Limited Liability Company in Qatar Essay Example | Topics and Well Written Essays - 1500 words

Limited Liability Company in Qatar - Essay Example An LLC implies that the company has not more than fifty and not less than two partners (Commercial Companies Law, 2002). The partners are not answerable for anything other than their individual shares in the company’s capital and their shares do not represent transferable cheques. LLC is the most common form of business organisations in Qatar (â€Å"Business Setup in Qatar†, 2008). 1.1. Limitations and Rules Enforced on LLC Companies 1.1.1. Partners and shares Basically, LLCs do not have any issued shares (Silkenat, Aresty and Klosek, 2009). It is imperative that an LLC should have one or more partners who are Qatari nationals with not less than 51% share in the company capital. Moreover, it is not necessary that the profit share of the partners reflects their equity stake. Foreign companies that are wishing to establish a joint venture in Qatar with a Qatari partner generally opt for an LLC. As mentioned earlier, an LLC needs to have two to fifty shareholders or partne rs and the minimum capital to be raised for such a venture is QAR 200,000 (Silkenat, Aresty and Klosek, 2009). ... Moreover, transferable bonds and shares (negotiable shares) cannot be issued and around 10% of the annual net profits of the company should be retained within the company till the reserve capital is 50% of the share capital of the company (Silkenat, Aresty and Klosek, 2009). The company capital is to be divided into equal units of more than QAR 1000 each (Dew, Shoult and Wallace, 2002). It is illegal for LLC companies to offer banking and insurance services as well as advice about insurance and other such services to other parties. The profit percentage of LLC companies can be increased through means such as weighted dividend rights (Silkenat, Aresty and Klosek, 2009). 1.1.3. Tax liabilities LLCs in Qatar have to submit an annual tax return and are required to pay corporate income tax. They are liable to pay 10% of their profits made from Qatar. If their annual profits are more than QAR 100,000, they are required to declare this along with their audited financial statements issued by a registered auditor (â€Å"Business Setup in Qatar†, 2008). 1.1.4. Companies Law and requirements for setting up LLC The different types of companies in Qatar are ordained by the Companies Law (Commercial Companies Law no. 11 of 1981 (Dew, Shoult and Wallace, 2002). Partners establishing an LLC are required to sign and submit, in Arabic, the Memorandum and Articles of Association to Qatar’s Ministry of Economy and Commerce (Wolters Kluwer TAA, 2013). The name of the company has to be approved by the Ministry of Economy and Commerce in Doha and the minimum stipulated capital also has to be deposited at a bank in Qatar (â€Å"Business Setup in Qatar†, 2008). 2. Qatari Laws on LLCs 2.1. Ownership Interest of Shareholders in an LLC As per