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Thursday , September 23 2021

Adoption of amendments on the Companies Law receives plaudits

Call on ministry to continue to reform all existing trade laws

KUWAIT CITY, June 27: The economic and legal circles have praised the amendments adopted by the National Assembly on the Companies Law, which are expected to reflect positively on Kuwait’s ranking in the Business Environment Index issued by the World Bank Group, reports Al-Rai daily.

The economists saw the amendments to the law as part of the index of improving the local business environment, as well as increasing the regulatory efficiency of ‘trade’ in protecting the rights of small shareholders. They have called on the Ministry to continue to reform all existing trade laws, the economic environment in recent years and the development of new legal projects that will make the business environment more attractive to both local and foreign investors and businesses.

“The amendment is limited to corporate law in three key areas: reducing the required percentage of the General Assembly for limited liability companies from 25 to at least 10 percent, and setting a legal period for the distribution of profits of companies a month after they were open and not distributed at the time and, finally, an increase in the duration of the General Assembly from 15 days to 21 days.

Dr Mohammad Al-Wasmi, a faculty member at Kuwait University’s Faculty of Law, considered the amendments to the Companies Law as a right step taken by Minister Khaled Al-Roudhan to improve the local business environment and raise Kuwait’s ranking in the Competitiveness Index. To attract investors, and make Kuwait a financial and commercial center, Al-Wasmi pointed out that reducing the required percentage to request a general assembly of companies with limited liability to 10% gives partners a greater margin in exercising their rights when requesting the general assembly, discussing the situation of their companies and accounting their administrations. He pointed out that the previous percentage required for the convening of the General Assembly of these companies has always been impossible in many cases that required the cessation of partners, before doubling errors and losses resulting from the continuation of some departments, noting that the previous ratio led to the opening of a gap of some departments and violated the rights of some partners.

As for the increase in the duration of the General Assembly from 15 days to 21 days, Al-Wasmi said this gives the members of the General Assembly and the shareholders the opportunity to prepare for the General Assembly by reviewing their budgets and discussing them well and thus raising their ability, especially the small shareholders with a mindset familiar with every detail.

On the other hand, officials in some companies confirmed that the adjustment is consistent with the guidance of the World Bank and classifies best business practices, as it gives a good opportunity for shareholders, explaining that such changes come to complement the efforts of the Ministry in improving the business environment. At the same time, the promotion and support of the economic development of Kuwait still requires a lot of corrective action, and address the challenges that hinder the dedication of governance and transparency procedures

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