BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
the date of the second meeting. The third meeting shall be valid if attended by one-quarter of the share- holders. A new invitation is not required to be sent for the last two meetings if their dates have been speci - fied in the invitation to the first meeting, provided that publication is made in at least two daily local news - papers – one in Arabic and the other in English – to the effect that none of these meetings have occurred. Decisions The decision of the extraordinary general meeting shall be passed by a two-thirds majority of the shares rep - resented at the meeting, unless the decision relates to (i) an the increase or decrease in the company’s capi - tal; (ii) extension of the company’s term; or (iii) disso - lution, conversion or merging with another company, in which case it shall not be valid unless passed by a three-quarters majority of the shares present at the meeting. The extraordinary general meeting’s deci - sions shall become effective upon the approval of the Ministry of Industry and Commerce. Other In addition to the foregoing, the founders shall invite the constituent assembly to convene within a period no later than 21 days from the date of the closing of the subscription (in case of public joint stock compa - ny) and seven days from the date of the incorporation approval by the Ministry of Industry and Commerce (in case of closed joint stock company). The invitation to convene the constituent assembly of shareholders shall be published in at least two daily local newspapers – one in Arabic and the other in English. The minimum notice period is 21 days, and the notice shall include the agenda of the meeting. Copies of the invitation documents shall be forwarded to the Ministry at least ten days before the meeting. 4.4 Shareholder Claims The bases of claim that exist for shareholders against the company are as follows: • a shareholder may lodge a claim seeking to nullify a decision by the general meeting if such decision is not issued in accordance with the law and the Constitutional Documents of the company;
• pursuant to Article 168 bis of the CCL, a share - holder may lodge a claim against the company if its business is being conducted in a manner that unfairly causes damage to all shareholders or a group of shareholders, or if the company intends to take an action that causes damage to all share - holders or a group of shareholders; and • pursuant to Article 18 bis of the CCL. The manager of the company, or a member of the board of directors or board of managers of a joint stock company, closed joint stock company or lim - ited liability company, as well as the person in charge of the actual management of the company – whether overtly or covertly – shall be liable in all his or her personal assets for any damage to the company, partners, shareholders or third parties if the evidence establishes that he or she has caused the company to incur obligations due to gross negligence or error on his or her part – or to his or her violation of the law, or of the company’s memorandum or articles of association. 4.5 Shareholders in Publicly Traded Companies Any person whose ownership in a publicly traded company, alone or together with their minor children, through accounts under their disposal or associated or affiliated companies, amounts to 5% or more of any listed security of a joint stock company must notify the licensed exchange (Bahrain Bourse) forthwith, which shall in turn notify the CBB of this fact. The CBB may declare the name of the person who owns such stake. All persons must obtain prior written approval from the CBB to execute any order that will bring their owner - ship, alone or together with their minor children, or through the accounts under their disposal, to 10% or more in any listed security. Any further increase of 1% or more shall also require prior written approval from the CBB. Companies are further required to disclose ultimate beneficial owner (UBO) information to the Ministry of Industry and Commerce. The 5% notification rule is a market disclosure obliga - tion, not a UBO rule. It requires “any Person” to notify
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