Companies Law No. 22 of 1997, as amended

Companies Law No. 22 of 1997, as amended, is the legislative framework governing the incorporation, registration, management, and supervision of companies in the Hashemite Kingdom of Jordan. The Law regulates the legal stages through which a company passes, beginning with its incorporation and registration, moving through the conduct of its business, the regulation of its financial affairs and the making of amendments to it, and ending with its conversion, merger, liquidation or deregistration.

The provisions of the Law apply to companies engaged in commercial business and to the matters its provisions address. Where the Law contains no provision governing a particular matter, reference is made to the Commercial Law, then to the Civil Code, then to commercial custom, guided by judicial precedent, legal doctrine and the principles of justice.

Every company incorporated and registered in accordance with the provisions of the Law is deemed a legal person of Jordanian nationality, with its head office in the Kingdom. The Law also sets out the powers of the Minister of Industry, Trade and Supply, the Controller General of Companies and the Companies Control Department in registering companies and monitoring their compliance with its provisions.

The Law regulates the procedures for incorporating and registering companies with the Companies Control Department and specifies the information and documents that must be submitted, including the company’s name, objectives, head office, duration and capital, and the names of its founders, together with the memorandum of association and the articles of association in the cases where the Law requires them.

The Law also addresses impediments to registration and objections to it, the issuance of the company’s certificate of registration, the publication of its registration, and amendments to its particulars and documents. It permits the use of electronic means for submitting applications and documents, issuing certificates and convening company meetings, in accordance with the applicable provisions and instructions.

The Law specifies the types of companies that may be registered in the Kingdom: the general partnership, the limited partnership, the limited liability company, the venture capital company, the private shareholding company, and the public shareholding company.

For each of these types, the Law lays down specific provisions governing the manner of its incorporation, the number of its partners or shareholders, its capital, its management, and the limits of the partners’ or shareholders’ liability for its debts and obligations.

The Law also contains provisions specific to civil companies, non-profit companies, holding companies, mutual investment companies, exempt companies, and foreign companies, whether operating or non-operating in the Kingdom. It further regulates the joint venture as a commercial company that has no legal personality and is not subject to registration and licensing procedures.

The Law regulates the management of a company according to its legal form and specifies the powers of the manager, the board of managers or the board of directors, and the means by which the company is represented and signed for. It also sets out how meetings of partners or general assemblies are convened, the legal quorum required for them to be held, and the mechanisms for voting, taking decisions and documenting them.

The Law addresses the rights and obligations of partners and shareholders, their right to access information and documents, to take part in decision-making, and to receive profits in accordance with its provisions. It also determines the extent of their liability for the company’s obligations, which varies with the type of company and the nature of the partner’s or shareholder’s position in it.

The Law contains the provisions relating to a company’s capital, the partners’ interests and the shareholders’ shares, the methods of paying up the capital, its increase or reduction, and the transfer and disposition of interests and shares, in accordance with the provisions established for each type of company.

It also regulates the preparation of the company’s accounts, financial statements and annual reports, the distribution of profits and the treatment of losses, and the keeping of records and documents. It further addresses the appointment of auditors and the determination of their duties and responsibilities, so as to strengthen the integrity of financial statements and the oversight of the company’s business.

The Law regulates amendments arising after a company’s registration, including amendment of the memorandum of association or the articles of association, and changes to the name, objectives, capital, management or authorized signatories, in accordance with the prescribed legal procedures.

The Law also sets out the provisions governing the conversion of a company from one legal form to another and the legal effects arising from it, and regulates mergers and acquisitions, the procedures for approval, registration and publication, and the protection of the rights of partners, shareholders and creditors.

The Law specifies the cases in which a company expires, is dissolved or is deregistered, and regulates voluntary and compulsory liquidation procedures in accordance with the provisions applicable to each type of company.

These provisions cover the appointment of the liquidator and the determination of the liquidator’s powers and responsibilities, the inventory of the company’s funds and assets, the settlement of creditors’ rights, the collection of amounts due to the company, the preparation of the final liquidation accounts, the distribution of any remaining funds, and the completion of the procedures for dissolving the company or deregistering it.

The Law grants the Controller General of Companies and the Companies Control Department the powers to follow up on companies and verify their compliance with its provisions, to request information and documents, to monitor filings and legal and financial amendments, and to take the measures necessary to rectify the position of companies in violation.

The Law also requires companies to maintain a beneficial ownership register and to disclose and update its data in accordance with its provisions and the instructions issued pursuant to it. The Law sets out the violations, penalties and legal measures that apply where its provisions are breached or where the required information and documents are not submitted.

For the detailed provisions, reference may be made to the full text of Companies Law No. 22 of 1997, as amended, together with the regulations, instructions and decisions issued pursuant to it.