LIBYA Law and Practice Contributed by: Salaheddin El Busefi, Heba Gedwar and Mahmud Zahaf, Zahaf & Partners
board members, and determining divi - dends. (b) Extraordinary General Assembly: This assembly convenes for major decisions, such as amendments to the memoran - dum of association, capital increases or reductions, and mergers or dissolutions. • The Board of Directors: The board is appoint - ed by the shareholders, and is responsible for day-to-day management and strategic decision-making. Board resolutions require an absolute majority, unless the by-laws or memorandum of association set a higher threshold. Board members are prohibited from contracting with the company without prior shareholder approval. • The Supervisory Body: This independent committee oversees compliance with the law, monitors the company’s financial and admin - istrative conduct, and ensures the accuracy of accounting records and documentation. Disclosure requirements The Board must submit an annual report to the General Assembly at least seven days before the assembly meets. This report, signed by the Chairman, includes: • all compensation and benefits received by board members; • in-kind benefits and donations made by the company; and • a comprehensive summary of financial state - ments and operational performance Limited Liability Companies (LLCs) Main characteristics and governance LLCs are the most common corporate vehicle in Libya due to their flexibility and minimal capital requirements. They are well-suited for small and medium-sized enterprises and general commer - cial activities.
• Minimum Partners: Two • Maximum Partners: 25 • Minimum Share Capital: LYD3,000 • Liability: Liability is limited to each partner’s capital contribution. • Governance: In general, governance rules are less formal than for JSCs, but if the capital reaches LYD100,000, the governance rules of JSCs apply, including regarding the general assembly, board structure, and reporting obligations. Joint Ventures Main characteristics and governance Joint ventures are used by foreign investors seeking to operate in Libya through a partner - ship with a local partner. This structure is par - ticularly appropriate for infrastructure projects or sector-specific investments. • Foreign Ownership Cap: 49% (the Libyan partner must hold 51%) • Minimum Share Capital: LYD1,000,000 • Governance: They are subject to the same governance rules as joint stock companies, including regarding board management and shareholder oversight. Branches of Foreign Companies Main characteristics and governance Branches allow foreign companies to operate in Libya without incorporating a separate legal entity. This vehicle is typically used for service delivery, contracting, or technical projects. • Capital Requirement: LYD250,000 • Management: A branch manager and a deputy branch manager must be appointed, one of whom must be Libyan. • Governance: While the branch is not a sepa - rate legal entity, it must follow administra -
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