QUESTIONS & ANSWERS
In the Lebanese law, can I initiate an opposition to a trademark application?
The Lebanese Law does not provide for opposition to a trademark application. However, an opposition can be initiated against an infringer through a court action. A cancellation action can be instituted by a lawyer. A trademark remains vulnerable for the five years following the filing/ registration date.
How should the capital of a Lebanese joint stock company be paid?
The capital of a joint stock company should be paid as follows:
• At least a quarter of the value of each share should be paid upon subscription. The balance of shares should be settled on the dates set by the board of directors.
• Amounts paid by shareholders should be deposited at any recognized bank in a special account opened in the name of the company followed by the expression “under establishment” with a list of the names of the subscribers and the amount paid by each
What is the minimum number of partners in a partnership limited by shares?
The law did not specify a minimum number of partners for a partnership limited by shares. However, according to the general regulations, the number of partners should not be less than 2.
What is the Lebanese Arbitration Center's responsibility during the arbitration process?
The Center oversees the arbitration process and is responsible for:
• Appointing arbitrators or confirming, as the case may be, arbitrators nominated by the parties
• Deciding upon challenges of arbitrators
• Fixing and extending time limits
• Scrutinizing and approving all arbitral awards
• Fixing the arbitrators' fees taking into consideration the amount in dispute
What court is competent in case of any conflict between the commercial representative and the represented company?
The Lebanese courts have exclusive jurisdiction to look into any conflict that arises between the commercial representative and the represented company. More specifically, the court under which the commercial representative exercises her activity is the only competent authority.
Should I pay the whole amount of the share capital of a joint stock company upon incorporation?
No, you can pay a quarter of the value of the company’s share capital and commit to pay the remaining amount after a period not exceeding 6 months.
How is a Lebanese offshore company taxed?
• Lebanese offshore companies are subject to an annual flat tax of USD 667.This tax will apply as of the first year of registration.
• Lebanese offshore companies are exempted from:
- Stamp duties on contracts
- Tax on profits
- Interest tax gained on foreign investments
- Tax on interests and amounts paid to foreign residents
- Tax on salaries paid to employees working outside Lebanon
- Inheritance tax
What is a term sheet?
A term sheet is a bullet-point document outlining the material terms and conditions of a business agreement. It is a starting point for negotiations between founders and investors.
Does Lebanon use the international classification for designs?
No, it doesn't.
Can the general assembly of a Lebanese holding company convene outside Lebanon?
Yes, it can. However, the annual ordinary general assembly should always be convened in Lebanon, within a maximum time of five months after the end of the fiscal year.
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.
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.
Who is considered a merchant?
Any person engaging in a commercial activity seeking profit, as well as commercial corporations, which are commercial by nature, or have, a commercial object, is considered a merchant.
What if I don't record the assignment of the trademark?
If you don't record the assignment/merger of the trademark, late fine will be due against each trademark for every 2 months of delay (after the 3-month grace period).
Is there any deadline to apply for the publication of a secret filing of a model or design?
Yes, there is. The deadline to apply for the publication of a secret filing of model or design is five years.
Am I allowed to transfer funds from Lebanon and vice versa?
Yes, you are. Complete funds movements from Lebanon and vice versa are acceptable. Currency switch can be executed without any restrictions and while maintaining banking secrecy, which cannot be lifted, except in some cases.