Question

Rami (Lebanese), Karim (Lebanese), Rania (Kuwaiti) Louis (French) and Hiba
(Jordanian) wish to incorporate a Joint Stock Company as per the distribution
of the shares as follows: Rami 51%, Karim 15%, Rania 5%, Louis 19% and Hiba
10%.
They named in the statutes Rami, Rania, louis and Hiba as Board of Directors for six (6)
years. Is the constitution of the Board valid as per the commercial rules?
Three years after the constitution of the Joint Stock Company, the accounts of the
company showed losses amounting to 85% of the capital.
What is the adequate decision to be taken by the shareholders noting that they do not
have any source of funds?
The invitation for the meeting was duly sent to the shareholders and only Hiba, Rania
and Rami attended to the meeting. The commercial register refused to register the
minutes of that meeting: Why? Explain

Answer 1

The Constitution is not valid as per the commercial rules. The members of the Board can be elected for a maximum of Four(4) years. However, the persons can be relected for unlimited number of times.

The adequate decision to be taken is the winding up of the company so that the remaining 15% of the capital can be saved from dilution. However, the strategy for Mergers and Acquisitions can also be developed if any such offer is received and found viable.

The Commercial Register refused to register the minutes of the meeting as the Quorum of the meeting was not met as per the commercial rules.At least half of the shareholders should attend the meeting to form quorum.