the document have been issued by the authorized public official. Most cases legalization process are so frustrated as the process differs depending on the type of the document, the concerned departments, and transforming the documents to and from the home country and deliver it back to the destination country, In order to not waste your time you will need a specialist who has the knowledge as well as the experience to get your papers ready on the time. Our specialized attorneys are ready to assist you whether you are individual or company to get your documents legalized. The following is a brief outline the main points regarding the legalization and authentication the documents in Egypt. Why the legalization is a must process in some cases for you? Legalization of foreign documents to be submitted it in Egypt: Any document issued abroad must legalize first in order to be submitted in Egypt. It has to be authenticated by the competent authorities of the issued country, before it can be legalized by the Egyptian Embassy. Legalization of Egyptian documents to submit abroad: Any document issued in Egypt must authenticate by the MOFA (the ministry of foreign affairs) in order to be legalized by the embassy- consult of the destination country in Egypt. What are the documents that can be authenticated or legalized in Egypt? 1. Certificates of civil status (Birth certificate, death certificate, Marriage certificate, unmarried status declaration); 2. Education certificates (school, university Degrees, diploma); 3. Experience and employment certificates; 4. Police clearance Certificate; 5. Commercial documents such as Articles of association, financial documents ; What are the Authorities that are involved in legalization process? There are different authorities that are involved in the process of authentication and legalization depending on the documents, mainly they are: 1- Civil authority; 2- Ministry of Education or notary in Egypt; 3- Ministry of Foreign Affairs in Egypt or an Apostille; 4- Embassy or Consulate in Egypt; 5- Ministry of foreign affairs of the destination country; Requirements in order to complete the legalization process: 1- Original certificate(s); 2- Passport copy; 3- Declaration form; 4- Power of Attorney (if required). Our specialized attorneys are ready to assist you whether you are individual or company to get your documents legalized; also we are offering a discount on bulk documents, for more information please contact us.
18-01-2020 The private as well as public Merger and acquisition (M&A) projects has a significant role in revitalizing the financial market, also it plays an important rule in reducing the effect of the monopolization, as well as protecting the competition in the market. The following is a brief outline the M&A rules according to the Egyptian laws and regulations; Governing laws & regulations: Public M&A transactions in Egypt are regulated basically by the capital market law No.95 of 1992 ,companies law No.159 of 1981 for their executive regulations as amended ,as well as the Egyptian exchange listing rules. Public M&A transactions: The structure of the public M&A transactions determine by some elements as the amount of the shares that are offered on the transaction, whether the company's shares are offered to the public or not, and the tax consideration. According to the executive regulations of the capital market law; 1- If the investor is willing to acquire more than 1/3 of the capital of the target company listed or not listed, that shares are offered to the public, then the investor must submit a mandatory tender offer addressed to all shareholders of the target company for the acquisition of up to 100% of the share capital of Target Company; 2- If the investor is willing to acquire less than 1/3 of the capital of the target company that shares are offered to the public, then it could be done by either the open market transactions or the tender offer. Exemption cases from conducting the mandatory tender offer: According to the executive regulation the investor may be exempt from submitting mandatory offer after getting the Financial Supervisory Authority (FSA) approval in some cases, such as the capital restricting among the related parties as stipulated in the executive regulation, the transfer of the pledged securities ownership to the bank according to the central Egyptian bank rules, the approval of all the shareholders of the target company, or the cases of reduction the capital by the retirement of treasury stocks. Restrictions ; 1- The price of the offer cannot be less than the maximum price paid by the bidder and/or related parties in a tender offer made during the preceding twelve months of the current offer; 2- In the case of the mandatory tender offer the price of the offer must be cash, and cannot be less than the maximum price paid by the bidder and/or related parties in a tender offer made during the preceding twelve months of the current offer; 3- The offeror cannot withdrawal his offer during its validity period, unless the intrinsic event took place and the prior approval of FSA is a must; 4- The offeror is prohibited from submitting another tender offer for a period of six months from the date of submitting the last mandatory offer unless he got the approval of the FSA. Private M&A transactions: Private M&A transactions have an essential role of the Egyptian financial market and having its great impact as a pricing adjustment mechanism. The applicable law; It's common in the practice to involve a foreign applicable law to be applied to the private M&A transactions; however it's always advisable to not include any provisions which are violating the mandatory rules applicable to the target company to guarantee a smooth running of the transaction. The conditions of the private M&A transactions; The conditions that applied to the private M&A transactions are left to be determined on each transaction depends on the amount of the potential acquired shares, the governmental approvals as well as the licensees, non-competition restrictions, employments contracts, tax rate, among others .