The General Authority for Investment and Free Zones (GAFI) said that the regulation for transferring the partners’ shares in limited liability companies in the investment law were adjusted.
According to the new adjustments, the contract shall either include the authentication of the signatures from the competent real estate registration office, or by any other legal means, or through providing proof that the transfer of the partners’ shares was registered in the company’s records.
On Monday, the GAFI assured its keenness on protecting the shareholders’ and partners’ interests through a recall to clarify the authority’s periodic book number 16 which regulates the transfers of partners’ shares in limited liability companies.
It also added that the application of informal contracts leads to illegal conditions arising, due to selling partners’ shares to more than one person, as well as acquiring shares in companies whose ownership is limited.
According to Article 18 of the corporations law No. 159 of 1981, limited liability companies’ shares could be sold in virtue of an authentic deed or by an act through which the signatures are legalised, unless the company’s founding law specifies a different process.
The periodic book added more restrictions to abolish the idea of informal contracts in transferring the shares in limited liability companies, and that shareholders have to inform the GAFI within three months.
Ahmed Mashhour, a corporate expert, told Daily News Egypt that if the contracts of a limited liability company were informal, shareholders did not have to inform the GAFI when selling their shares, as long as they did not need to increase the company’s capital.
Mashhour added that one of the important things in the periodic book is that the shareholders have to notify the authority within three months after transferring the shares, thereby restricting shareholders to be in contact with the GAFI.