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QUESTIONS & ANSWERS

Are there any specific conditions that should be met in a commercial representation agreement?
Yes. A commercial representation agreement should be in writing for evidence purposes. The governing law clause should designate Law No. 34/67 as the applicable law and Lebanese courts should have exclusive jurisdiction.
Should I negotiate the option pool post-money valuation?
If you are the founder, you should try to negotiate the option pool post-money and force the new investors to share in the dilution. In practice, the standard for most term sheets is to calculate the option pool pre-money which is more beneficial to investors.
What does the trademark filing certificate contain?
The filing certificate delivered to the depositor should contain:
• The number of the filed trademark
• Date and hour of filing
• The filing duration
• Name, title, nationality and domicile of the depositor
• When necessary, name, title and domicile of the agent or proxy
• Sections of international classification relating to the products or services to which the trademark applies
• Any previous filings that might have been effected abroad
What events lead to the dissolution of a partnership limited by shares?
The following events may lead to the dissolution of a partnership limited by shares:
• The end of its specified term
• The execution of the anticipated project for which the company was established or if it be-comes impossible to achieve such project
• The elimination of the object of the company
• The disappearance of its capital or the disappearance of one of the two categories of partners
• The partners’ decision to dissolve the company with the approval of the accredited partners
• The loss of capacity or bankruptcy of an accredited partner
• The death of the sole accredited partner. If there is more than one accredited partner and one of them dies, the company is not dissolved but rather remains standing with the other partners
Should the full capital of a partnership limited by shares be paid upon subscription?
The capital of a partnership limited by shares should be subscribed to in full, but a quarter of the value of the shares should be paid, and the paid amounts should be deposited at an accredited bank.
If I haven't filed my trademark, how can I prove my precedence usage of it?
A written evidence is highly and imperatively recommended to claim your precedence to use a trademark.
What should the joint stock company's articles of association include?
A joint stock company’s articles of association should include the following:
• Company’s name
• Company’s purpose
• Company’s duration
• Company’s main office
• Company’s capital
• Number of shares
• Value and type of shares (nominal or bearer)
• Securities
• Profits distribution and management
• Prerogatives of the board of directors
Can the shares of a holding Company be owned by foreigners?
Yes, they can.
Should I deduct a reserve from the net profit of my joint stock company?
Yes, you should. The board of directors should keep 10% of the company’s net profit to form a legal fund reserve until such an amount equals 1/3 of the capital.
Is there a Stock market in Beirut?
Yes, there is. The Beirut Stock Exchange (BSE) was established in 1920. However, since the Lebanese war, low activity was observed on the BSE.
How much does it cost to incorporate a joint stock company?
The joint stock company incorporation fees amount to USD 2,000 approximately, in addition to the legal fees for processing incorporation which vary depending on the lawyer.
Can I renew my trademark indefinitely?
Yes, trademark protection can be renewed indefinitely upon the settlement of renewal fees close to the date of expiry.
What are the main activities of a Lebanese holding company?
The activities of a Lebanese holding company are limited to the following:
• Managing companies in which it owns partnership or shareholding assets
• Giving loans to companies in which it owns partnership or shareholding assets, and offering them guarantees against third parties
• Owning patents, discoveries, concessions, trademarks, and other reserved rights, and leasing them to companies inside Lebanon and abroad
• Owning personal or real property, provided they are only dedicated to its activities, subject to the provisions of the Lebanese law pertaining to the acquisition by non-Lebanese nationals of real estate in kind rights
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 be-comes 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 extraor-dinary general meeting decision to dissolve the company
What are the documents required to register an offshore company?
The same documents required for a joint stock company are required for an offshore company:
• Request for incorporation including:
- The name of the company in English and Arabic
- the corporate purpose
- The company’s office address
- the names of the shareholders
- the name of the authorized signatory
• Copy of the bank deposit of the capital evidencing payment of at least the quarter of the share capital
• A commercial circular issued by the competent commercial register
• Appointment of a lawyer to act as the legal counsel of the company
• A list of the shareholders, the number and the value of the shares owned by each of them
• Minutes of meeting of the organizational general Assembly confirming the subscription pro-cess and electing the first board of directors, unless the members of the first board of direc-tors are appointed in the articles of incorporation
• Minutes of meeting of the first board of directors appointing the chairman and dividing the charges among the members
• Articles of incorporation (to be prepared by the lawyer) notarized and signed before the clerk of the commercial register where they are filed
• A proof of ownership of the company’s office (i.e. deed of ownership, rent agreement or permit signed by the owner before the notary public allowing the company to use his premises as an office)
• If the shareholders are individuals, a copy of each partner’s ID
• If the shareholder is a moral person (a company), the following documents should be provid-ed:
- Articles of incorporation of such company
- Certificate of registration of such company
- Certificate of signatory power of such company (i.e. a document empowering a person to sign on its behalf)
- Minutes of meeting of the general assembly of such company empowering it to partici-pate and own equity in the company, and appointing one person to sign on behalf it and to represent it in the board of directors of the company
- If such company is foreign, all the above mentioned documents should be certified at the Commercial registry of its country, by its Ministry of Foreign Affairs and by the Lebanese Consulate
As an investor, can I change my mind and cancel my investment?
Yes, you can.