QUESTIONS & ANSWERS
What happens I don't raise the targeted funds for my startup?
If the minimum funding is not met then there are options for how to proceed based on the situation:
• Adaption of original business plan to function with less funding
• Extending the financing round
• Closing of the finance round with no funds transferred
Do I need a lawyer to be able to register as a merchant in Lebanon?
No, you do not.
What events lead to the dissolution of my joint stock company?
The following events lead to the dissolution of your joint stock company:
• The end of the company’s duration in the article of association
• The execution of the anticipated project for which the company was established or if it becomes impossible to achieve such project
• A decision of the shareholders at an extraordinary general meeting, whereby at least 1/3 of the capital of the company is represented and the decision is made by the majority of the votes of the shareholders present or represented
• The loss of 3/4 of the company capital (provided that the capital is fully paid) and an extraordinary general meeting decision to dissolve the company
What is the quorum needed to amend the joint stock company's object?
The legal quorum to amend the joint stock company's object should always represent at least 3/4 of the company's share capital.
Who is responsible for the management of a limited partnership?
General partners are responsible for the management of the limited partnership.
Limited partners cannot interfere in the management of the partnership, even if by proxy; otherwise, a limited partner becomes jointly liable with the general partners for the debts of the partnership. However, limited partners can have positions in the limited partnership which do not require representation of the firm in front of others.
As an investor, can I ask the startup for an annual report?
Yes, you can.
Are there any restrictions on the number of claims to be incorporated in a patent application?
No, there are no restrictions to the number of claims to be incorporated in the specification. But the applicant claims should be supported by the description and should be based on the description. This means that all the characteristics of the invention that form the part of the claims should be fully explained in the description.
What is the average corporate tax rate?
The average tax rate is 15%.(i.e. the limited liability company is subject to a 15% tax on income on its net profit). The tax on the distribution of dividends is 10%, and is applied if such distribution is executed.
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.
How can I prove the existence of a commercial representation relationship in the absence of a written commercial representation agreement?
Law no. 34/67 allows you to show letters and correspondence between both parties to prove the existence of the contract in case of any conflict.
Are there any requirements that should be met when using the limited liability company's trade name?
Yes, there are. The expression of "limited liability company", the capital amount, and the registration number at the commercial register should be clearly mentioned next to the company's trade name on all paperwork, advertisements, newsletters, and any documents issued by the company.
Can a joint-stock company be managed by foreigners?
Yes, it can. However, the majority of the board of a joint-stock company should be formed by Lebanese.
How can I open a branch of a Lebanese company if the company is in Lebanon?
• The following documents are required to open a branch of a Lebanese entity in Lebanon:
- A request form filed by the person or her legal agent
- Clearance from the National Social Security giving capacity to register a branch for a merchant or a company
- For companies, minutes of a general assembly meeting signed by the legal signatory and the shareholders, where a decision was taken to open a branch
• The procedure takes approximately 48 hours and includes:
- For merchants:
✓ Filing a request form with the commercial register in the department where the branch is to be opened:
o the applicant should mention the decision taken to open the branch (minutes of general assembly meeting), and
o the applicant should mention the branch address
✓ Filling a form to be registered as a merchant whereby the new branch is mentioned
✓ Signing the request by the signatory at the commercial register
✓ The merchant obtaining a certified copy
- For corporations:
✓ Registering the minutes of the general assembly meeting at the commercial register
✓ The general manager or her legal agent obtaining a certified copy
For how long is a copyright protected in Lebanon?
A copyright is protected for the rest of the author's life and for 50 years after her death.
What are the conditions to patent an invention?
An invention is liable for protection if it is novel (worldwide novelty), creative and applicable.
What are the funding alternatives in Lebanon?
Financial institutions in Lebanon offer a range of financial incentives and facilities to help companies set up and expand their businesses through various government agencies, publicly run institutions or private institutions. In particular, startup companies can receive funds through Circular 331, subject to terms and conditions.