LAWYERS' DIRECTORY
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QUESTIONS & ANSWERS

What are guarantee shares?
Each board member should hold a minimum number of shares mentioned in the articles of as-sociation (i.e. the guarantee shares) to guarantee their board memberships. Such shares are deposited in the company’s fund to ensure a good management of the company and should remain nominal and may not be put into circulation.

Guarantee shares should remain blocked as long as the members of the board are performing their functions, and until acquitted upon approval of the company’s budget at the end of the financial year of the start date of their functions.
Can non-profit-making, educational institutions, universities and public libraries, without the authorization of the author, reproduce a limited number of computer programs for the purpose of offering them free of charge to students and university people?
Yes, non-profit-making educational institutions, universities and public libraries may, without the authorization of the author and without obligation to pay him compensation, reproduce a limited number of computer programs for the purpose of lending them free of charge to students and university people, provided that they possess at least one original copy of the work and provided that the Ministry of Education, the Ministry of Culture and Higher Education and the Ministry of Technical and Vocational Education subsequently issue decrees determining the copying mechanism, the categories of computer programs that may be copied and the number of copies allowed. Students may make one copy for their personal use.
How should my co-founders and I split up the company equity?
This is a question that needs to be answered on a case-by-case basis. It is generally not advisable to make an even 50/50 split, as it can lead to a lack of control and motivation. Have an honest, open discussion and don’t be selfish. This conversation needs to be held early, and put into writing.
How regularly should the partners' general assembly be convened?
The partners' general assembly should be convened at least once a year, within six months of closing the year's accounts. The partners may be convened during the year for urgent matters such as dismissing or appointing directors, or appointing auditors.
Should the commercial representation agreement be exclusive?
No, the commercial representation agreement may be either exclusive or non-exclusive.
What is the minimum number of shareholders in a joint stock company?
The number of shareholders in a joint stock company cannot be less than three.
Can a joint stock company issue bearer shares?
The commercial code provides for the issuance of bearer shares by a joint stock company and for the transfer of share from nominal to bearer shares and vice versa. However, the Central Bank of Lebanon issued a directive prohibiting issuance of bearer shares by any company.
Can a limited liability company be dissolved if one of the partners becomes bankrupt?
No, as long as there are three or more remaining partners.
How can I draft a patent application?
The patent should include the following:
• Title of the invention: it should reflect the main art of the invention. It should be precise, meaningful and should be normally within 15 words. A title can be used for more than one invention.
• Field of the invention: it should clearly describe the scope of the invention and subject matter of the invention on which it relates.
• Background on object of the invention: it should describe the state of the art in the particular technical area to which the patent relates and what problems remain to be solved or disadvantages accompanying the prior art solutions. In this section, you should clearly reflect the advantages of the invention. Each and every object and advantages of the invention should be described in a separate sentence. In a nutshell, this section is a comparative analysis between your invention and the existing technology.
• Summary of the invention: it should give a broad overview of the invention (e.g., the purpose of the invention, problems solved, advantages offered, etc.).
• Drawings: it should include one general figure describing the patent as a whole and a separate figure for each part of the invention that has a technical role.
• Brief description of drawings: it should include a written description of the invention explaining explains how to make it and how to use it.
• Detailed description of the invention: it should describe in detail what the invention is and how it is made and used. It should reflect the whole picture of the invention and be sufficient for a person skilled in the art to perform the invention by developing necessary technical know‐how.
• Claims: the claims are the heart of a patent, in that they define the limits of exactly what the patent covers and what it does not cover. You have the right to exclude others from making, using or selling, only those things which are described by the claims. Make sure you use your words correctly. It is recommended that you start with the broadest claims of your invention and then progress to narrower claims. You can precede your claims with a short statement such as “I/We claim: …”. Each claim should consist of an introduction, linking word, and body.
Who does a tag-along clause protect?
A tag-along clause protects the minority shareholders.
Is it mandatory to use my trademark after I register it?
No, it is not. In fact, it is possible to register a trademark in Arab countries without actually using it. However, trademark rights should be maintained through actual use. Trademark registrations in most of the Arab jurisdictions, including Lebanon and the UAE, for example, can be vulnerable to cancellation in the event of non-use, usually within a period of 3 or 5 years.
What are the prohibited activities on an offshore company?
• Lebanese offshore companies are prohibited from undertaking insurance activities, as well as all activities undertaken by banks, financial institutions and all institutions subject to the control of the central bank of Lebanon.

• Lebanese offshore companies are also prohibited from making any profits or movable or im-movable revenues in Lebanon, or resulting from services provided to resident institutions, with the exception of its bank account revenues and the revenues resulting from subscription to treasury bonds.
Can a board member of a joint stock company be a member in other similar companies?
No. The members of the board cannot assume management of any similar company unless they get an annual authorization during the annual shareholders' meeting.
Can a limited liability company be fully owned by foreign investors?
Yes, it can. Foreign investors can fully own a limited liability company in Lebanon in all sectors except those related to weapons and media, and in some cases real estate ownership and some types of activities related to national security and commercial representation.
Which symbol is better to use, the (tm) or the (r) symbol?
In principal, the (tm) symbol can be used when trademark rights are claimed in relation to a mark that has not been registered at the Trademark Office of a particular jurisdiction, meaning that, the use of the (tm) symbol does not mean a legally enforceable trademark. However, the registration symbol (r), does carry legal weight. It should only be used when the mark is registered with the Trademark Office of a particular jurisdiction. Using the symbol (r) illegitimately can be treated as fraudulent marking in most of the countries in our region.