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

Bankruptcy of Companies in Qatar - Assignment guinea pigDespite this, there is a well laid-down framework 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 good regime in Qatar resembles the one that governs bankruptcy and insolvency in the united Arab Emirates. The only difference is that the Qatar regime lacks the provision that gives sh atomic number 18holders, with more than 25 per penny of the confederacys shares, the right to declare the union bankrupt. This is usually a provision when a company 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 co mpany. Failure to institute a dissolution procedure makes the directors only if 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 expiry of the term of the company as noted in the constitution of the company. A merger between two companies may excessively 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 opposition in order for the shareholders to make a decisiveness on whether to dissolve the company. In cases where the board fails to convene th e general meeting or where the general manufacture fails to reach a general solution pertaining to the dissolution of the company, any interested shareholder may instill 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 integral 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 incarnate to the companys name. It is worth noting that the Companies Law onl y stipulates the general guidelines that should govern the liquidation process. It does not drop out a formal dissolution