Bankruptcy of Companies in Qatar Assignment Example | Topics and Well Written Essays - 1250 words

Bankruptcy of Companies in Qatar - Assignment ExampleDespite this, there is a well laid-down model that governs the insolvency and subsequent liquidation of companies in Qatar. These rules and regulations mainly anchor on Chapter 10 of the Qatar Commercial Companies Law, Law No.5 of 2002. This legal regime in Qatar resembles the one that governs bankruptcy and insolvency in the United Arab Emirates. The only battle is that the Qatar regime lacks the provision that gives shareholders, with more(prenominal) than 25 per cent of the lodges shares, the right to declare the smart set bankrupt. This is usually a provision when a comp whatever suffers capital losses amounting to more than 75 per cent of its capital turnover. Instead, the provisions of Article 290 of the Qatari Code stipulate that if a limited liability company suffers losses amounting to equivalent of 50 per cent of the companys capital, the directors of the company are expected to consider dissolving the company. Fail ure to institute a dissolving procedure makes the directors solely responsible for any further losses that may accrue from the companys failure, to meet its legal obligations. According to (Latham & Watkins 2011), the legal framework that governs the application for dissolution of a company in Qatar still resembles that of the United Arab Emirates. ... There may be other circumstances such as the resultant of the verge of the company as noted in the constitution of the company. A merger between two companies may also require the liquidation of the companies as per the constitutional terms. Dissolution due to bankruptcy materializes when a company incurs losses amounting to more than 50 per cent of the companys financial capital. In such circumstances, the company directors are required to convene an extraordinary general meeting in order for the shareholders to make a determination on whether to dissolve the company. In cases where the board fails to convene the general meeting o r where the general assembly fails to reach a general resolution pertaining to the dissolution of the company, any interested shareholder may initiate legal proceedings for the dissolution of the company as stipulated in Article 285 of the Companys Law. The meeting of the general assembly is at liberty to dissolve the company if a majority of the shareholders support the resolution to dissolve the company. Similarly, dissolution may be initiated by any shareholder with more than 25 per cent of the companys shareholding. However, this only applies when the company returns a loss amounting to more than 75 per cent of its total financial capital for any given financial year. This framework is anchored on Article 289 of the Companies Law. When the liquidation of a company gets approved by the required majority, the dissolution process commences immediately and the term liquidation is incorporated to the companys name. It is worth noting that the Companies Law only stipulates the general guidelines that should govern the liquidation process. It does not lay out a perfunctory dissolution