Lebanese Code of Commerce - Guide to Amendments - 2019

Lebanese Code of Commerce
Amendments of Law no. 126
Published April 1st, 2019
Guide
This table compares between the articles of the Code of Commerce as they currently are and the amendments introduced by law no.
126. Where applicable, only the changes are reflected, and not the full articles.
Prepared by Frederic Chemaly frederic@ccny.co mob: +961 70384466

Article Topic
Current law
Legislative decree no. 304 dated 24/12/1942
Amendments
Law no. 126 date published 1/4/2019
Entry into force: 1/7/2019
Art 16 Company records
The current article requires records of the transactions of the
company to be kept.
The new law permits said records to be held physically or through a secure digital application;
The digital application becomes mandatory for all traders having a VAT number 2 years from the
promulgation of the law.
Art 26 Company registration Board members or managers register the company.
The legal representative registers the company;
Added the obligation to submit the proof of residency/domiciliation of the company (ownership of
premises, rental, domiciliation at the legal representative, or any other document), and the identity of the
economic rights holders.
Art 42 Number of shareholders
Should the number of shareholders become less than the legal requirement, the remaining shareholders
should announce the liquidation within 3 months if no corrective measure has been taken.
Art 43 Company head office
All companies registered in Lebanon should have a head office in Lebanon, and shall be considered
Lebanese companies.
Art 45
Form of company and
liability
Changing the form of a company does not create a new legal entity;
A new legal identity is opposable after registration and one month from publication;
Persons having performed transactions while setting up a company are personally and jointly responsible
for these transactions unless the company accepts the transfer of transactions to its books.
Art 78
Company head office
(JSC - SAL)
All joint stock companies established in Lebanon should have a
headquarters in Lebanon.
while the new amendment dismisses this requirement, it stresses on the necessity of having 30% of
companies operating a public utility held by Lebanese nationals, said 30% may only be transferable to
Lebanese nationals.
Art 81
Capital subscription (JSC -
SAL)
Adding to the published invitation for capital subscription the following mentions: names of shareholders,
value of contributions in kind, conditions of dividends if available.
Art 82 Fines (JSC - SAL) Fines are LBP 500-1,000. Fines have become LBP 2,000,000-10,000,000.
Art 84 Share price (JSC - SAL) Minimum price of share or part of share is LBP 1,000. Minimum price of share is LBP 1,000, not mention of parts of shares.
Art 85 Registration (JSC - SAL)
Amounts paid for capital subscription should be deposited in an
acceptable bank.
Amounts paid for capital subscription should be deposited in a bank operating in Lebanon;
Founders may cancel the registration within 6 months from deposit of bylaws at the notary public, subject
to some formalities.
Art 86
Valuation of
contributions in kind (JSC
- SAL)
The new law cancelled the requirement to appoint an expert in valuation from a list of experts accepted
officially by the court.
Art 94
Illegal setup of company
(JSC - SAL)
Every stakeholder may give notice of the flaw to the company
within 5 years from incorporation.
Every person having capacity or interest may give notice to the company of the existence of a flaw within
5 years from the date of said flaw.
Art 95
Nullity of Company (JSC -
SAL)
Plaintiff shall prove the causality between the flaw in
incorporation and the damage.
The new law dismissed the obligation to prove the causality for the plaintiff.
Art 96 Fines (JSC - SAL) Fines are LBP 500-5,000. Fines have become LBP 2,000,000-20,000,000.
Art 98
Publication of company
upon incorporation (JSC -
SAL)
The new law adds a condition that publication of the company should happen 1 month from
incorporation, subject to fines (LBP 500,000-1,000,000).
Prepared by Frederic Chemaly frederic@ccny.co | mob: +961 70384466 Page 1 of 12

Article Topic
Current law
Amendments
Art 100
Electronic publication
(JSC - SAL)
The name, the form of company, the capital and the paid capital shall be added to the company's
electronic documents too.
Art 101
Annual disclosures (JSC -
SAL)
Companies shall publish their financial statements, board
members names and external auditors annually in the official
gazette and 2 newspapers.
Companies shall deposit at the commercial registry the audited consolidated and standalone financial
statements, the auditors reports, and others, within 2 months of their issuance and within maximum the
following year of the financial year in cause;
Publication may be done online as decreed by the Minister of Justice, subject to become publishable on
the commercial registry website within 2 years of this law.
Art 102
Statutory filings (JSC -
SAL)
Updated the fine of not filing a document in due time to LBP 100,000;
Cancelled the requirement of a clearance from the NSSF to be able to file.
Art 104 Shares (JSC - SAL) Nominative or bearer. Only nominative.
Art 108
Fictitious Dividends
Distribution (JSC - SAL)
Lawsuit to recover the fictitious distribution of dividends may be
done by the company or its lenders.
Lawsuit to recover the fictitious distribution of dividends may be done by the company, its shareholders
or its lenders.
Art 109
Distributed fixed
interests (JSC - SAL)
Fixed interests paid to shareholders are not considered fictitious
earnings. The interest should be max 4%, the application is 5
years, and the interest should be considered part of the setup
costs.
The new law removed the condition that it should be considered setup costs.
Art 116
Shares and related rights
(JSC - SAL)
The company notified of the existence of usufruct rights on specific shares has the obligation to notify the
holder of said right of all matters;
The owner of usufruct attends and votes during ordinary general assemblies, while the owner of bare
ownership attends and votes during the extraordinary general assemblies;
The bare owner is the entitled person to all notices;
The bare owner and usufruct owner may sign a contract disagreeing with the legal rules, so long as the
contract is noticed to the company and published in the commercial register;
Joint owners may agree to nominate a representative. In the event they do not agree, the court may
appoint a representative.
Art 117
Shares and related rights
(JSC - SAL)
Extraordinary general assemblies may cancel the right of double vote related to 1 share;
Double vote as per art 117 is not applicable to companies incorporated after this law.
Art 118
Transfer of shares and
rights of first refusal (JSC
- SAL)
Removal of the prohibition of free transfer of shares from the board members, holders of guarantee
shares;
The bare owner of shares is solely entitled to purchase shares with priority rights;
Listed companies may purchase from their free reserves their own shares, subject to a ceiling of shares
set by the Capital Markets Authority regulations.
Art 119
Share price payment (JSC
- SAL)
The shareholder who hasn’t paid the price of the shares has to
do so when invited by the company.
The shareholder who hasn’t paid the price of the shares, has to do so when invited by the board of
directors. He has to pay fully or partially, and according the procedure set by the board.
Art 120
Rights of previous
shareholders (JSC - SAL)
The new law added the right of recourse of the previous shareholders against the new shareholders who
acquired their shares.

Article Topic
Current law
Amendments
Art 121
Resale of unpaid shares
by company (JSC - SAL)
The company may sell the shares that were not paid and incur
costs and losses on the shareholders who didn’t pay.
Additionally, the shareholder who did not pay is jointly responsible with the shareholders who owned
before him the shares. Said previous owners are jointly responsible for 2 years;
In the event of a bare ownership and usufruct, the bare owner shall pay the price of the share, unless
convened otherwise.
Art 121 bis 1
Preferred shares (JSC -
SAL)
New articles, a summary is made.
Companies may issue preferred shares that have all right as normal shares, except to voting rights, board
memberships and equity rights.
Art 121 bis 2
Preferred shares
issuance (JSC - SAL)
Preferred shares are issued on incorporation or on capital increase;
Art 8 on convertible bonds + art 112 and 113 are not applicable to preferred shares, unless stipulated in
the bylaws or resolved in an extraordinary general assembly
Art 121 bis 3
Preferred shares ceiling
(JSC - SAL)
New articles, a summary is made. Preferred shares can constitute a maximum of 30% of the total nominative shares.
Art 121 bis 4
Preferred shares regime
(JSC - SAL)
The bylaws or extraordinary general assembly define the privileges and benefits of the preferred shares;
Dividends are distributed to holders of preferred shares fully if sufficient, otherwise pro rata;
New issuances of preferred shares may not deprive holders of previous issuances or convertible bonds,
unless approved by the related assemblies of said issuances.
Art 121 bis 5
Preferred shares voting
rights (JSC - SAL)
Holders of preferred shares acquire normal voting rights if:
Dividends were not paid despite their availability;
The company failed to provide or safeguard the rights related to the preferred shares;
In general assemblies resolving on material changes to the company.
Art 121 bis 6
Preferred shares special
assemblies (JSC - SAL)
A special assembly is created for holders of each series of preferred shares, with a regime similar to the
assemblies for convertible bonds;
Said assemblies may produce opinions on matters of interest to the general assembly;
Said assemblies may delegate a representative to the general assemblies to attend and produce opinions,
without voting rights.
Art 121 bis 7
Exclusions from
ownership of preferred
shares (JSC - SAL)
Board members, general managers and assistant general managers, their wives and minor children are
prohibited from owning preferred shares, directly or indirectly.
Art 121 bis 8
Preferred shares and
capital increase (JSC -
SAL)
In the event of capital increase, the holders of preferred shares have no priority right for subscription or
may not benefit from it, unless resolved otherwise by the company: bylaws or extraordinary general
assembly resolution.
Art 121 bis 9
capital decrease (JSC -
SAL)
The company may not recover its capital from the moment it issues preferred shares and as long as they
are in force;
In the event of capital decrease not resulting from losses, the holders of preferred shares shall in priority
be paid their full dividends in addition to the value of their shares before cancellation, and as per the
procedure set in the article.

Article Topic
Current law
Amendments
Art 121 bis
10
Company purchase of
preferred shares (JSC -
SAL)
The company may buy preferred shares if:
Stipulated in the bylaws or resolved by the extraordinary general assembly;
After all dividends of preferred shares have been paid.
Art 121 bis
11
company liquidation (JSC
- SAL)
On liquidation of the company, the nominative value of the share in addition to the unpaid dividend shall
be paid in priority to the normal shares. they may be paid as well from the results of the liquidation.
Art 121 bis
12
Preferred shares
conversions (JSC - SAL)
Preferred shares may be converted to normal shares by resolution of the extraordinary general assembly
and based on a special report by the external auditors.
Art 124 Bonds (JSC - SAL) Issuance of bonds is based on last approved budget.
Issuance of bonds is based on last audited financial statement, not older than 6 months and approved by
the general assembly.
Art 144
Board composition (JSC -
SAL)
Notwithstanding specific company stipulations, the majority of
Board members should be Lebanese.
Notwithstanding specific company stipulations, minimum 3 Board members should be Lebanese;
If the chairman is a non-Lebanese and non-resident, he does not need a work permit.
Art 146
SAL)
The bare owner is the person entitled to be a board member, unless agreed otherwise by bare owner and
usufruct owner;
Joint owners may be represented by one representative at the Board.
Art 147
SAL)
The general assembly appoints board members owning a
minimum number of shares. Such shares are nominative and
non transferable.
The general assembly appoints board members, whether shareholders or not.
Art 148
Board appointment
exclusions (JSC - SAL)
The article defines the misdemeanors and felonies that obstruct
a person from being a board member.
The new articles omits the definitions.
Art 152
Board composition and
publication (JSC - SAL)
Any change to the board shall be published in the commercial
registry
Additionally, the notice of resignation of a board member shall be registered, and in all cases, registration
does not required additional documents.
Art 153
Chairman - general
manager split (JSC - SAL)
The chairman performs the general manager duties. Should the
chairman wish to delegate his/her duties to an appointed
general manager, said general manager performs his/her duties
on the personal liability of the chairman.
The bylaws of a company may permit the split. The general manager consequently can be nominated by
the board, and no liability of the chairman is mentioned;
The general manager may request the appointment of an Assistant general manager from outside the
board, at the personal liability of the person who proposed his/her appointment.
Art 154
Board members number
of mandates (JSC - SAL)
Chairman in maximum 4 companies, as long as general manager
in minimum 2 of the 4;
Board member in maximum 6 Lebanese companies, reduced to
4 if age is above 70.
Chairman in maximum 6 companies, as long as general manager or assistant general manager in
maximum 3 out of 6;
Physical person can be board member in 8 companies maximum;
Any stakeholder may give notice of a breach to the person having committed it and to the company and
rectification should be done within 2 months, otherwise the mandate is cancelled.
Art 155
chairman as a merchant
(JSC - SAL)
Defines the conditions where a chairman is considered a
merchant.
Adds the general manager to this definition.

Article Topic
Current law
Amendments
Art 156
Board quorum, majority
and remote attendance
(JSC - SAL)
Quorum to the Board is 50%.
Quorum to the Board is 50%;
It may be stipulated in the bylaws that attendance may be remote through audiovisual technologies, as
defined by the Minister of Justice, so long as the telecommunication means is reliable. This type of
attendance is not acceptable for matters related to annual financial statements, or other matters
stipulated in the bylaws;
Content of the call shall be recorded as kept as integral part of the meeting.
Art 157
Board authorities and
delegation (JSC - SAL)
The new law reformulates clearly the stipulations of the article, stressing on the necessity of publishing
the delegation given by the board to the Chair or the general manager, for a limited duration, in addition
to preserving the oversight role of the board.
Art 158
Related party
Transactions (JSC - SAL)
The board members may conduct, subject to prior approval by
the general assembly, related party transactions, except client
relations transactions which are permitted;
Also subject to general assembly approval, transactions with
other companies where the above mentioned persons have
similar functions in said companies.
The chairman, board members, general manager and assistant general manager and shareholders with 5%
or more, are subject to prior approval by the board of any related party transaction, except client relations
transactions;
Also subject to board approval, transactions with other companies where the above mentioned persons
have similar functions in said companies;
The chairman, board members, general manager and assistant general manager and shareholders with 5%
or more, and the external auditors, may not obtain financing facilities from said companies.
Art 159
Mandates in other
companies (JSC - SAL)
Board members may not participate in the management of
other companies with similar object, unless authorized.
The chairman, board members, general manager and assistant general manager may not participate in the
management of other companies with similar object, unless authorized by the general assembly
Art 160
Interests in other
companies (JSC - SAL)
The board members may not have interests in other entities
with the purpose of affecting the securities prices issued by the
company.
The chairman, board members, general manager and assistant general manager may not have interests in
other entities with the purpose of affecting the securities prices issued by the company.
Art 163
Financial disclosure (JSC -
SAL)
Matters of financial disclosure.
The new law adds reports to be disclosed with the financial statements comprising analysis, forecasts,
risks and major transactions.
Art 164
General assembly
invitation (JSC - SAL)
The board members convene the general assembly. The board convenes the general assembly.
Art 165 Legal reserve (JSC - SAL) The legal reserve is constituted by the board members. The legal reserve is constituted by the board.
Art 166
Fraudulent behavior (JSC
- SAL)
The board members are responsible for fraudulent behavior
towards third parties.
The board members and the general manager are responsible for fraudulent behavior towards third
parties.
Art 167
Administrative faults
(JSC - SAL)
The board members are responsible for administrative faults
towards the general assembly but not towards third parties.
The board members and the general manager are responsible for administrative faults towards the
general assembly but not towards third parties;
In the event of split between chairman and general manager, the chairman is only responsible in the
event of breach of laws of bylaws.
Art 168
Internal liabilities (JSC -
SAL)
The company can sue the board members. The company can sue the chairman, the board members and the general manager.
Art 170
Internal liabilities (JSC -
SAL)
The liability from fault is on board members. The liability from fault is on board members and general managers

Article Topic
Current law
Amendments
Art 172
External auditors (JSC -
SAL)
External auditors mandate may be renewed. External auditors mandate may be renewed for 5 years only.
Art 173
Additional external
auditor (JSC - SAL)
Additional external auditor named by court is mandatory. Additional external auditor named by court is optional if shareholders owning 10% or more request so.
Art 174
External auditors
mandate (JSC - SAL)
The law focuses on the oversight role of external auditors;
It requires that the annual reports be given to the auditors 50
days before the annual general assembly.
The new law focuses on the role of the external auditors to review the annual reports and their
compliance to laws and bylaws;
It requires that the annual reports be given to the auditors 60 days before the annual general assembly.
Art 175
External auditors reports
(JSC - SAL)
The external auditors submit the reports presented by the board
to the general assembly.
The external auditors submit the reports to the general assembly. No mention of the board.
Art 177
External auditors conflict
of interests (JSC - SAL)
External auditors shall have no interest with a party that might
affect the price of company securities in the stock exchange.
External auditors shall have no interest, direct or indirect, with a party that might affect the price of any
type of company securities;
External auditors should have no conflicting interest with their mandate, whether with the company or
related parties.
Art 181
General assembly
attendance and
representation (JSC -
SAL)
Representatives of shareholders should be shareholders
themselves.
Representatives of shareholders should be shareholders themselves, unless the bylaws stipulates
otherwise;
It may be stipulated in the bylaws that attendance may be remote through audiovisual technologies, as
defined by the Minister of Justice, so long as the telecommunication means is reliable;
Content of the call shall be recorded as kept as integral part of the meeting.
Art 182
General assembly
attendance (JSC - SAL)
Attendance sheet of the general assembly gathers present and
represented.
Attendance sheet of the general assembly gathers present, represented and connected remotely.
Art 183
General assembly
secretariat (JSC - SAL)
Secretariat of the general assembly is the chairman and the
secretary.
Secretariat of the general assembly is the chairman and the secretary. They shall be present personally.
Art 186
General assembly voting
(JSC - SAL)
Number of votes is equal to number of shares, except otherwise
in bylaws or double votes.
Number of votes is equal to number of shares, except otherwise in bylaws or shares regime as per art 117.
Art 190
General assembly
adjournment (JSC - SAL)
Adjourning the assembly meeting is for 8 days. Adjourning the assembly meeting is between 8 and 15 days.
Art 195
General assembly voting
(JSC - SAL)
Shareholders who have contributions in kind do not vote on matters related to assessing said
contributions.
Art 197
General assembly access
to information (JSC -
SAL)
Share and bond holders have the right to access reports at the
head office 15 days before general assembly meeting.
Share and bond holders have the right to access reports at the head office or electronically;
15 days notice is removed;
Nullity of discussions due to refusal of provision of reports is removed;
Stipulation on the bearer shares is removed.
Art 199
General assembly
majority (JSC - SAL)
Decision at general assembly is taken at majority of present or
represented.
Decision at general assembly is taken at majority of present, represented or connected remotely.
Art 204
Extraordinary general
assembly majority (JSC -
SAL)
Decision at extraordinary general assembly is taken at 2/3 of
present or represented.
Decision at extraordinary general assembly is taken at 2/3 of present, represented or connected remotely.

Article Topic
Current law
Amendments
Art 205
Capital increase (JSC -
SAL)
Capital increase may happen only when initial capital is fully
paid.
Capital increase may happen only when initial capital is fully paid according to art 119, otherwise the
capital increase is void;
The bare owner of shares is the person entitled to subscribe to capital increase, unless agreed otherwise
and noticed.
Art 206
Capital increase
responsibility (JSC - SAL)
The responsibility related to the issuance of shares and capital
increase falls on the board members and shareholders.
The responsibility related to the issuance of shares and capital increase falls on the board members,
general managers and shareholders.
Art 214
General assembly
discussions (JSC - SAL)
Breach of procedures in the conduct of the general assembly
renders it void, unless corrected or foreclosed within 1 year.
Breach of procedures in the conduct of the general assembly renders it void, unless corrected or
foreclosed within 1 year from the meeting date for shareholders and the publication date for third parties.
Art 220
Liquidators appointment
(JSC - SAL)
Any stakeholder has the right to go to court to request appointment of liquidators.
Art 222
Liquidation reports (JSC -
SAL)
Liquidators receive the accounts of activities performed by the
board members
Liquidators receive the accounts of activities performed by the board members and general manager.
Art 844
Code des Obligations et
des Contrats
Company is a reciprocal contract between 2 persons. Company is a reciprocal contract between 2 persons. Whenever stipulated by the law, it may be 1 person.
Art 1
Company constitution
(LLC - SARL)
LLC is constituted by partners. LLC may be constituted by 1 or more partners. In the event of 1 partner, he is called sole partner.
Art 5
Company constitution
(LLC - SARL)
3-20 partners.
1-20 partners;
The company is not considered wind up if the shares are held by one shareholder;
A company with a sole partner may not be a shareholder in another LLC;
If this happens, the sole partner has to take corrective measures within 1 year, after which any
stakeholder may take this to the court. the court may reduce the time limit to 6 months.
Art 6
Company documents
(LLC - SARL)
Company documents should mention the name of the company,
the form of the company, and its capital;
Fine for violation is LBP 1,000-3,000.
Company documents should mention the name of the company, the form of the company, its capital and
registration number;
Fine for violation is equivalent to 1-3 minimum legal wages.
Art 9
Contributions in kind
(LLC - SARL)
The expert report on the value of the contributions in kind shall be presented only in the event there are 2
or more partners.
Art 11
Company publication
(LLC - SARL)
Publication of LLC is similar to publication of Joint Stock
Companies.
Publication of LLC is only at the commercial registry. No other requirements
Art 14
Partners succession (LLC -
SARL)
The bylaws may stipulate the option not to accept successors as
partners.
The bylaws may stipulate the option not to accept successors as partners in the case of company with 2 or
more shareholders.
Art 15
Transfer of shares (LLC -
SARL)
The company may exercise its right of first refusal within 15 days
from notice. After this notice period, any shareholder may
request within 30 days to buy the shares.
Any director may give notice to the company of the transfer of shares for it to exercise its right of first
refusal within 15 days from notice. The notice should reflect the name of the potential buyer, conditions
and price of sale. After this notice period, any shareholder may request within 30 days to buy the shares,
and if more than one requested, the shares will be distributed proportionately;
This article is not applicable in the event of a sole partner.

Article Topic
Current law
Amendments
Art 16
Company management
(LLC - SARL)
Adding the sole partner as a director of the company, in appointment or termination.
Art 20 Tort claims (LLC - SARL)
Tort claims of art 19 are foreclosed within 3 years of the damage
or its discovery.
Tort claims of art 19 are foreclosed within 5 years of the damage or its discovery.
Art 21
Financial reports (LLC -
SARL)
Replaced the enumeration of documents to be submitted yearly by the term "financial statements".
Art 23
General assemblies
invitation (LLC - SARL)
Shareholders are invited to general assemblies one month
before the meeting;
If directors or external auditors fail to invite, any shareholder/s
representing either both 25% of shareholders and 25% of
capital, or 50% of capital may convene, otherwise any
shareholder may request the court to appoint a person to
convene.
Shareholders are invited to general assemblies 15 days before the meeting, unless stipulated otherwise in
the bylaws;
Any means of invitation stipulated in the by laws is acceptable;
If directors or external auditors fail to invite, any shareholder/s representing 25% of capital may request
the court to appoint a person to convene.
Art 25
General assemblies
majority (LLC - SARL)
In the event of a sole partner, he signs alone on resolutions;
Resolutions on financial statements shall be registered at the commercial registry.
Art 29
Capital decrease (LLC -
SARL)
Art 21, 23, 26 and 29 are not applicable in the event of a sole partnership;
In this event, the director presents the report and the sole partner approves the financial statements;
The sole partner may not delegate his shareholder authorities to third parties.
Art 30
External auditors
appointment (LLC -
SARL)
Adds the condition that external auditors are mandatory where the sole partnership's capital hits LBP 30
million.
Art 31
Excluded persons from
external auditors
appointment (LLC -
SARL)
External auditors are appointed from listed experts for 3 annual
cycles;
Cannot be external auditors: directors, their spouses,
ascendants, descendants; partners or person who have
contributions in kind; persons remunerated by the companies or
its directors, their spouses, ascendants or descendants.
External auditors are appointed from listed experts, removed the requirement of the 3 annual cycles;
Cannot be external auditors: partner/s, directors, and their spouses, ascendants, descendants; persons
remunerated by the companies or its directors, their spouses, ascendants or descendants.
Art 33
Loss of capital (LLC -
SARL)
Adds the option in the event 3/4 of the capital is lost, either to wind up or reconstitute the capital
Art 34
Conversion of company
(LLC - SARL)
If the nets assets are more than 3 million LBP, conversion of LLC
to a joint stock company is enabled.
If the nets assets are more than 50 million LBP, conversion of LLC to a joint stock company is enabled.
Art 253 bis 1
Corporate financial
Crimes: misuse of assets
Are punished with imprisonment (3 months to 3 years) and/or penalty (25-50 times the legal minimum
wage), the chairman, board members, directors and external auditors who cause damage from bad faith
caused by the misuse or personal use of the company's assets or credit, or for working for the interest of
another company having with mentioned persons a direct or indirect interest.

Article Topic
Current law
Amendments
Art 253 bis 2
Corporate financial
Crimes: wrongful
disclosures
Are punished with imprisonment (3 months to 3 years) and/or penalty (25-50 times the legal minimum
wage), the chairman, board members, directors and external auditors who intentionally publish wrongful
financial statements. External auditors are published with the same if they intentionally hide said
violations from their reports.
Art 253 bis 3
Corporate financial
Crimes: statute of
limitation
New articles, a summary is made. Statute of limitation of 3 years on the above violations, from date of occurrence or discovery.
Art 210
Mergers and Split-ups:
definitions
Mergers of companies happen by converting patrimonial assets of one or more existing companies to a
new one;
Split-up of companies happens when patrimonial assets of a company are converted into other
companies, existing or new;
In mergers, the board may be extended to 20 members.
Art 211
bylaws
New articles, a summary is made. The operations happen according to the rules of bylaws amendment.
Art 212
terms
Said operations cause winding up companies without liquidation due to transfer of assets;
Shareholders moving from wound up companies to the new ones have terms as per the agreement on
merger or split-up;
Their shares are replaced and they may receive a cash premium of up to 10% on their shares.
Art 213
entry into force
Merger or split-up is effective from registration of new company, and if there are many companies, from
the last registration; otherwise from the date of registration of the last general assembly meeting
resolving on the operation.
Art 213 bis 1
shareholders
contribution
If the operations require an increase in shareholders contributions, such a decision should be resolved
unanimously.
Art 213 bis 2
publication
The merger or split-up project should be deposited at the commercial registry and recorded in the
company books and its summary terms published within a month from extraordinary general assembly
approval;
The article enumerates the information to be provided within the project.
Art 213 bis 3
merger decision (JSC -
SAL)
New articles, a summary is made. The extraordinary general assembly resolves on the merger.
Art 213 bis 4
merger external auditors
(JSC - SAL)
External auditors shall present a report on the operation, share value, conversion rate and net asset value;
A special auditor is appointed by court to review the report and produce an opinion.
Both reports are submitted then to the shareholders.
Art 213 bis 5
merger exclusions (JSC -
SAL)
Excluded from merger the companies fully acquired by the other between deposit of the merger project
at the commercial registry and the general assembly resolving the merger.

Article Topic
Current law
Amendments
Art 213 bis 6
merger decision (JSC -
SAL)
A new company resulting from a merger can be formed by the assets of the merged companies;
The extraordinary general assemblies of the merging companies resolve the merger, without the need for
a resolution by the new company.
Art 213 bis 7
merger and bond
holders (JSC - SAL)
The general assembly of bond holders in the merging companies may resolve to accept the merger, and
their bonds will be transferred to the new company;
Should they reject the merger, they may be reimbursed from the merging companies, without the
capacity to block the merger;
The article briefs also about the publication and reimbursement procedure.
Art 213 bis 8
merger and liabilities
(JSC - SAL)
The new company replaces the merging ones in regard to the liabilities towards others, besides the bond
holders.
Art 213 bis 9
merger creditors (JSC -
SAL)
Besides the bond holders, creditors of the merging companies may object to the merger before courts;
Follow up procedures are described.
Art 213 bis
10
merger and bond
holders (JSC - SAL)
New articles, a summary is made. The merger project is not to be presented to the bond holders assembly in the new company.
Art 213 bis
11
split-up regime (JSC -
SAL)
New articles, a summary is made. Art 213 bis 7 and bis 8 are applicable to split-ups.
Art 213 bis
12
split-up formation (JSC -
SAL)
New joint stock companies emerging from split ups can be set up from contributions of the initial
company solely;
If the shares given to shareholders in new company are equivalent to theirs in initial company, there
would be no need for the report of art 213 bis 4;
The extraordinary general assembly of the initial company resolves on the split up without the need for
resolutions from the new companies.
Art 213 bis
13
split-up and bond
holders (JSC - SAL)
New articles, a summary is made. Art 213 bis 11 applies to bond holders in split-up companies.
Art 213 bis
14
split-up and bond
holders (JSC - SAL)
New articles, a summary is made. The split-up project is not presented to the general assembly of bondholders.
Art 213 bis
15
split-up liabilities (JSC -
SAL)
The companies emerging from split-up are jointly responsible towards bond holders and creditors of the
initial company.

Article Topic
Current law
Amendments
Art 213 bis
16
split-up and assets (JSC -
SAL)
New articles, a summary is made. A company contributing with its assets may subject this operation to art 213 bis 15 to bis 19.
Art 213 bis
17
split-up regime (LLC -
SARL)
Art 213 bis 8, 9, 12, 13 and 19 are applicable to mergers and split-ups of LLC companies to the benefit of
other LLC companies;
Stipulations in joint stock companies related to contributions in kind are applicable to LLC;
New LLCs emerging from split ups can be set up from contributions of the initial company solely;
If the shares given to shareholders in new company are equivalent to theirs in initial company, there
would be no need for the report of art 213 bis 4.
Art 213 bis
18
split-up assets (LLC -
SARL)
New articles, a summary is made. A company contributing with its assets may subject this operation to clauses regulating split-ups to LLCs.
Art 213 bis
19
mixed forms of
companies
New articles, a summary is made. In the event mergers and split-ups happen between JSC and LLCs, art 213 bis 8, 9, 12, 13, 19 and 21 apply.
Art 213 bis
20
fiscal policy
New articles, a summary is made. All operations for the mergers and split-ups are exempted from fiscal stamp fees.
Art 213 bis
21
fiscal policy
All operations for the merger are exempted from stamp, transfer, inheritance and notary public fees and
registration.
Art 213 bis
22
fiscal policy
Merging companies shall pay their taxes dues before the merger date, in respect with the taxation law;
These companies are exempt from presenting clearance from the National Social Security Fund.
Art 213 bis
23
fiscal policy
Merger companies are subject to art 54 of VAT Law, with a 5% reduction on the discrepancies resulting
from the revaluation of fixed assets;
Said reduction does not apply to the profits from fixed asset sales if the valuation of said asset was done
within 2 years from completion of merger.
Art 213 bis
24
fiscal policy
All operations for the split-up are exempted from stamp, transfer, inheritance and notary public fees and
registration, unless the split-up benefits an already existing company.
Art 213 bis
25
fiscal policy
Splitting companies shall pay their taxes dues before the split-up date, in respect with the taxation law;
These companies are exempt from presenting clearance from the National Social Security Fund.
Art 213 bis
26
fiscal policy
Split-up companies are subject to art 54 of VAT Law, with a 5% reduction on the discrepancies resulting
from the revaluation of fixed assets, should the split-up result in new companies. If the split up ends in
existing companies, the discrepancies are subject to the normal tax rate.

Article Topic
Current law
Amendments
Art 458 bis 1
Global depository
receipts (GDR):
definition
GDRs are nominative tradable instruments linked to shares, principal or underlying, of a Lebanese JSC,
issued abroad by a special issuer and to be listed in organized exchanges.
Art 458 bis 2
Global depository
receipts (GDR): terms
This article enumerates the terms to be ensured by companies whenever issuing GDRs linked to their
shares.
Art 458 bis 3
Global depository
receipts (GDR): rights
Upon winding up and liquidation of a company, the GDR holders have the same rights as shareholders,
with respect to the stipulation on foreign acquisition of property rights.
Art 615
Rights of the bankrupt's
spouse
Recovery rights of the bankrupt's spouse are as follows. Recovery rights of the non-bankrupt spouse are as follows.
Art 625
spouse
The spouse of a bankrupt recovers her assets from before
marriage, in addition to assets she acquired through donation
during marriage.
The assets, movable and immovable, of the non-bankrupt spouse remain outside the bankruptcy's assets.
Art 626
spouse
Assets obtained with money by the non-bankrupt spouse during
marriage are bankruptcy assets, unless proved otherwise.
Are considered to be part of the bankruptcy's assets the assets of the non-bankrupt spouse purchased
with bankrupt's money during the 5 years before bankruptcy;
All methods of proof are valid.
Art 627
spouse
If the spouse pays debts of the bankrupt spouse, it is presumed
that said debt is paid with the bankrupt spouse moneys, unless
proved otherwise.
If the non-bankrupt spouse pays debts of the bankrupt spouse, the former may claim rights similar to the
creditors in the bankruptcy, unless proven that debt is paid with the bankrupt moneys.
Art 628
spouse
If the spouse was a merchant at the time of marriage or within a
year, property that he/she owned during marriage or through
inheritance or donation is subject to the spouse's mortgage.
If the spouse was a merchant at the time of marriage or within a year, property that he/she owned during
marriage or through inheritance or donation is subject to mandatory insurance.
Art 629
spouse
The non-bankrupt spouse may not claim the benefits in the
marriage deed from the liquidation, should the bankrupt spouse
be a merchant at the time of marriage or within a year;
Creditors may not claim the benefits of the marriage deed;
Donations during marriage are null too.
The non-bankrupt spouse may not claim the benefits in the marriage deed from the liquidation, should
the bankrupt spouse be a merchant at the time of marriage or within a year;
Creditors may not claim the benefits of the marriage deed.

Lebanese Code of Commerce - Guide to Amendments - 2019

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Lebanese Code of Commerce - Guide to Amendments - 2019