EGYPT Law and Practice Contributed by: Mohamed Hashish, Heba El Abd and Mariam Rabie, Soliman, Hashish & Partners
documents and information, including, inter alia, a memorandum which requires, inter alia, information on agreements or understandings relating to the pur - chase offer to which the bidder is a party or of which it is aware, and descriptions of the parties to such agreements or understandings. It is also worth noting that if a transaction is deemed an economic concentration notifiable to the ECA, the notification form to be submitted to the ECA requires, inter alia, a copy of all transaction documents. There are two main categories of private company in Egypt: partnerships and corporations. There are two types of partnerships: (i) general partnership (GP) and (ii) limited partnership (LP). However, corporations are classified into the following four types: (i) JSC, (ii) LLC, (iii) one-person company (OPC) and (iv) partnership limited by shares. This being said, the two most common types of com - pany provided under the Companies Law are (i) the JSC, the capital of which is divided into shares owned by its shareholders, and which is managed by at least three board members, and (ii) the LLC, the capital of which is divided into quotas owned by quota-holders, and which is managed by at least one manager. It is worth noting that noting that the articles of incorpora - tion of a JSC may provide for minimum representation of the shareholders on the board of directors. 8. Duties of Directors 8.1 Principal Directors’ Duties It is worth noting that Egyptian law does not recog - nise the concept of the stakeholders in the companies in Egypt. In this regard, the members of the board of directors/managers have all the powers related to the management of the company and undertake all necessary actions to achieve its purpose, except for those actions or transactions specifically excluded by law or the company’s by-laws that fall within the juris - diction of the general assembly which is represented by the shareholders or quota-holders of the company, as the case may be.
This being said, the board of directors or managers of the company answer to the general assembly of the company, given that the general assembly has the authority to oppose any management actions, to approve any actions taken by the board of directors or managers, or to issue recommendations concerning the actions that fall within their jurisdiction. Further - more, the board of directors is required to prepare a report on the company’s activity throughout the year, to be referred to and approved by the general assem - bly. Furthermore, every shareholder has the right to attend the general assembly meetings, having the right to discuss the matters on the agenda and to cross-ques - tion the board of directors, accordingly, noting that the shareholders may present whatever questions before the general assembly convenes by at least three days, and the board of directors should respond to these enquiries and cross-questions to the extent that would be prejudicial to the company’s interests. 8.2 Special or Ad Hoc Committees The board of directors may form one or more inde - pendent committees that consist of the board’s non- executive and independent members, such that each committee is assigned with specific tasks for a period of time. The competent regulator in Egypt has issued circular book No 21 of 2019 regulating the formation of board committees, whereby each committee must consist of at least three members. Committees may be merged depending on the nature of the company’s activity and its needs. The board committees shall refer their reports to the board of directors for the board of directors to take the necessary resolutions. It is worth noting that the Companies Law requires that every board member/manager who has a conflict of interest with the company must inform the board of it and record the same in the relevant minutes of the board meeting. In such a case, the conflicted board member is not permitted to participate in the vote regarding any decision relating to this matter. Further - more, the board of directors must inform the general assembly of the aforementioned matter before it votes on such decisions.
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