Establishing joint stock companies in Egypt

Establishing joint stock companies in Egypt in general, it is in itself a private company that aims to profit divided into several equal shares, and the profit is distributed according to the divided shares of the company from the beginning, those shares are owned by those who participate in the company (shareholders) and each shareholder has a certain share of shares that are determined through ownership certificates, and shareholders have the right to sell and buy the company's shares without affecting the continuity of its existence, as joint stock companies are considered one of the most companies We have been present in Egypt during the recent period, and accordingly, we review everything that you need to know about the establishment of joint stock companies in Egypt in accordance with the provisions of the Companies Law No. 159 of 1981.

Joint stock companies in Egypt, as an economic entity of a special nature, are distinguished by unique characteristics from other types of companies, including:

1. The company's dependence on financial consideration, not personal, as its owner (owner) is seen as a group of shares or a legal representative and not as a specific person, unlike companies of persons, and the advantage of this feature is to ensure the continuity of the company even in the event of the death of a shareholder or his exposure to financial bankruptcy, which is one of the foundations that must be known when establishing a joint stock company in Egypt.

2. When establishing a joint stock company in Egypt, it is necessary to know the ability of shareholders to exchange their shares in joint stock companies without any restrictions and they are traded on the stock market or stock exchange.

3. Dividing the company's debts among the shareholders according to their share ratio, where the indebtedness does not exceed the percentage of shares owned only in the joint stock company .

4. Preference for some activities such as banks, investment and insurance companies, stock exchange business, real estate loans, credit and savings institutions to be established by certain joint stock companies without other types of companies.

This law pronounces on joint stock companies, limited partnership companies and limited liability companies based in the Arab Republic of Egypt, as Law 159 of 1981 clarified the conditions for establishing joint stock companies in detail, which are as follows:

1. The number of founders must not be less than three partners as a minimum when establishing joint stock companies in Egypt, and the number of partners may not be less than two in limited partnership companies by shares or in limited liability companies, otherwise the company becomes outside this law.

2. All partners must write a memorandum of association of joint stock companies in Egypt, which includes all the responsibilities resulting from the establishment of the company, and the founders shall be jointly liable for what they acknowledged in the memorandum of association.

3. Any decision that occurred between a joint stock company in Egypt and its founders shall not be adopted without the approval of the board of directors of joint stock companies or the general assembly of the company that was previously appointed by election between the partners and some of them.

4. If the founders follow all the previous conditions, the approval of the application for a license to establish joint stock companies is guaranteed, either in the event of rejection of incorporation due to the fault of its founders or negligence of those conditions, each founder may recover the material amount paid in the purchase of his share of shares.

There are a number of papers necessary in order to establish joint stock companies in Egypt so that your company enjoys all the privileges and legal rights, and these procedures include the following :

1. The establishment of joint stock companies in Egypt requires the issuance of powers of attorney from the founding partners to the founders' agent, and the presence of a power of attorney for the subscriber partners + copies of partners' cards or copies of foreigners' passports is not required.

2. Work (Certificate of Unambiguity )

3. Security inquiry in case of foreign shareholders or a foreign company.

4. Coding the shareholders in a bank or one of the securities companies and then issuing a temporary certificate from MCDR for Central Registration and Custody to prove the deposit of the company's securities therein.

5. Make a bank certificate and deposit at least 10% of the company's total issued capital in one of the Egyptian banks approved by the Central Bank.

6. Attach the receipt of payment of the company's fees, which amount to 1 thousandth of the capital value.

7. If one of the shareholders and members of the board of directors is a public or government employee or a chartered accountant, the approval of the entity in which he works or the register of accountants must be obtained before establishing joint stock companies.

8.

Despite the large number of shareholders, the process of managing the company, which includes shareholders, is carried out through a board of directors elected by the company's general assembly, which is one of the foundations for establishing joint stock companies in Egypt, and the selection is made through an annual meeting (at the end of the fiscal year) in which the members of the board of directors are selected based on the largest number of votes obtained by the candidate, and in the event that two candidates obtain the same number of votes, a second vote is taken between them or the best is chosen in them according to the system. Basic for joint stock companies.

After the end of the incorporation process, which is the last step in the process of establishing joint stock companies, and it is the stage in which you announce who are your partners and what is the service provided by the company, and the tax card and the commercial register under which the legal personality of the company is born, and the company's memorandum of association is a joint-stock company, which serves as a document signed by the founders' agent of the joint stock company and the contract mentions the names of the founders only as the parties to the contract, and it contains six main articles after mentioning the contract between and following Names of the founding partners } Article I: (Name of the joint stock company), Article II: (Purpose of the company), Article III: (The company's headquarters), Article IV: (Duration of partnership), Article V: (The material amount of the joint stock company, the number of shares and its value ), Article VI: (A detailed statement of the distributions of shares to shareholders){. Then comes the basic system, which is a microcosm of Law 159 of 1981, which determines the rights of shareholders and their obligations, the relationship between them and the relationship with others, the formation of the board of directors, its competence and responsibilities, the method of inviting ordinary and extraordinary assemblies, the percentage of voting, the validity of the meeting, the competencies of both assemblies, preparing the budget, proving profits and losses, how to distribute profits, the method and time of their distribution, the liquidation of the company, whether consensual or judicial, and the appointment of an observer Accounts and legal advisor of the company, did I not tell you, my dear, that the company's articles of association (its constitution) are a microcosm of Law 159 of 1981.

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