he Companies Law Part One General Rules Definitions Article -1In the application of the rules of this law,

the following words and phrases shall have the meanings assigned to them unless otherwise is necessitated by the context. - The Advertisement:-The advertisement in two daily newspapers that are issued in Arabic language and the company's electronic site if found. - Publication: Publication in the official gazette (Al Kuwait Alyoum). Registration: Registration in the commercial register Declaration: Registration with publication in the official gazette. - The Authority: The Money Markets Authority. - The Ministry: The Ministry of Trade and Industry. The Minister: The Minister of Trade and Industry. The Control Parties The Ministry, the Authority and Central Bank of Kuwait as regards companies compliant with any of them or the other parties which are decided by the law. The Founder: Every person who participates an actual participation in the incorporation of the company, signs its contract himself or through his deputy, and participates in its capital with a pecuniary or in kind share. - The Company's Contract: It is the contract for the incorporation of the company or the incorporation contract and the statute if found. -2The stated rules in this part shall govern all companies together with taking into consideration the special rules for every kind of the companies' kinds which are stipulated in this law. -3The incorporation of the company shall be according to a contract in which two persons or more are committed to participate in a project that aims at materializing profit by providing a share of money or work in order to divide what results from that project of profit or loss. It shall be permissible, in cases stipulated by the law that a company is incorporated through the act of the sole volition of one person. It shall also be permissible to incorporate companies which basic purpose is not to materialize profit. The executive regulations organize the rules for these companies provided that the company shall take on of the types stipulated upon in Article 4 that is compatible with its nature. -4The company shall take one of the following forms:Joint Liability Company. Partnership in commendam company

Commandite by shares company Joint venture company. The joint stock company The limited liability company. 7- The sole proprietorship company Every agreement that does not take one of the kinds aforementioned in the precedent paragraph, the persons that concluded it shall be personally and jointly responsible for all obligations arising from it. -5With the exception of the joint venture company, it must be obtained the approval of the ministry to found a company and its objectives according to the rules of this law and its executive regulations. The executive regulations shall organize the procedures for the establishment of the company, and the issuance of the necessary permits to practice its activity in a way that shall guarantee the execution of all these procedures through a special department in the ministry that include representatives from the governmental parties of relation. -6It is mandatory to obtain the approval of the control parties and others of the parties regarding the formation of companies that are compliant with its control, its formation contracts and statutes. -7With the exception of the joint venture company, the contract of the company must be in writing in a formal document that is accredited or else it shall be void. It shall be permissible for the partners to contest among themselves for the voidness arising for not writing the contract according to the method stated in the previous paragraph, and it shall not be permissible for them to contest with voidness before others, who may contest with the voidness before them. If it is ruled the voidness of the company's contract according to the request of others, the company shall be deemed as if it were not existent for him. But if the ruling of the contract's voidness is according to the request of one of the partners, the voidness shall not have an effect on this partner except from the date of raising the case. -8The founders of the company or the partners in it, according to cases, shall be jointly accountable for indemnifying harm inflicted on the company or partners or others due to the voidness of the company's contract. c -9With the exception of the joint venture company, the contract of the company shall be declared and also what occur on it of amendments according to the rules of this law. In case the contract is not declares according to the said method, it shall not be valid before others. If the non-declaration is limited to one statement or more of the statements that are mandatory to declare them, only these statements shall not be valid before others. However, it shall be permissible for bona fid others to hold to the existence of the

company or what occur on its contract of amendments even if it did not fulfill the declaration procedures. The company's managers or the members of its board of directors shall be jointly responsible to indemnify the harm that inflicts the company or the bona fid others for non declaration. -10The contract of the joint stock company of both kinds must include the formation contract and the statute as for others of companies, except the joint venture company, it shall have a formation contract and it shall be permissible that the partners set forth a statute for it. The executive regulations shall exhibit a model of the formation contract and the statute for companies stipulated upon in this law. This model shall include the information and conditions requested by the law and the executive regulations, and also the conditions which the partners and founders cannot agree on anything in its contradiction. The partners shall have the right to add what they consider of conditions which are not in conflict with the ordering rules in the law and its executive regulations. -11If the capital of the company includes on its formation or when increasing its capital shares in kind, these shares must be evaluated by one of the auditors accredited by the authority. The executive regulations shall stipulate the basis and controls for the evaluation of the shares in kind. The evaluation of the share shall not be final except after its endorsement by the company or the constituent assembly or the general assembly according to cases. The providers of the shares in kind shall not have the right to cast their votes regarding the endorsement of the evaluation even if they are shareholders of owner of pecuniary shares. If it is revealed that the evaluation of the shares in kind is over tenth less than the value for which it was submitted, it shall be permissible for the provider of the share in kind to settle the difference in cash, also it shall be permissible for the provider of the share in cash to renounce subscription with the share in kind. In all cases the shares in kind may not represent shares or shares which values are paid in full. -12It shall not be permissible for the company to have the name of any other company or a similar one if that name of a company is practicing the same activity, this is except if the name is that of a company under liquidation and agrees on this naming. The company which claims that another company took its name or a name similar to it shall have the right to request from the ministry to order the company to change this name. The ministry shall have to adjudge this request within 60 days as from the date of its submission otherwise this shall be considered as a rejection to it. The executive regulations state the necessary conditions that must be fulfilled in the application and the documents that must be accompanying it. -13-

The company shall have the right to change its name according to the necessary procedures to amend the company's contract, and declaration procedures must be undertaken for the new name. The change of the name of the company shall not entail touching its right or its obligations, or the legal procedures that it undertook or were undertaken against it. -14The company shall have a specified objective or more and it shall be limited to the objective stated in its contract. However, it shall be permissible that the company practices similar or completion works that are necessary or related to its objectives. It shall be permissible for the company to amend its objective even if this led to changing its activity. This is provided that it follows the procedures for amending the contract of the company according to the law. It shall be permissible to incorporate companies with one special objective to issue debentures or others of instruments or for any other objective. The executive regulations state the controls and special rules in this respect. 15Without prejudice to the rules of Law No. 7 for the year 2010, that is aforementioned regarding persons who are authorized to work according to the rules of the Islamic Shari'a, it is mandatory that companies which are not subject to the control of the authority and practices its objectives according to the rules of the Islamic Shari'a to comply in its actions with the rules of the Islamic Shari'a, and that it constitutes in them an independent body to control the legitimacy of the works of the company which members shall not be less than three who are appointed by the general assembly of the company or the meeting of the partners. It must be stipulated in the company's contract the existence of this body, the method of its formations, its competencies, the system of practicing its work, and in case a conflict arises between the legitimate control's members around the legitimate rule, it shall be permissible to refer the litigation to the Legal Opinion (Fatwa) Authority in the Ministry of Endowments and Islamic Affairs that is considered the final reference in this respect. The legitimate control body shall have to submit an annual report to the general assembly of the company or the meeting of the partners that includes its opinion of the extent to which the company's works are adapted with the rules of the Islamic Shari's and what it has of remarks, This report shall be entered in the annual report of the company. In all cases if the disposal is among the objectives of the company and according to the formulas of contracts compliant with the Islamic Shari'a it shall not be subject to the provisions of Articles 508, 992 and 1041 of the Civil law and Article 237 of the Trade law. -16The establishment of the company shall be for a period which the founders agree to specify in the company's contract, and this period may be extended before its expiry by a resolution issued by the General Assembly of the partners or shareholders that possess more than half the shares or the share capital.

If no resolution for extension was issued and the company continued in conducting its activity the period of the company shall be automatically extended fort a time similar to the period agreed upon in the contract and under the same conditions. The partner who does not want to remain in the company following the termination of its period shall have the right to withdraw from it. In such a case his rights shall be evaluated according to the first paragraph of article 11 o F this law. 17It shall be permissible that the partner's share is a certain amount of money or a share in kind or work which serves the purposes of the company, it shall not be permissible that the share of the partner is limited to what he has of reputation or influence or wealth or financial confidence. The pecuniary share and those in-kind on their own constitute the capital of the company. The partners' shares shall be deemed of equal value and are accrued as ownership of assets and not just their utilization. This is unless there is an agreement or a custom to the contrary. 18All partners shall share profits or losses proportionately to their shares in the capital and in accordance with the following rules:1 - If the company's contract has not designated the proportion of each of the partners in the profit or loss, the share of each of them in this shall be proportionately to his share in the capital. If the company's contract includes a condition to deprive one of the partners from the company's profits or to be exempted from being obligated with its losses this condition shall be void and the contract shall be valid. If the contract of the company is limited to designate the share of the partner in profit, then his share in he loss shall be equivalent to his share in profit, and the case shall be similar if the contract is limited to designate the share of the partner in the loss. It shall be void every condition that gives the partner the right to obtain a fixed interest for his share in the company, 19If the share of the partner is limited to his work and his share in profit or loss was not designated in the company's contract, he shall have the right to require the evaluation of his work. This evaluation shall be the basis to define his share in profit or loss according to the precedent controls. However, it shall be permissible to agree on the exemption of the partner, who only provided his work from participating in the loss provided that it was not decided for him a wage for this work. If the partner provided in addition to his work a pecuniary share or a share in kind he shall have a portion in the profit or the loss for his pecuniary or in kind share. 20It shall not be permissible to distribute fictitious profits; otherwise the creditors of the

company shall have the right to claim from every partner or every beneficiary to return what it received of them even if he was bona fid. The manager of the company or the board of directors that recommended the distribution of the fictitious profits shall be jointly responsible for the distribution of these profits. The partner shall not be committed to refund the real profits which he disbursed even if the company realized losses, in the following years. 21The company is responsible for the works and disposals that are undertaken by its director or its board of directors in its name and for its account if they are of what enters in the company's objectives even if they surpass the decided limitations on the authority of the manager or the board of directors in the company's contract, unless the company proves that the party disposed to was of knowledge or could have known at the time of performing the work or the disposal of the said limitations. It shall not be permissible for the company to hold on its irresponsibility before bona fid others regarding the works or disposals that are aforementioned in the previous paragraph relying on that the manager or the board of directors were appointed in violation of the rules of the law or the contract of the company unless the company proves that the party disposed to was of knowledge or could have known at the time of proceeding the work or the disposal of the said limitations. The manager of the company and its board of directors shall exert the care of the careful man in exercising their authorities and competencies. 22All correspondences, acquittals and others of the papers that are issued by the company must carry its name and a statement of its kind and its registration number in the commercial register. It shall be added to these statements in other than the joint liability company, the partnership in commendite company, and the commandite by shares company a statement regarding the capital of the company and the paid capital. If the company is under liquidation it must state this in the papers issued by it. The legal representative of the company that violates the rule of this article shall be jointly responsible with the company of the harm inflicted on others due to this violation if it is proven the non sufficiency of the company's monies to indemnify him of the damage inflicted on his due to this violation. 23In exception of the joint venture company, the company shall enjoy the juristic personality from the date of its registration. Every company that is established in the State of Kuwait shall be of a Kuwaiti nationality, and shall have to take a domicile in the State which information shall be established in the commercial register. The domicile shall be the credible place to which is addressed the correspondences and judicial notifications to the company. It shall not be credible the change of the domicile except if it is recorded in the registry. 24-

It shall not be permissible for the company to practice its activity except after declaration and obtainment of permits and approvals of the control-parties on the practice of the activity 25The contracts and actions undertaken by the founders in the name of the company under formation shall continue their validity with the company after its establishment if they are necessary for this company's incorporation and the company shall bear all the expenses that they incurred. 26It shall not be valid for the company after its incorporation any disposal that is undertaken between the company under formation and its founders. This is unless such a disposal is accredited by the constituent assembly of the company in a meeting where the founders of related interest shall not have any casting vote. In all cases the founder of related interest shall submit a report with information and data relating to this disposal at the company's domicile seven days prior to the convention of the assembly and any of the shareholders shall have the right to view it, and this shall be indicated in the invitation for the meeting of the assembly.

27Without prejudice to the rules of the penal responsibility, the founder shall be committed during the incorporation stage of the company to exert in his dealings that are undertaken in the name and for the account of the company during this stage the care of the careful man. The founders shall bear jointly any obligations or damages that could be inflicted on the company or other due to their acts or due to any violation to such an obligation. If the founder receives any money or information belonging to the company under formation, he shall have to return to the company this money, and any profit he could have obtained as a result of his usage of these monies or information, and the founders shall be jointly responsible for their obligations. 28In all companies, it shall not be heard on denial the cases of the creditors of the company against its partners in them after the elapsement of five years since the termination of the company or the withdrawal of the partner from it as regards cases against this partner. If the debt is established on the company during the presence of the partner in it and is due after he withdrew from it, in this case the period shall start as from the maturity date. Taking into consideration the rule of the prior paragraph, the period for not hearing the case shall be valid as from the date of the completion of the declaration in all cases in which the declaration is mandatory. 29If it is ruled the revocation of the company's contract, the company shall be considered a de facto corporation, and it shall follow the conditions of the contract in its liquidation, and the settlement of the partners' rights before each other. The voidance of

the company's contract shall not entail the voidance of the actions of the company during the period precedent to the date of the issuance of a final voidance ruling, unless such actions were void for another reason. 30It shall be permissible for the founders or the shareholders or the partners, during the precedent or the following period of incorporation, to conclude an agreement that regulates the relationship among them. It shall not be permissible that such an agreement includes any other conditions stipulating its validity to the company unless an approval is issued on these conditions by the competent body in the company, and that the conditions of this agreement are not in conflict with ordering rules in this law. 31The contract of the company shall be kept in its headquarter, and on its electronic site, if found. It shall be permissible for every person to obtain a true copy of the original of this contract against appropriate charges decided by the company. 32Every concerned person shall have the right to view at the Ministry the company's contract, the minutes of its general assemblies and others of information and deeds kept with it that relates to the company, and also to obtain a true copy of the original against a charge decided by the Ministry. t Two The Joint Liability Company Chapter One Introductory Rules Article -33The joint liability company is a company incorporated between two persons and more, which works under a specific title, and the partners are personally and jointly responsible for the obligations of the company as regards all their assets, and it shall be void every agreement in contrary to this. 34Every partner in the joint liability company shall acquire the capacity of a merchant, and all the partners shall have to be Kuwaitis. The partner shall be considered undertaking commercial works under the name of the company. The bankruptcy of the company shall entail the bankruptcy of all partners in it. However, the acquirement of the partner the capacity of a merchant shall not commit him with the duties of merchants unless he has other commercial works necessitating this. 35The name of the company shall be constituted of the names of all partners or the name of one of them or more together with the addition of the phrase (and partners or their partners) The name of the company must be compatible with its existing form and in compliance with the truth, and it is followed with the phrase (Limited Liability -LLC). It shall not be permissible to place in the name of the company the name of a person who is not a partner in it. If the name of a person who is not a partner is added with his

knowledge of this, he shall be personally and jointly responsible with partners for the obligations of the company before bona fid others. Without prejudice with the rule stated in the previous paragraph, it shall be permissible for the company to keep in its title the name of a partner that withdrew or died, if such a partner that withdrew or the heirs of the dead partner agree. 36It shall not be permissible for a joint liability company to obtain a loan by issuing bonds or to obtain a financing by issuing instruments through public subscription. -37It is mandatory that the capital of the company is sufficient to achieve its objectives. The executive regulations state the minimum limit of the capital of the company. The capital is divided into equal shares in value that are indivisible. pter Two Incorporation Conditions Article -38The contract of the joint liability company must include the following information:The address of the company, and its commercial name if found. The company's headquarter. The object from the incorporation of the company. The term of the company if found. The names of the partners, their titles, and the residence of each of them. The method of management of the company and the persons responsible for the management and their authorities. The amount of the company's capital, the share of each partner in it, and a statement of the provided shares in kind, their nature and their evaluated values. The special rules for the distribution of profits and losses between the partners. The financial year of the company. The special rules for the liquidation of the company and dividing its assets. It shall be permissible for the partners to add other information pter Three Partners' Shares Article -39It shall not be permissible that the shares of partners in the joint liability company are in the form of securities that can be circulated. 40It shall be permissible for the partner to assign his share in the company to the rest of the partners, but it shall not be permissible for him to assign his share to other than the partners in the company unless this is stipulated in the contract of the company. This assignment shall not be valid before others except if it fulfilled the registration procedures. 41It shall be permissible for the partner to waive his financial rights related to his share in the company, and it shall govern such a waive the rules of transferring the right.

42It shall be permissible for the partner to mortgage his share in the company, the mortgage shall be concluded in writing, and such mortgage shall not be valid before the company and others except from the date of registering the mortgage in the commercial registry. 43If a creditor of one the partners undertakes the executive procedures on the share of his debtor, it shall be permissible for him to agree with the debtor and the company on the method of sale and conditions. In this case the shares shall be assigned according to the rules stipulated upon in Article 40 of this law. If it is not agreed on the method of sale within fifteen days from imposing the sequestration, it is mandatory to offer the share for sale in a public tender according to the procedures decided in the civil and commercial procedures law. The basic price shall be established after evaluating the share according to the first paragraph of Article 11 of this law. And in exception of the partner whose share are impounded, the sale-judge shall grant the partners three days to object on the joining of the person who submitted the best offer to the company. If none of the partners came forward with an objection within the said period, the judgment shall be issued for awarding the tender, and the contract of the company shall be amended according the judgment awarding the bid. Such an amendment shall not be valid for others unless it has fulfilled the registration procedures. It shall be permissible for the company or any of the partners, even prior to the issuance of the award of the bid judgments, to settle the debt of the partner to the impounder creditor. It shall also be permissible for the company during the said period, for the benefit of the partners or some of them, to recover a part of the seized shares within the limits that suffice to settle the debt of the creditor. In case of the objection of any of the partners on the joining of whoever was awarded the tender to the company, and the company or the partners did not settle the debt of the impounding creditor, or recover the shares according to the rules of the previous paragraph, the sale-judge shall issue a judgment for the dissolution and liquidation of the company and the appointment of a liquidator. The issued judgment in this respect shall be contestable in appeal according to the law. pter Four Rights And Responsibilities Of The Management Article -44The management of the company shall be undertaken by a manager or more from among the partners, and the contract of the company shall decide the method of his appointment, discharge, and the limits of his authorities in management. If there are several managers and the contract of the company did not provide a certain rule, the resolutions shall be issued with the absolute majority for them. In case of equity of votes the managers shall bring the issue before the partners to adjudge it and the

approval shall be with majority of the partners. 45If a manager is not appointed for the company, and the contract of the company did not condition that the management of the company shall be jointly by the partners, and every partner shall have the management competency, it shall be the right of any partner to object any work another partner is undertaking prior to its execution. In this case the issue shall be brought before the partners to adjudge it and the approval shall be with the majority of the partners. 46It shall not be permissible for the manager to undertake disposals exceeding the normal managements except with the approval of all the partners or according to an explicit provision in the company's contract. Such prohibition shall especially govern the following disposals:1 Donations, Sale of the company's properties, except if the disposal of them enters among the objectives of the company, To mortgage the assets of the company, To sell the store of the company or to mortgage it. To obtain loans, To guarantee others' debts, To arbitrate with reconciliation. 8- To reconcile and release. -47It shall not be permissible for the partners of others than the managers to interfere in the management works. However they shall have the right to view at the headquarter of the company themselves or through an agent, the company's books and its documents and to obtain photocopies of them and also to obtain a summarized statement regarding the financial status of the company. It shall be void any agreement on otherwise that that. Every partner shall have the right to request from the manager of the company any information regarding the progress of work of the company, or contracts and disposals concluded with it or its financial position. The manager of the company is committed to answer this information within a maximum period of fifteen days as from the date the company receives this request. 48It shall not be permissible for the manager of the company or to any of the partners in it to conclude with it for his own account or for others' account or to practice an activity of the type of the company's activity except with a prior approval from all the partners that is issued in each case on its own. 49The manager shall be accountable for the damage that inflicts the company or the partners or the others due to his errors in management or he undertakes works in violation of the law or the company's contract. It shall be considered void every condition in

contrary to this. It shall not be permissible to discharge the manager of the company except with the necessary majority for amending the contract of the company. However, it shall be permissible to discharge any manager by a judicial ruling upon the request of one of the partners if there are reasons justifying his discharge. The discharge of the manager and the appointment of the new manager must be declared. The discharge of the manager-partner shall not entail the dissolution of the company unless otherwise is stipulated in the contract of the company. In all cases the shares of the manager that is requested his discharge shall not enter among the quota that is necessary to take the resolution of discharge. If the shares of the manager are half the company's capital or more he shall not be discharged except with a judicial ruling. The meeting of the partners shall be held upon the invitation of the manager of the company or the request of the partners who meet the necessary quota to take the resolution that is required to enter into the agenda. The invitation shall be sent fifteen days at least prior to the decided date for meeting by registered mail with receipt together with sending a copy of the invitation by Email to the partner or by fax according to the information available to the company. The invitation may be delivered by hand two working days at least prior to the decided date for the meeting provided it shall be marked on a copy of the invitation an indication of its receipt. The ministry shall make the invitation for the convention of the meeting if the manager of the company abstains from holding it. The meeting shall be valid if it is attended by the partners who fulfill the necessary quota to make the resolution. The resolution shall be issued with the majority of the partners who possess more than half the capital. pter Five Amendment Of the Company's Contract The Responsibility Of The Partners And Creditors' Rights Article -52It shall not be permissible to amend the contract of the company except by a resolution issued from the meeting of the partners with the numeric majority of the partners who own three quarter of the capital and the amendment is executed by registration. The partner who did not approve to amend the contract shall have the right to withdraw from it. In that case his rights shall be evaluated with the agreement of the majority of the remaining partners. If this is not accepted his rights shall be evaluated according to the first paragraph of Article 11 of this law. 53The creditors of the company have the right to recourse to the company's assets, and they also have the right to fall back on any partner in the company at the time of

contracting with his private money. All the partners shall be jointly committed towards the creditors of the company. It shall not be permissible the execution on the private partner's money prior to warning the company to settle the debt and fifteen days elapsed without settlement. If one of the partners settles a debt on the company, he may recourse to the company for what he settled or to the remaining partners each proportionately with his share in the debt. If one of the partners has personal creditors, the creditors of the company shall have the right to vying them in recoursing to the private partners' assets. 54In case a new partner joins the company he shall be responsible with the other partners with all his assets for the obligations of the company after he joined the company. If a partner withdrew from the company or assigned his share or his share was recovered or sold a compulsory sale, he shall remain responsible for the obligations of the company that raised prior to the date of withdrawing, or assigning or recovering his share or selling it. He shall not be responsible for the obligations of the company which arises after that. -55Without prejudice to the rights of the creditors of the company, it shall be permissible to dismiss the partner from the joint liability company according to a judicial ruling upon the request of another partner or more who possess twenty five percent of the capital share at least, and relying on reasons justifying dismissal provided that the company shall continue to exist between the remaining partners. It shall be considered from the reasons justifying dismissal the actions of the partner that are considered as a justification to dissolve the company or the disposal of the partner of all his assets or some of it with the intention of harming the remaining partners. The share of the dismissed partner shall be evaluated according to the first paragraph of Article 11 of this law. t Three The Commandite The Limited Partnership Company Article -56The commandite is constituted of two categories of partners:The joint (acting) partners who are jointly accountable in their assets for all the obligations of the company and they shall solely undertake its management and all the active partners must be of Kuwaitis. The limited (silent) partners who participate in the capital of the company with financial shares but none of them is responsible for the obligations of the company except proportionately to his share in the capital. -57Taking into consideration the special rules which this part contains, it shall be followed for the establishment of the partnership en commandite, its registration in the commercial registry, the minimum limit of the capital, assignment of the partners' shares,

impounding the shares of the partners and mortgaging them, dismissal of the partner, amendment of its contract and its management the rules decided for the joint limited company in this respect. It is mandatory that the contract of the partnership en commandite contains the names of the active partners, the silent partners, their nationalities, their domiciles and the amount of the share of each of them in the capital. The proportion of the Kuwaitis' possession must not be less than fifty one percent of the company's capital. The title of the partnership in commandite shall be constituted of the names of all the active partners or the name of one or more of them together with adding the phrase ( and company (Co.) ). It shall not be permissible to state in the name of the company the name of a silent partner. If his name is stated without any objection from him he shall be responsible as a active partner before bona fid others. In all cases the name of the company must be followed by (Partnership in Commandite) (a limited partnership company). The management of the company shall be undertaken by one manager or more that are selected by all the partners from among the active partners or from others. It shall not be permissible for the silent partner, eve upon a delegation or a proxy; to interfere in the works of the management otherwise he shall be responsible with all his assets for the obligations arising from works he actually undertook for the account of the company. It shall not be considered interference in the management works the control of the disposals of the company's manager, and to view its books, to submit opinions to them, to permit them disposals exceeding the limits of their authorities. t Four The Commandite By Shares Chapter One Introductory Rules Article -60The comandite by shares is a company that is constituted of active partners that are responsible for the obligations of the company with all their assets, and of shareholder-partners that are not responsible for the obligations of the company except within the limits of what they possess of shares in the capital. The company shall have a title that is constituted of the name of an active partner or more or an innovative title or a title derived from the objectives of the company. It shall not be permissible to state the name of a shareholder-partner in the name of the company, if his name is stated without any objection from him he shall be considered as a joint partner as regards responsibility of the obligations of the company before bona fid others. In all cases the name of the company must be followed with the phrase (Commandite by Shares Company).

61The active partners in this company shall be governed by the legal system that governs the partner in a joint liability company and the shareholder partner in it shall be subject to the legal method to which the shareholder in a closed joint stock company is governed. This shall be for the amount that does not conflict with this part. 62The capital of the company shall have to be sufficient to achieve its objectives, the executive regulations shall state the minimum limit of the company's capital, and its capital shall be divided into shares of equal value that is indivisible. The shares of the joint partners shall be impossible to circulate, but they can be assigned or seized and mortgaged according to the special rules for the partners' shares in a joint liability company. The shares of the shareholder-partner can be circulated, seized and mortgaged according to the special rules of the closed joint stock company. pter Two Conditions of Incorporation Article -63The rules especially for the commendite shall govern the commandite by shares together with taking into consideration the rules stipulated upon in the following articles. 64The contract of the company must include the following information:The name of the company. Its headquarter. The term of the company if found. The objectives of the company. The names of the partners, their capacities in the company, their nationalities, their domiciles, and the number of shares owned by each of them. The amount of the capital of the company, the number of shares into which it is divided and the nominal value of the share. The name of the person who is assigned to manager the company of the joint partners. A statement regarding every non-pecuniary share, the name of the provider, the special conditions for providing it, the mortgage and preference rights entailed on it if found, 9- A statement of the approximate amount of expenses and costs that the company is committed to settle due to its incorporation. The contract of the company may not include any conditions which can exempt the active partners from the responsibility arising from the voidnes of the incorporation. 65It is mandatory that the number of partners in the company is not less than five provided that three of them at least are of the shareholders. All the partners shall have to sign the contract of the company. The active partners shall undertake the incorporation procedures and inquire about the damages that result from any error in these procedures.

66The partners shall have to settle half the capital at least on incorporation and deposit it in one of the local banks in an account that is opened in the name of the company. It shall only be disbursed to the manager of the company after submitting a certificate that establishes its registration in the commercial registry. The remaining amount of the capital shall have to be settled within a maximum period of three years as from the date of registration. pter Three Rights And Obligations Of The Company's Management Article -67The management of the company shall be undertaken by one manager or more from among the active partners, and it shall be decided in the company's contract his authorities and competencies. It shall govern his duties, responsibilities, his discharge and the responsibility of the company for his works the regulations and rules decided fro the manager in the limited liability company together with taking into consideration the rules stipulated upon in the following articles. -68It shall not be permissible for the shareholder-partner to interfere in the management works even upon a delegation from the active partners; otherwise he shall be jointly responsible with the active partners for the obligations arising from the works of his management. 69The partners other than the managers shall have the right to view the company's books and its documents and to extract the necessary information and request any data. It shall be void any agreement or decision otherwise than that. 70The company shall have a control board if the number of the shareholders-partners exceeds seven members. It shall be constituted of three at least that shall be elected by the company's general assembly from among the shareholder-partners and this shall be within thirty days at most from the date of registering the company in the commercial registry. The active partners shall not have a casting vote in the selection of the members of the control board. The term of the membership in this board shall be three years that are renewable unless otherwise stated in the contract of the company. 71 The control board shall submit to the general assembly of the company the results of its works. The members of the control board shall be responsible for the errors of the managers and their results if they knew about them and omitted to state them in their report. 72It shall govern the appointment of the auditor, the formation of reserves for the

companies, the control of the company and its liquidation the special rules of the closed joint stock company. -73The commandite by shares shall have a general assembly constituted from all the joint and shareholder-partners and they shall be governed by the special rules of the general assembly of the closed joint stock company. The manager of the company shall have the authorities of the board of directors in the closed joint stock company regarding inviting the general assembly for convention. 74It shall not be permissible for the general assembly to amend the contract of the company except with the approval of all the joint-partners with the addition of a number of the shareholders who represent more than half the shares of the shareholder-partners in the capital. This amendment shall be valid as from the date of its registration in the commercial registry. 75If the position of the company's manager became vacant, it is mandatory that the control board appoints a temporary manager that directs the expeditious issues, and invite the general assembly to convene within fifteen days from the date of his appointment to issue a resolution regarding the appointment of a manager for the company according to the required majority to amend the contract of the company, unless otherwise is stipulated in the contract of the company. t Five The Joint Venture Article -76The joint venture company is company contracted between two persons or more, this is provided that the company shall be limited to the relationship between the partners and is not valid before others 77The contract of the joint venture company is not subject to registration in the commercial registry, or publicity, and the contract is concluded to define the rights of the partners and their obligations, and also the method of dividing profits and losses between them and others of conditions. This contract shall be governed in general by principles decided in the contract of the company. The contract shall be established by all means of proofs, including in this evidences and proofs. 78The joint venture company has not a juristic personality, and the others shall not have a legal link with the works of the company except with the partner or partners he contracted with him/them. The partners shall recourse to each other regarding works of the company and the extent of their connection to it, and to the share of every partner in the profits and losses

according to what they agreed upon. 79In exception of the previous article, it shall be permissible for others to hold on to the contract of the company if it dealt with him in this capacity. t Six The Professional Company Article -80It shall be permissible to establish a professional company by two natural persons or more of those of one free profession on which apply the conditions and controls of its practice. The objective from it shall be to practice the works of the profession through group cooperation between them, It works under a title derived from its objectives and the name of the partners or the name of one of them and the addition of the word (& Co. or & Cos) according to cases. The company shall take the form of the closed joint stock company or the company of joint limited liability, or joint liability, or commandite without the partner acquiring the capacity of the merchant. It shall comply with the rules decided for the type of company that it takes without contradiction to the rules of this part. The executive regulations shall state the professions which may incorporate this type of companies. 81The license to establish the professional company from the Ministry shall be in coordination with the legal competent parties that supervise the organization of the profession's affairs which is practiced by the company and according to the conditions and rules decided by the Ministry in this respect. It is mandatory to declare the contract of the company by marking it in a special registry that is prepared by the competent party for this purpose-and which gave its approval to the Ministry to issue the license The professional company does not acquire the juristic personality, and it shall not be permissible for it to practice its works except after its registration in this registry. 82The Ministry shall decide in coordination with the competent party that supervises the organization of the profession's affairs practiced by the company the information which are included in the contract of the company. 83It shall be permissible for the partner to assign, sell or to mortgage his stock shares or shares provided that they shall revert in all cases to those of the same profession even if they are compulsorily sold. In case of assignment or sale to others, it is mandatory that all partners approve. In case the partners do not approve within thirty days from the date of bringing the matter before them, the company shall have to purchase the stock shares or shares at the offered price. The capital shall have to be decrease by the amount of the nominal values of the interests or shares.

-84The withdrawal or the assignment or the sale or the pledge shall be valid before others after marking it in the registry prepared for this. t Seven The Sole Proprietorship Company Article -85It is meant by the sole proprietorship company in the application of the rules of this law an activity which capital is totally owned by one natural or juristic person of Kuwaiti nationality. The owner of the company shall not be questioned about its obligations except to the extent of the capital allocated for the company. 86The sole proprietorship company shall have a statute that includes the name of the company, its objectives, its term, the information of its owner, the method of management and its liquidation and others of rules which are decided by the executive regulations. 87The capital of the company shall have to be sufficient to achieve its purposes and settled in full. The executive regulations shall define the minimum limit of the company's capital. The capital shall be divided in shares of equal value that are indivisible. It shall be permissible that the capital includes in kind shares that shall be evaluated according to the rules stipulated upon in Article 11 of this law. -88It shall be permissible to pledge the shares of the capital of the company. Also it shall be permissible to seize them and sell them according to the rules of the law of the civil and commercial procedures. In case the sale is for a part of the shares the company shall be converted with the force of the law to a limited liability company as from the date of marking the ruling of awarding the tender, and in all cases the ruling of awarding the tender must be published and advertised. 89The company shall be managed by the owner of the capital. It shall be permissible that he appoints for it one manager or more that represents it before judiciary and others and shall be responsible for its management before the owner, provided that any decision for the appointment of the manager shall only be valid after registering him in the commercial registry. 90In case the owner of the capital of the company liquidates it with malicious intent or ceased its activity prior to the termination of its term or prior to achieving the objective from its establishment, he shall be responsible for its obligations with his own money. He shall also be responsible with his own money if it is proven that he did not separate between his personal financial liability and the financial liability of the company which would harm bona fid others. 91 Taking into consideration the rules of this part, the company of the sole proprietorship

company shall be governed by the rules organizing the limited liability company according to a method that does not contradict with its nature. t Eight The Limited Liability Company Chapter One Introductory Rules Article -92The limited liability company is the company where the number of the partners shall not exceed fifty partners, and none of them is responsible for the obligations of the company except proportionately with his share in the capital. The company shall have to take a special name that is derived from its objective or from the name of one partner or more. This is provided that the name of the company will be followed by the phrase ( of a limited liability ) (L.L.C.). If natural persons participated in the establishment of the company who are not Kuwaitis, they must have a legal and continued residence in the state of Kuwait. The limited liability company shall be prohibited from undertaking banking works, or insurance works or investment of monies for the account of others. It shall not be permissible to incorporate a limited liability company or to increase its capital through public subscription. It shall be considered a public subscription to address and invitation to participate in the company whether directly or indirectly. It shall not be permissible that the shares of the partners are in the form of shares that can be circulated, and also it shall not be permissible that the company obtains a loan through the issuance of any securities that can be circulated. -95 The capital of the company shall have to be sufficient to achieve its objective and in Kuwaiti money. The executive regulations shall decide the minimum limit of the capital of the company and the proportion of Kuwaitis and others in the capital of the company. pter Two Incorporation Conditions Article -96The contract of the limited liability company shall have to include the following information:The name of the company and its address. The names of the partners, their titles, and their nationalities The company's headquarter. The term of the company if found. The objectives for which the company is incorporated The amount of the company's capital, the pecuniary or in kind shares that were provided by every partner.

The names of the persons who are assigned to manage of the company of the partners or from others, or the a statement of the method of their appointment, the names of the members of the control board in cases where the law mandates the existence of such a board/ management of the company and the persons responsible for the management and their authorities. The method for the distribution of profits and bearing losses. 9- Any other information prescribed by the executive regulations. -97The limited liability company shall not be incorporated except if it distributes all the pecuniary shares between the partners and they are settled in full, and the shares in kind are delivered to the company. The pecuniary shares must be deposited in one of the local banks and they are not disbursed except to the appointed managers whenever they submit a certificate establishing that it was registered in the commercial registry. pter Three The Legal System For Shares Article -98The capital of the company shall be divided in equal shares and the value of each of them shall not be less that one hundred Dinars. The share shall be indivisible. If there are numerous owners for the one share they shall have to select one of them who represents them before the company. It shall not be permissible to circulate the shares of the limited partnership capital except according to the rules of this law. The assignment of the shares shall be according to a written document and the remaining partners shall have the right to recover the shares with the same conditions if the assignment is for other than the partners. In case of the assignment of the share to other than the partners, it is mandatory to obtain the approval of the remaining partners. If it is impossible to obtain the approval of the partners, it is mandatory to publish the conditions of assignment in the official gazette. In case fifteen days elapsed without any of the partners coming forward to the Ministry with an application expressing his desire to use the right of recovery, the assignor shall have the right to dispose of his share. If the right of recovery is used by more than one partner, the sold share shall be divided between them proportionately to the share of each of them in the capital. It shall not be considered the application for recovery if it not accompanied by a check endorsed in the name of the assignor for all the value of the assigned share and is delivered to the assignee after the finalization of the assignment procedures. In case the assignor refuses to complete the assignment, it shall be permissible for the partner that requests recovery either to refrain from recovery or to obligate the assignor with this according to a judicial rule The contract of the company shall be amended with what indicates the assignment

according to an official document that is signed by the assignor and the assignee without the need for the signature of the remaining partners, or a judicial ruling for the execution and validity of the recovery. The assignment of the share shall not have an effect on the partners or others except from the date of registration. - 101The shares of the dead partner shall be transferred to his inheritors. It is permissible to provision in the company's contract that the remaining partners shall have the right to purchase these shares. If the transfer of the shares to the inheritors entails the increase of the partners' number that exceeds the decided maximum limit, the inherited shares shall remain as being one share in respect of the company unless the inheritors agree to transfer the shares to a number of them that enters within the maximum limit for the number of partners. The legatees shall be similarly as the inheritors as regards the rule of the previous paragraph. 102The partner shall have the right to pledge his share according to an accredited official document. The pledge of the share shall not have an effect on the partners or the others except as from the time of registration in the commercial registry and notifying the company about this pledge. If a creditor of one of the partners undertook execution procedures on the share of his debtor, he may agree with the debtor and the company on the method of sale and its conditions, otherwise it is mandatory to sell the share through public tender according to the civil and commercial procedures law. It shall be permissible for the partners in the company to participate in this tender, and it shall also be permissible for them to recover the share with the same conditions on which the tender was awarded provided that the deposit of the total price is deposited at the treasury of the court within seven days from the date of awarding the tender. This rule shall govern in case of bankruptcy adjudication of one of the partners. pter Four Rights And Obligations Of The Company's Management Article -103The management of the company shall be undertaken by one manager or more from among the partners or from others that are designated in the company's contract. If the contract of the company does not designate the managers, the ordinary general assembly of the partners shall appoint them. -104Without prejudice to the competency of the extraordinary general assembly, and the right of the control parties to discharge the manager of the company, it shall be permissible to discharge him by a judicial rule upon the request of a partner or more who owns the quarter of the share of the capital at lease and this shall be for the following reasons:-

If he commits an act of deceitful acts. If he commits an error that inflicted the company with gross damages. 3- If he violates the rule of Article (106) of this law. 105In case the competencies of the company's manager are not defined in the contract of the company or in the resolution issued by the general assembly of the partners for his appointment, the manager shall have full authority in undertaking all works and disposals necessary to achieve the objectives of the company. The managers shall be jointly responsible towards the company, the partners and others for their violation of the rules of the law or the contract of the company, or the error in management according to the rules stipulated upon in the part of the joint stock companies in this law. 106In case the authorities of the company's manager and the controls for exercising his work are not stipulated in the contract of the company, it shall not be permissible for him to undertake the management of another competitor company or which has similar objectives, or to contract with the company that he manages for his account or the account of others, or to practice an activity of a similar activity of the company for the account of others except if it is with an authorization issued by the general assembly of the partners. 107In case the number of the partners is more than seven, it shall have to be designated in the company's contract the establishment of a control board from others than the managers in the company whose number shall not be less than three who are selected from among the partners for a period that shall not exceed three years which is renewable. The control board shall inspect the books of the company, its documents, and undertake an inventory of the treasury, the stock, the securities and the documents that establish the rights of the company. The Control -board shall have the right to request from the manager at any time to submit reports regarding their management and to monitor the budget, the distribution of profits, the annual report and submits its report in this respect to the general assembly of the partners. The members of the control board shall undertake their work without an offset unless otherwise is provided in the contract of the company or a decision for this is issued by the general assembly. The general assembly may discharge them any time. In case the partners' number does not exceed seven, and the contract of the company does not provide the establishment of a control board, the partners other than the managers shall have the right to control the works of the managers similarly as the active partners in a joint limited company. They shall have the right to view the books and documents of the company. 108The members of the control board shall not be responsible for the works of the managers except if they are aware of the errors committed by them and they omitted to state them in their report which is brought before the general assembly of the partners.

109The contract of the limited liability company shall have to include an auditor or more for the accounts of the company. It shall govern the auditor in respect of his appointment, authorities, responsibilities, defining his wage, his discharge and resignation the rules and regulations stipulated upon as regards auditors in joint stock companies. I 10The executive regulations state the records and books that are prepared at the company's headquarter and data that they include. Every partner shall have the right to view at the headquarter of the company the accounts of the company, and all its deeds, documents and books. It shall be void all conditions or decision in contradiction of this. 111 The limited liability company shall have a general assembly of the partners that shall convene upon the invitation from the manager of the company. The manager of the company may invite the general assembly to convene at any time, and he shall have to invite it to convene upon a request submitted to him by the control board or the auditor or a number of partners that possess no less than the quarter of the company's capital. It shall also be permissible for the Ministry to invite the assembly to convene and attends it at any time in cases when the manager shall have to invite it to convene without undertaking this. It shall govern the procedures for inviting the general assembly of the partners to convene the special rules for the procedures for inviting the general assembly of the closed joint stock company. 112Every partner shall have the right to attend the meeting of the general assembly himself, or through his agent or others than the control members or the manager of the company according to a proxy or a delegation that is issued by the partner himself. Every partner shall have a number of votes that equal the number of shares he possesses in the company. 113The meeting of the general assembly shall not be valid unless attended by a number of partners who owns more than half the capital. The resolutions shall not be valid except with the majority of shares represented in the meeting. This is unless the contract of the company stipulates a greater majority. If the quota is not met during the first meeting, the assembly shall be invited for a second meeting during the ten days following the first meeting, and for the same agenda. This meeting shall be valid whatever number of shares is represented in it. In this case the resolutions shall be issued with the majority of shares represented in the meeting unless otherwise is prescribed by the contract. The manager of the company or the members of the control board shall not have the right to vote on the decisions for the acquittal from responsibility of the financial liability of any of them. 114-

The manager of the company shall have to invite the general assembly to convene its annual meeting within three months from the termination of the financial year. It shall enter in the agenda of the assembly for its annual meeting to view and make decisions regarding the following issues:1- The report of the manager regarding the activity of the company, its financial position for the terminated financial year and the report of the control board if found. 2-The report of the auditor regarding the financial statements of the company The financial statements of the company. The suggestions of the manager regarding the distribution of profits. The appointment of the control board and its discharge if found. The appointment of an auditor for the following financial year and deciding his fees. 7- Any other issues considered by any other parties which may have the right to request the convention of the assembly's meeting and entering them in the agenda, 115 It shall govern the extraordinary general assembly the rules relating to the general assembly together with taking into consideration the rules stipulated upon in the following article. 1 16The convention of the extraordinary general assembly shall not be valid except if attended by a number of partners who own three quarter of the capital. Its resolution shall not be issued except with the approval of the partners who own three quarter of the capital. 117The extraordinary general assembly shall have the competencies of the following issues:The amendment of the contract of the company. The dissolution of the company and its liquidation. The merger of the company, its conversion or its division, The increase or the decrease of the capital of the company. 5- The discharge of the manager of the company or the limitation of his authority. Taking into consideration the rules for merger, conversion and division, the resolutions of the extraordinary general assembly shall be valid by registering them in the commercial registry, without the need to draft them in an official document. 118It shall be annually deducted a proportion from the net profits of the company to form reserves according to the rules decided in the joint stock company. t Nine The Public Joint Stock Company Chapter One Introductory Rules Article -119-

The public joint stock company is a company which capital is divided into shares of equal value that can be circulated according to the provision in this law. The responsibility of the shareholder shall be limited to the settlement of the value of the share that he subscribed for. He shall not be responsible for the obligations of the company except within the nominal value of shares in which he subscribed. -120It is mandatory that the public joint stock company has a name that indicates its objectives. It shall not be permissible that this name is derived from the name of a natural person except in the following cases:If its objective is to invest a trade mark or a right of the intellectual property rights that is registered under the name of that person. If the company owns a commercial corporation carrying the name of a natural person. 3- If the conversion to a joint stock company is by a company which name includes the name of a natural person. In all cases the name of the company must be followed by the phrase ( a Kuwaiti public joint stock company or the terminology "K.P.J.S.C." pter Two Conditions For The Incorporation Of The Public Joint Stock Company Article -121The contract of the public joint stock company shall have to include the following information:1-The name of the company. The Headquarter of the company The term of the company if found. 4- The objectives for which the company was incorporated. The names of the founders. It shall not be permissible that their number is less than five persons. It shall be exempted from this companies which the state, or the public organizations or corporations establish them. It shall be permissible for them to found it solely or that a lesser number participates in them. The amount of the capital of the company and the number of shares in which is divided the capital. The statement of any non pecuniary share, and all the conditions to provide it, the name of the person that provided it, the pledge and preference rights entailed by this share. The privileges decided to the founders and the reason for these privileges. 9- An approximate statement of the amount of expenses, wages and cost that shall be settled by the company or it is committed to settle them due to its incorporation. -122The founders shall submit an application for the approval on the incorporation of the company. The application must state the name of the person delegated by the founders to

The public joint stock company is a company which capital is divided into shares of equal value that can be circulated according to the provision in this law. The responsibility of the shareholder shall be limited to the settlement of the value of the share that he subscribed for. He shall not be responsible for the obligations of the company except within the nominal value of shares in which he subscribed. -120It is mandatory that the public joint stock company has a name that indicates its objectives. It shall not be permissible that this name is derived from the name of a natural person except in the following cases:If its objective is to invest a trade mark or a right of the intellectual property rights that is registered under the name of that person. If the company owns a commercial corporation carrying the name of a natural person. 3- If the conversion to a joint stock company is by a company which name includes the name of a natural person. In all cases the name of the company must be followed by the phrase ( a Kuwaiti public joint stock company or the terminology "K.P.J.S.C." pter Two Conditions For The Incorporation Of The Public Joint Stock Company Article -121The contract of the public joint stock company shall have to include the following information:1-The name of the company. The Headquarter of the company The term of the company if found. 4- The objectives for which the company was incorporated. The names of the founders. It shall not be permissible that their number is less than five persons. It shall be exempted from this companies which the state, or the public organizations or corporations establish them. It shall be permissible for them to found it solely or that a lesser number participates in them. The amount of the capital of the company and the number of shares in which is divided the capital. The statement of any non pecuniary share, and all the conditions to provide it, the name of the person that provided it, the pledge and preference rights entailed by this share. The privileges decided to the founders and the reason for these privileges. 9- An approximate statement of the amount of expenses, wages and cost that shall be settled by the company or it is committed to settle them due to its incorporation. -122The founders shall submit an application for the approval on the incorporation of the company. The application must state the name of the person delegated by the founders to

undertake the formation procedures, his profession, his address to which shall be sent the correspondences relating to the incorporation, and the application must be accompanied by the following documents:A copy of the project of the company's contract. If the activities of the company are of those that necessitate the issuance of a law or is issued an approval by any of the control parties, it is mandatory to fulfill this prior to submitting the application. If there are shares in kind, it must be attached with the application what states their evaluation according to article 11 of this law. If the name of the company is derived from a natural person, it must be accompanied with the application what proves that any of the intellectual property rights or the trade marks which the company shall invest are registered in the name of that person, or what indicates that they are owned by a commercial corporation that took his name as a name for it. If the company bears the name of another company, it must be attached with the application what proves that this other company is under liquidation and that it agrees on the naming. If there is among the founders a juristic person, it must be submitted with the application an accredited copy of its incorporation document, and what proves the approval of the competent parties in it to participate in the incorporation. The feasibility study of the project of the company. Any other documents required by the executive regulations. -123The incorporation of the company shall be approved by a decree from the Minister that is issued within sixty days from the date of submitting the application, fulfilling the information and documents that are stated in the precedent article. In case of refusal of the application the decree must be justified and if the ministry does not answer the application within the aforementioned period it shall be similar to refusing the application. The party that its application is refused, can object the decree for refusal before the competent court within sixty days as from the date of notifying him of the refusal of the application, or from the date of the elapsement of the aforementioned date in the precedent paragraph without an answer. The founders shall not have the right to submit an application for the incorporation of the same company another time except after the elimination of the refusal reason. 124An electronic record shall be prepared at the ministry to register the applications for the approval on the incorporation of the public joint stock companies. These applications shall be registered under consecutive numbers. -125The Ministry shall have within a maximum period of one week from the date of issuance of the decree for incorporation to inform the founders by the issuance of the decree. It shall also, during the said period, invite the founders to sign the accredited

contract at the concerned department at the Ministry. A true copy of the original company's contract shall be deposited after its accreditation in the file of the company at the Ministry. 126The company shall acquire the juristic personality as from the date of the issuance of the decree for its incorporation. It is mandatory to undertake the procedures for publishing and advertising both the incorporation decree and the company's contract. It is also mandatory to submit the subscription bulletin as stated in law No. 7 for the year 2010, within thirty days from the date of publishing the decree issued for the incorporation of the company. It is also mandatory to start the subscription procedures within thirty days from the date the Authority approves the subscription bulletin or from the date it is deemed that the bulletin is valid whichever is nearer. 127The founders shall have to subscribe in shares which are not less than ten percent of the issued capital. They have, prior to inviting the public to subscribe, to deposit the required proportions to be paid of the value of these shares at one of the local banks for the account of the company under formation and to submit a certificate for this to the Ministry. It shall be permissible that the executive regulations include the procedures for opening the account of the company under incorporation, the method of depositing the amounts and keeping them, to verily the deposited balance which would make it dispensable the aforementioned certificate in the precedent paragraph. 128The invitation of the public for the general subscription in the shares of the company shall be according to a subscription bulletin that fulfills the information and procedures stipulated in law No. 7 for the year 2010, aforementioned and its executive regulations. The founders shall be jointly responsible for the validity of the information stated in the subscription bulletin. 129The subscription shall be in one bank or more of the local banks in the State of Kuwait or one of the branches of the Kuwaiti banks abroad. The installments that must be paid when subscribing shall be paid at the bank, and it shall be registered what was paid in an account that shall be opened in the name of the company. The subscription door must remain opened for a period of at least twenty one days and not exceeding three months. 130It shall not be permissible for any person to subscribe more than once. The subscription should be effective and not suspended on a condition and seriously. It is prohibited to fictitiously subscribe or to subscribe in fallacious names or to change the truth in the subscription through any method of methods. Without prejudice to the rule of Article 134, of this law, it shall not be permitted to the founders to subscribe in any number of shares in addition to what is stated in the

contract of the company whether directly or indirectly. The founders shall have, prior to the distribution of the shares, to sort the subscription applications meticulously to ascertain the non-occurrence of violations and they shall have to exclude the applications that are in violation of the law. 131 The subscription of the subscriber shall be according to an application signed by him or the person deputizing him. The subscription application must include the name of the company, its objective, its capital, the name of the subscriber, his domicile in Kuwait, the number of shares subscribed for them, the paid installments, and his acceptance of the rules of the company's contract or any other information decided by the Authority. It shall be permissible that the subscription is made by electronic means through mechanisms provided by a clearing agency for its clients that are owners of current accounts, It shall be deemed the use of the subscriber of the name of the user, and his secret number specially of him and delivered to him by the bank or the clearing agency to pass the subscription application electronically as an application for subscription signed by the subscriber. The subscriber shall settle the installments that must be paid in cash in Kuwaiti Dinars, against a receipt signed by the bank in which is stated the name of the subscriber, his domicile, the date of subscription, the number of shares subscribed in them and installments paid. It shall be permissible for the subscriber to settle the installments that are mandatory to be paid by a check or a bank transfer, and the paid amount shall be registered on his account. The subscription shall be deemed final when the subscriber receives the aforementioned receipt or when the amount is registered in his account provided it shall be registered for the account of the company under formation. 132It is mandatory that a printed copy of the company's contract is provided on the electronic site of the company under formation, so as to avail every subscriber to obtain a copy of it. 133The bank keeps all the monies collected from the subscribers for the account of the company under formation. It shall not be permissible to deliver it except to the first board of directors, after returning the amount that exceeds the offered shares according to article 138 of this law. 134In all cases when the subscription does not consume all the offered shares during the original period of subscription, it shall be permissible for the founders to open the door for subscription another period that does not exceed three months. It shall be permissible for the founders in exception of the rules of the second paragraph of article 130 of this law to subscribe in this case. If the subscription does not consume all the shares at the end of the new date, the founders shall have either to retract from establishing the company or decrease its capital. 135-

It shall be permissible for the public joint stock company on its incorporation or when increasing its capital to have an underwriter or more that subscribes in its shares that were not subscribed for. In case no subscription was made for all shares that were offered for subscription during the date decided for it, the subscription underwriter is committed to purchase all that were not taken up by subscribers. He can re-offer to the public the shares he subscribed for them without being tied to the procedures and limitations of the circulation of shares that are stipulated in this law. The executive regulations shall decide the procedures, the positions and conditions for the application of the rules of this article. 136If the founders select to decrease the capital of the company they shall have to submit an application to the Ministry and to declare this to the subscribers. Any subscriber shall have the right to retract from his subscription during a period that does not exceed fifteen days as from the date of the declaration. It shall not be permissible for the Ministry to adjudge the application fro the reduction of capital except after the elapsement of this period. If the proportion of the shares from which the subscription was retracted does not exceed ten percent of the total shares offered for subscription, the subscription shall be considered final. This is unless the capital of the company becomes after its decrease less than the decided minimum limit for the capital of the company. 137In case it is impossible to decrease the capital or the founders select to retract from incorporating the company, the founders must advertise this and refund the paid amounts in full immediately to the subscribers and what it could have materialized of returns. In this case the founders shall bear all the amounts spent in formation works, and they shall be jointly responsible before others as regards works and disposal that they undertook during the formation period. 138If the subscription covers all the shares, the subscription shall be closed at the end of the day on which the subscription is completed. This is provided that it shall not before the elapsement of the original subscription period. If it appears after closing the subscription that it exceeds the offered shares, the shares must be allocated to the subscribers proportionately to their subscription. The distribution shall be to the nearest round figure and the board of directors shall dispose of the fraction of shares for the account of the company. 139It shall be void every subscription that is made in violation of the precedent rules, and it shall be permissible for every person with an interest to hold to this voidness. The case for voidness shall abate with the elapsement of six months as from the date of ending subscription. If the voidness is due to an act that is criminally penalized the voidness case shall not abate except with the abatement of the penal case. It shall be permissible to rule the voindess even if the company is under liquidation.

140The founders shall have within three months from closing subscription to submit to the Ministry a statement with the number of subscribed share, that the subscribers paid the installment that should be paid, the names of the subscribers, their addresses, the number of shares each of them subscribed for, the value of the share and what was paid of its value, and the names of the subscribers whose subscriptions were annulled as a result of sorting subscription applications. The Ministry shall have the right if it found that some of the rules of this law were not complied with as regards subscription or allocation of shares to submit a report in this respect to the constituent assembly in addition to informing the competent parties about the violation occurrence. 141The founders shall have to invite the shareholders to attend the constituent assembly within three months from closing the subscription. If this period elapsed without inviting them, the Ministry shall invite the constituent assembly to convene within fifteen days from the elapsement of the said period. 142The invitation shall be addressed to attend the meeting of the constituent assembly including the agenda, the time and place of holding the meeting through advertising it twice or through any means of the modern media means which are decided by the executive regulations. This is provided that the advertisement in the second time shall be after the elapsement of at least seven days as from the date of publishing the first advertisement and seven days at least prior to the convention of the meeting. The Ministry shall have to be notified in writing about the agenda, the date and the place of the meeting seven days at least prior to the convention of the meeting. This is for the attendance of its representative. The absence of the Ministry's representative after notifying it shall not entail the voidance of the meeting. The meeting of the constituent assembly shall be presided by whoever the assembly elects for this purpose. -143The meeting of the constituent assembly shall not be valid except if attended by shareholders who have the right to vote and that represent over half the subscribed shares. If this quota is not fulfilled the assembly must be invited for a second meeting for the same agenda that shall be held within a period of not less than seven days and not more than thirty days as from the date of the first meeting. The second meeting shall be valid regardless of the number of the attendees. It shall be permissible not to address a new invitation for a second meeting if its date was decided in the invitation for the first meeting. The resolutions shall be issued with the absolute majority of the attending shares in the meeting. 144The founders shall submit to the constituent assembly a report including sufficient

information regarding the incorporation operations, the amounts spent with its sustaining documents. This report shall be put in a place decided by the founders so that the shareholders can view it seven days at least prior to the meeting. This shall be indicated in the invitation to the subscribers to attend the meeting. -145 The constituent assembly shall have the following competencies:To approve the incorporation procedures of the company after ascertaining its validity and their compliance with the rules of the law and the contract of the company. To approve the evaluation of the shares in kind if found, and this shall be according to the stipulation of Article 11 of this law. To elect the members of the first board of directors. To select the auditor and define his fees. To appoint the member of the legislative control authority for companies that works according to the rules of the Islamic Shari'a. To advertise the final incorporation of the company. A copy of the minute of the constituent association's meeting shall be sent to the control parties including decisions made. The Ministry may object any decision if it is in violation of the law or the contract of the company. The objection must be justified and notified to the company within two weeks from the date of notifying the control parties with the minute of meeting. In this case the resolution shall not be valid and the Ministry shall have the right to re-submit the issue to the constituent assembly to correct the violation. The first board of directors shall have to publish the contract of the company and its registration in the commercial registry within thirty days from the date of advertising the final incorporation of the company. -146If it is revealed that the incorporation of the company was undertaken in violation to the rules of the law, it shall be permissible for every concerned party, within ninety days from the declaration date, to warn it to correct the violating procedure. If the company does not initiate within thirty days from the date of the warning the correction procedure, the concerned party may request from the court within thirty days from the termination of the aforementioned period to obligate the company to correct that procedure or the voidness of the company. The court shall have the right to compel the company to undertake the corrective procedure or the voidness of the company if it appears to it the impossibility of correcting the violating procedure. It shall not be permissible for the partners to contest before others with the voidness of the company. In case the judgment of the voidness of the company it shall be liquidated as a de facto company, and the right to raise a lawsuit shall abate if the abovementioned dates are not observed. What is aforementioned in both the precedent paragraphs shall not prejudice the right of those concerned in raising a joint responsibility case against the founder, the members

of the first board of directors and the first auditors. Such a case shall abate with the elapsement of three years as from the date of registering the company in the commercial registry or from the date of the final judgment of the voidness of the company whichever is longer. If the violation constitutes an act that is criminally penalized the responsibility case shall not abate the responsibility case except with the abatement of the penal case. pter Three The Capital Article -147It is mandatory that the capital must be sufficient to materialize the objectives of the company, and the money is Kuwaiti. The executive regulations shall decide the minimum limit of the company's capital according to its kind of activity and what is paid of it on incorporation. 148The company shall have an issued capital representing the subscribed shares in it. The contract of the company may define an authorized capital that shall not exceed ten times the issued capital. 149It shall be permissible by a resolution from the board of directors of the company to increase the issued capital within the limit of the authorized capital provided that the issued capital has been completely settled. 150The capital of the company shall be divided into shares that are equal in value, in a way that the nominal value of the share shall not be less than one hundred Felses, The share may not be divided, but two persons or more may participate in the share provided that only one person shall represent them before the company. The partners in the share shall be jointly responsible for the obligations entailed on this ownership. The shares shall be issued in nominal value and it shall not be permitted to issue them for a lesser value. 151Taking into consideration the minimum limit of the nominal value of the share that is decided in the previous article, it shall be permissible for the company that distributed profits for two consecutive years, after obtaining the approval of the authority, to issue a resolution from the extraordinary general assembly to divide the one share of its share into several shares. This all shall be according to the conditions and controls prescribed by the executive regulations. 152The value of the share shall be either settled in full or by installments. It is not permissible that the installment which is mandatory to settle on subscription be less than twenty five percent of the nominal value of the share. The balance of the share's value shall be settled within a maximum period of five years as from the date of the registration of the company in the commercial registry, on the dates decided by the board of directors.

153It shall be permissible that the contract of the company provides for some privileges for some kind of shares when voting or regarding profits or the results of the liquidation or others, provided that the same category shares are equal in rights, privileges or limitations. It shall not be permissible to amend the rights or privileges or limitations relating a type of shares except by a resolution from the extraordinary general assembly and with the approval of the two thirds of the holders of the kind of share to which is related the amendment. The Authority shall issue the conditions and rules for issuing preference shares and their conversion to ordinary shares, the conditions and procedures for their redemption by the company. The Authority shall also issue the conditions and rules for the circulation of the preference shares. 154The securities issued by the public joint stock company shall be governed by the system of the central deposit of the securities at a clearance agent. The receipt for the deposit of the securities at the clearance agent shall be considered a document for the ownership of the paper, and every owner shall deliver a receipt for the number of securities he owns. 155If the shareholder is in default of settlement of the due share installment on its maturity date, the company shall have after the elapsement of fifteen days from warning him to offer his share for sale in the stock exchange. The company shall settle from the sale price of the share with a priority over all the shareholder's creditors, the value of the installments that were not paid, the interest, and the expenses which the company could have incurred. The balance shall be returned to the shareholder. But if the sale price of the share is not sufficient the company shall recourse to the shareholder with the balance in his private monies. 156The company shall have a special record that is kept at the clearance agency, in which is registered the names of all the shareholders, their nationalities, domiciles, number of shares owned by each of them, their kinds, and the value paid for each share. It shall be marked in the shareholders register any changes occurring on the information recorded in it according to what is received by the company or the clearance agency of information. Every party that is concerned shall have the right to request from the company or the clearance agency to provide him with the information from this record. pter Four Amendment Of Capital Article -157It shall be permissible according to a resolution issued by the extraordinary general assembly, after the approval of the control parties, to increase the authorized capital of the

company. This shall be according to a justified reason from the board of directors and a report from the auditor in this respect, provided that the issued resolution for the increase of capital shall include the amount and method of increase. 158It shall not be permissible to increase the authorized capital unless the original value of the share was fully settled. The extraordinary general assembly may delegate the board of directors in specifying the date of its execution. 159The capital increase shall be covered by shares which value shall be settled by one of the following methods:To offer the shares for increase for public subscription. To convert monies from the optional reserve or from the held profits or from the excess over the minimum limit for the legal reserve to shares. To convert a debt on the company or bonds or deeds to shares. To submit a share in kind. To issue new shares that are allocated to enter a new partner or partners that are brought by the board of directs and the extraordinary general assembly endorses them. Any other means organized by the general assembly, In all cases the nominal value of the increase shares shall equal the nominal value of the original shares. 160If it is decided the increase of the capital through offering shares to public subscription the shareholders shall have the priority in the subscription of the new shares proportionately to what each of them possesses of shares. This shall be within fifteen days from notifying them with this unless the contract of the company includes a provision necessitating the assignment of the shareholders in advance to their rights in the subscription priority. It shall be permissible for the shareholder to waive his priority right to another shareholder or others against or without a material offset according to what is agreed upon between the shareholder and the transferee. The executive regulations shall state the information, the notification procedures and the assignment. 161In case the shares for the increase of capital are offered for public subscription the invitation of the public for subscription in the shares of the company shall be according to a subscription bulletin that includes the information, and fulfilled the procedures stipulated upon in the aforementioned law No. 7 for the year 2010. 162If the shares for the increase of the capital are not covers it shall be permissible for the extraordinary general Assembly to decide either to retract from increasing the capital or to suffice with the amount that was subscribed for.

The executive regulations state the procedures that are mandatory to undertake in this respect. 163It shall be permissible for the extraordinary general assembly to decide to add a premium on share to the nominal value of the new shares, that shall be allocated for the settlement of the issuance expenses and then it shall be added to the reserve. The executive regulations shall prescribe the conditions and the standards for defining the amount of the premium on share. 164The extraordinary general assembly shall have the right, if the contract of the company authorizes it, to decide the preference of the shares for increase, and it is mandatory that the decision includes the kind of preference granted to shares. 165If the shares of the increase of the capital are against the provision of a share in kind, it shall have to be valued according to the rules of Article 11 of this law. The extraordinary general assembly shall act similarly as the constituent assembly in this respect. 166In case of covering the increase of capital through transfer from the optional reserve or from the held profits or the excess over the minimum limit of the legal reserve, the company shall issued bonus shares in the nominal value without a premium on share. These shares shall be distributed on the shareholders proportionately to what each of them possesses in the capital. 167In case of covering the increase of capital through the conversion of a debt on the company or bonds or deeds to shares, it shall be undertaken in this respect the rules provided in this law and its executive regulations. 168The extraordinary general assembly, shall have the right, upon a justified proposal from the board of directors, to decide following the endorsement of the Authority the decrease of the company's capital and this shall be in the following cases:If the capital exceeds the requirements of the company. If the company is inflicted with losses that cannot be covered by the profits of the company. 3- Any other cases that are defined by the executive regulations. 169If the decision for the decrease is due to the excess of capital over the requirements of the company, it is mandatory that the company, prior to executing the decrease resolution, to settle the current debts and to provide sufficient guarantees to settle the long term debts. It shall be permissible for the creditors of the company in case of non settlement of their current debts or the non sufficiency of guarantees for long term debts, to object the resolution for decrease before the competent court according to what is decided by the

executive regulations in this respect. -170The capital shall be decreased according to one of the following methods:The decrease of the nominal value of the share for not less than the decided minimum limit. To annul a number of shares with the value of the amount decided to decrease from the capital. 3- The company purchases a number of its shares for the amount it requires to decrease from the capital. The executive regulations shall state the special procedures for the decrease of the capital in every case. pter Five Disposing Of Shares And Their Circulation Article -171It shall not be permissible for the founders to dispose of their shares except after the elapsement of two financial years at least from the date of registering the company in the commercial registry. It shall be exempted from this, the disposal that is undertaken by one of the founders or his heirs to one of his relatives till the second degree or to another founder, or to the syndic or the state or one of the corporations or public organizations to others. It shall be void any disposal in violation and every party of concern shall have the right to hold to this voidness, and the court shall by itself judge it. -172It shall not be permissible for the shareholders to dispose of their shares except after the company issued its first balance sheet for the twelve months at least. It shall be exempted from this the disposal by one of the shareholders or his heirs to one of his relatives till the second degree or to another shareholder or to the syndic or the state or one of the corporations or public organizations to others. It shall be void every disposal that is in violation of this and every party of concern shall have the right to hold to this voidness, and the court shall judge it by itself. -173 The circulation of shares shall be governed by the rules of Law No. 7 for the year 2010 that is aforementioned, and what the Authority is issuing of rules in this respect. -174It shall not be permissible to impound the assets of the company to settle debts entailed in the financial liability of one of the shareholder. But it shall be permissible to impound the shares of the debtor and the dividends of these shares. It shall be marked on the share in the shareholder register, and the shares shall be sold even if the impounding creditor does not provide the original receipt especially for its deposit. The clearance agency shall be committed to undertake the necessary amendment in the shareholder register according to the results from the sale procedures. It shall be permissible to pledge the shares even if they have not been fully paid. The

pledge shall be registered in the shareholder register in the attendance of the mortgagor and the mortgagee or who deputize them. It shall be permissible for the debtor to waive his right to the creditor on mortgage to attend the general assemblies of the company and to vote in them. Both the impounder and the mortgagee shall be governed by all the resolutions of the general assembly similarly as they govern the shareholder whose shares are held or the mortgagor. 175It shall be permissible for the company to purchase its shares for its own account in the following cases:This is for the purpose of safeguarding the stability of the share's price, and to the extent that it shall not exceed the proportion which is decided by the control parties of the total shares of the company. The decrease of the capital. The company fulfills a debt against these shares. Any other cases which are decided by the Authority. The purchased shares shall not enter in the total shares of the capital in cases which requires that the shareholders possess a certain proportion of the capital, and in special issues by computing the necessary quota for the validity of the general assembly meeting, and the voting on the resolutions of the general assembly. The Authority shall issue a decree to organize the purchase operation of the company to its shares, how to use them and dispose of them. 176It shall be permissible for the company. After obtaining the approval of the extraordinary general assembly, to refund the nominal value of some of its shares to the shareholders, and this value shall be withdrawn from the undistributed profits, and the optional reserve of the company. The owners of the redeemed shares shall be granted preference shares that shall have all the rights decided for ordinary shares except recovering the nominal value on the liquidation of the company. 177It shall not be permissible to create formation shares. It shall be permissible according to a resolution issued by the extraordinary general assembly to create profit- shares against amounts that are provided without interest to the company after its incorporation. The owner of the profit-share shall not be a partner in the company, and shall not enjoy any right of the rights of the shareholders during the existence of the company or when liquidating it except the profit-share decided for him. He shall be governed by the resolutions of the general assembly of the company regarding annual accounts for profits and losses. The executive regulations shall prescribe the method of handling and annulling these shares. pter Six Bonds And Deeds

Article -178It shall be permissible for the company to obtain a loan against the issuance of bonds that can be circulated, which are delivered to the subscribers against the amounts they loaned to the company. The company may, according to its purposes, issue deeds that can be circulated according to all formulation of contracts that are compatible with Islamic Shari'a rules. The bonds or deeds shall be nominal, or for the holder and with a value or of one category of issuance. The bonds or deeds of the same issuance shall give equal rights for their owners before the company. It shall be void any condition to the contrary of this. 179The bonds shall give the right to their owner the right to recover the amount of a debt which is the fulfillment of a determined return that is paid on decided dates. It shall be permissible for the company to issue bonds which return is a share in the annual profits which the company materializes. The deeds shall give their owner the right in his share of the profits of the deeds' assets, and to recover the value of his share in these assets. It shall be permissible for the company to issue deeds which returns shall be a share of the annual profits which are realized by the company and without contradictin g the Islamic Shari'a rules. 180It shall not be permissible for the company to issue bonds or deeds except after the fulfillment of the following conditions:That the issued capital of the company is fully paid up. That the extraordinary general assembly issued a resolution for the issuance of bonds or deeds. 3- That a decree from the Authority is issued with the approval on issuing the bonds or deeds, and it must be obtained the approval of the Central Bank of Kuwait as regards bonds or deeds which are issued from the banks and companies which are subject to the control of the Central bank of Kuwait. It shall be permissible for the Authority or the central Bank of Kuwait to decide the amount with which it shall issue the bonds or deeds for a certain company and according to a certain issuance. In case of refusal the decree must be justified. 181 The total value of bonds or deeds issued by the company shall not exceed the issued capital that is completely paid up. It shall be exempted from this the bonds or the Deeds that are guaranteed by the State of by one of the public organizations or institutions, or which are issued by the banks and financing companies. 182The company shall have to cover the value of the bonds or deeds through one of the two means:1- Offer the bonds and Deeds in a public or private tender and it shall be followed in this respect the rules and regulations decided for subscription in shares in a way that

shall not conflict with the nature of the bonds or the Deeds. 2- To sell the bonds or deeds through the banks and investment companies and subscription underwriters according to the rules and procedures set forth by the Authority. The invitation for subscription in the bonds or deeds shall be according to a subscription bulletin that fulfilled the data and procedures stipulated in law No. 7 for the year 2010. If it is covered fifty percent or more of the bond or the Deeds offered for subscription during the decided period or any other period in which subscription is extended it shall be permissible to consider that the subscription is completed, unless the extraordinary general assembly decides to retract from issuing bonds or deeds and refund the monies and their return to the subscribers if found. It must be stated in the receipt of the deposit of bonds or deeds the following data:The name of the issuing company, its registration number in the commercial registry, and it's headquarter address. The capital of the company. 3- The total amount for th.e bonds or deeds. 4-The name of the bond or the Deeds' owner if the bonds are nominal. The nominal value of the bond or the debenture and its number. The price of return, and the dates decided for its payment, or the annual share decided for the bond or the debenture from the profits of the company. The guarantees submitted as a warranty for the bond or the debenture if found. The conditions and the dates for the redemption of the bonds or deeds. 9- If the bonds or deeds are convertible to shares it shall be stated the dates decided for the use of the bond or the Deeds owner, his right of conversion and the basis and conditions according to which the conversion is undertaken. 185In case of violation of the decided conditions or procedures in this law regarding the issuance of bonds, Deeds and subscription in them, every party concerned shall have the right to require from the court to annul the subscription and to obligate the company to refund the value of the bonds or deeds and their returns if found, in addition to claiming indemnity for what could have been inflicted on him of harm. -186It shall be permissible for the company to issue bonds for which subscription is for less than their nominal value. The company is committed to settle the nominal value of the bond and the calculation of the decided returns shall be on the basis of this value for the subscriber. The Deeds shall have to be issued in all their types according to the Islamic Shari'a rules, and a legislative control organization must endorse them. The Deeds shall be issued relying on a contract with the ownership of leased assets, or

the ownership of property or (Salam) or Istisna'a (a party undertakes to produce a specific thing) or partnership or Murabahah which is often referred to as 'cost-plus financing", or the benefits of property and services that are described in the disclosure or others. The Authority shall set forth the rules for every type of Deeds, and rules that govern the assets of Deeds s, the method of acquiring them, their management, their liquidation and the distribution of the results of the liquidation., the control and inspection of the parties which manages the assets of the Deeds, and their commitment as regards divulgence, risk policy and others of commitment. It shall be exempted from charges the operations of transferring the necessary assets to issue the Deeds. FootNote Salam - e.g. An owner of an agricultural land gets paid for the crop before planting. 187The company shall have the right to issue bonds or deeds that are convertible to shares by a resolution from the extraordinary general assembly upon the justified proposal of the board of directors. This shall be according to the following controls and rules:To define the rules on which basis the bonds or deeds shall be converted to shares and especially the value of the share on which basis the conversion shall be undertaken. That the issue price of the bond or the Suk shall not be less than the nominal value of the share. That the value of the bonds or the Deeds which are converted to shares in addition to the value of the company's shares shall not exceed the authorized capital. The period during which it shall be permissible to request the conversion of bonds or deeds to shares. 5- The right of the owner of the Bond or the Deeds to recover the value if he does not desire to convert them to shares. 188 The shareholders of the company shall have the priority to subscribe in the bonds or deeds that are convertible to shares if they express their wished for this during a period that shall not exceed fifteen days as from the date of inviting them to use this right. It shall be permissible for the shareholder to use his right of priority in the subscription for these bonds or deeds that shall exceed the proportion of his subscription in the company's capital if the conditions of subscriptions shall allow this. 189The owners of bonds or deeds that wish to convert them to shares shall have to express their desire within the period stipulated in the resolution for the issuance of bonds or deeds that are stated in the subscription bulletin. The bonds and Deeds shall be converted to shares according to the basis and condition for which was issued the resolution of the extraordinary general assembly that was declared in the subscription bulletin. The company shall fulfill the value of the bonds and Deeds which the owners do not desire to convert them to shares on their maturity date.

190It shall not be permissible for the company, after the issuance of the resolution of the extraordinary general assembly to issue bonds and Deeds that are convertible to shares, and till the date of their conversion or settlement of their value, to distribute bonus shares or profits from the reserve or issue new bonds and Deeds that are convertible to shares except after the obtainment of the approval of the holders of bonds or deeds. 191If the resolution of the extraordinary general assembly for the issuance of new bonds and Deeds that are convertible to shares includes the annulment of the priority of the shareholders in subscription, it is mandatory to obtain the approval of the corporation for the holders of bonds or deeds. 192It shall not be permissible for the company after the issuance of the resolution of the extraordinary general assembly to issue bonds and Deeds that are convertible to shares and till the date of their conversion or the settlement of their value to decrease its capital or to increase the proportion decided to distribute as a minimum limit of profits on the shareholders. It shall be exempted from this the decrease of the capital due to losses. In this case it is mandatory to decrease the rights of the holders of the bonds or Deeds to convert them with a similar proportion of the decided proportion to decrease the capital. This shall be without the need to obtain the approval of the holders of bonds or deeds corporation. 193The shares which the owners of bonds and Deeds obtained, due to the conversion their bonds or deeds, shall have a share in the profits that are decided their distribution for the financial year during which such conversion occurred. 194It shall be permissible for the company to issue bonds or deeds which their holders shall have the subscription priority in any increase in the capital. This shall be undertaken for the person who desires this during a period that shall not exceed fifteen days as from the date of declaring this to the holders of bonds or deeds. The priority shall be limited on the subscription in shares which nominal value shall not exceed the value of the bonds or deeds that the person who uses this right owns. 195In case the company issues secured bonds or deeds by a mortgage on its assets or others of guarantees, it is mandatory to finalize the legal procedures regarding the mortgage or the guarantee for the interest of the corporation of the holders of bonds and Deeds, or an investment secretariat that represents it. This shall be prior to offering the bonds or deeds for subscription. The company or the party that provided the guarantees shall undertake these procedures. The company shall have within a period that does not exceed one month from the termination of the period that is decided for subscription to undertake the necessary to mark on the margin of the mortgage's registration the total amount that the bonds or deeds

represents or any other information relating to them decided by the Authority. 196If the value of the bond or the Deed was paid up in full on subscription, and the subscriber did not answer the invitation addressed to him by the company to pay the balance on its maturity, it shall be permissible for the company to sell the bond according to the rules of Article 155 of this law. 197It shall be permissible to issue bonds with a remuneration to be paid on the redemption of the bond or the settlement of its value. -198The company is committed to settle the value of the bonds or deeds according to the conditions set forth on issuance. It shall not be permissible to advance or to delay the maturity date, unless otherwise is provisioned in the resolution for the issuance of bonds or deeds and the subscription bulletin or an approval is issued by the body of the holders of bonds. In case of dissolution of the company for a reason other than merger, the holders of bonds or deeds shall have the right to request the payment of their value prior to the maturity date. It shall also be permissible for the company to offer them this. In case of the payment of the bond's value in either of the two cases, the returns shall lapse for the remaining period for the bond. 199The circulation of bonds or deeds shall be governed by the rules of Law No. 7 for the year 2010, that is aforementioned and what the Authority issued of rules in this respect. It shall be permissible to pledge the bonds or deeds and to impound them according to the similar procedures stipulated upon in this law regarding shares. 200The company shall have the right to accept its loans' bonds or the Deeds that finance it to settle debts on it even if this was prior to the maturity date of these bonds or deeds, and the company shall have the right to re-offer theses bonds or deeds for subscription unless this is prohibited by a provision in the contract of the company or these bonds or deeds were recovered in execution of a commitment that compels the company to recover them. The offer of the recovered bonds or deeds for subscription anew according to the rules of the previous paragraph shall not be deemed a new subscription; they shall be similar to the subscribed bonds or deeds of the group in which they were issued. 201The company shall have a special record that is kept at the clearance agency, in which is registered the names of all the holders of bonds and Deeds, their nationalities, domiciles, number of bonds and Deeds owned by each of them unless they are for holder-the kind of bonds and Deeds, and the value paid of them It shall be marked in the register any changes occurring on the information recorded in it according to what is received by the company or the clearance agency of information.

Every party that is concerned shall have the right to request from the company or the clearance agency to provide him with the information from this record. -202It shall be constituted a corporation of the holders of bonds or deeds especially for each issue to protect the joint interests of its members. It shall have a legal representative from among its member or selected from others. It is conditioned that the representative of the corporation for the holders of bonds or deeds shall not have a direct or indirect interest with the company. The company shall have within one month from the termination date of subscription for bonds or deeds, to invite the corporation for the holders of bonds or deeds to approve its own statute arid to elect or select its representative. The invitation shall be through publication and advertisement. In case the company does not invite the corporation for the holders of bonds and Deeds for a meeting within the aforementioned period in the precedent paragraph, every party concerned shall have the right to request the corporation to meet and this shall be within a period that does not exceed fifteen days as from the date of submitting the application. 203The corporation of the holders of bonds or deeds shall hold its meetings upon the request of its representatives, or upon the invitation of the board of directors of the company, or upon the request of a team of holders of bonds or deeds that represent five percent of its value at least, or upon the request of the corporation. The invitation shall be by advertisement that includes the agenda provided that the advertisement shall be at least two weeks prior to the decided date of the meeting. 204The decision of the corporation for the holders of bonds or deeds shall not be legal unless the meeting is attended by a number which represents third of the issued bonds or deeds. In case this quota is not completed, the corporation for the holders of bonds or deeds shall address an invitation for a second meeting with the same agenda within seven days from the date of the first meeting. It shall suffice in the second meeting the attendance of those representing third of the bonds, and the decisions shall be made with the majority of the two thirds of the attendees' votes. However, every decision made that extends the settlement of the bonds or deeds or decrease the returns or the debt's capital or decrease the insurances or touch the rights of the holders of bonds or deeds shall not be permitted except with the attendance of those that represent two thirds of the issued bonds or deeds. The decisions of the holders of bonds or deeds shall govern the absentees and the violators of the attendees. 205The representatives of the corporation of the holders of bonds and Deeds shall have the right to attend the general assembly of the company. The company shall have to address to them the same invitation addressed to the shareholders, they shall have the right to participate in the discussions without having a casting vote.

206It shall be permissible for the representative of the corporation of the holders of bonds or deeds to undertake all reservation arrangements to maintain the rights of the holders of bonds or deeds. 207The party that objects to give the substitute of the lost or damaged bond or deed, shall have to raise a case before the court of jurisdiction within fifteen days from his objection otherwise it shall be deemed as non existent. The court shall have to adjudge the case expeditiously, and the issuance of the new bond or deed shall be suspended till the adjudgment of the case with a final ruling. pter Seven The Rights And Obligations Of The Shareholders Article -208The founders and the shareholder shall be deemed members of the company; they enjoy equal rights and abide by the same obligations together with taking into considerations the rules of the law. 209The member of the company shall specially enjoy the following rights:To receive the profits and obtain the bonus shares that are decided their distribution. To participate in the management of the company through membership of the board of directors and to attend the general assemblies and participate in their deliberations and this shall be according to the rules of the law and the company's contract. It shall be void every contradicting provision in the company's contract. To obtain seven days at least prior to the meeting of the general assembly the financial statements of the company regarding the terminated accounting period, the report of the board of directors and the report of the auditor. To dispose of shares he owns, the priority in subscription regarding the new shares, bonds and Deeds according to the rules of the law and the company's contract. 5- To obtain a quotient of the assets of the company on liquidation after the settlement of its debts. 210The member in the company shall be specially committed with the following:To pay the due installment of what he owns of shares on their maturity dates, and to settle the indemnity for delay in settlement, To settle the expenses which the company incurred to settle the unpaid installments of his shares' value. The company shall have the right to execute on the shares to fulfill its rights. To execute the resolutions issued by the general assembly of the company. To abstain from any work that leads to damage the financial or moral interests of

the company and to commit to indemnify the damages arising from violating this. 5- To follow the rules and procedures which are decided regarding the circulation of shares. -211It shall not be permissible for the general assembly of the shareholders to undertake the following:To increase the financial burden of the shareholder or to increase the nominal value of the share. To decrease the percentage that is mandatory to distribute of the net profits on the shareholders and which is decided in the contract of the company. 3- To impose new conditions other than the stated conditions in the contract of the company relating to the right of the shareholder to attend the general assemblies and to vote in them. However, these rules may be overstepped by the acceptance of all the shareholders whether in writing or majority of votes in which participates all shareholders and following the agreement of the corporation, and the fulfillment of the necessary procedures to amend the contract of the company. pter Eight The Management Of The Public Joint Stock Company A- The Board of Directors Article -212A board of directors shall assume the management of the company and the contract of the company and shall state the method of its incorporation, the number of its members, the duration of its membership. The number of its members may not be less than five and the membership period in the board shall be for three years that is renewable. If is not possible to elect a new board of directors on the decided date, the current board shall continue to manage the works of the company till the elimination of the reasons and the election of a new board. The shareholders shall elect the members of the board of directors by secret ballot . It shall be permissible that it is conditioned in the contract of the company to elect a number not exceeding half the members of the first board of directors from among the founders of the company. The board of directors shall elect through a secret ballot the chairman of the board of directors, and a deputy-chairman. The chairman of the board of directors shall represent the company in its relations with others and before judiciary besides the other competencies form among which is the contract of the company. His signature shall be considered as the signature of the board of directors in the relation of the company with others. He shall have to execute the resolutions of the board, to be bound with its recommendations and the deputy-chairman shall substitute the chairman in his absence or

if a hindrance arises that prevents him form exercising his competencies. The company shall have an executive president that is appointed by the board of directors from others than the member of the board who shall be assigned to manage the company. The board shall decide his appropriations and his competencies in signing on behalf of the company. -215The board of directors shall have the right to practice all works that the management of the company necessitates according to its objectives. This authority shall only be limited by what is provided by the law or the contract of the company or the resolutions of the general assembly. It shall be stated in the contract of the company the extent of the board of directors' authority to obtain loads, to mortgage properties of the company, to contract bails, and also arbitration reconciliation and donations. 216The board of directors shall have the right to distribute work between the members according to the nature of work of the company. Also, the board may delegate one of its members or a committee from among its members or one of the others to undertake a certain job or more or to supervise one aspect of the aspects of the company's activities or to practice certain authorities or the competencies assigned to the board. -217The concerned control parties shall set forth the rules for corporate governance that are abiding to its control in a method that guarantees the sound management of the company to materialize the best possible returns for the shareholder, and which take care of the rights of the minority, control and transparency, and non conflict of interests. The rules shall also state the conditions which must be met by the independent members in the board of directors. 218The control parties shall have the right to obligate the companies under its control that among the members of the board of directs shall be one or more of the independent members of expertise and qualifications that are elected by the general assembly and their remunerations shall be decided according to the governance rules. This is provided that their numbers shall not exceed half the members of the board. It shall not be conditioned that the independent member is from the shareholders of the company. 219Every shareholder, whether a natural or juristic person, may appoint representatives for him in the board of directors of the company proportionately to what he owns of shares in it. The number of the selected members of the board of directors shall be deducted in this way from the total number of the board of directors which are elected. It shall not be permissible for the shareholders who have representatives in the board of directors to participate with the other shareholders in electing the remaining members of the board of directors, except within the limit of what exceeds the used proportion to appoint their representatives in the board of directors. A group of shareholder may ally among

themselves to appoint a representative or more for them in the board of director and this shall be proportionately to their combined ownership. These representatives shall have the rights and duties of the elected members. The shareholder shall be responsible for the works of his representative before the company, its creditors and shareholders. 220It shall revert to the public institution, public organization and companies fully owned by the State, the amounts due for its representation in the board of directors of the companies in which it participates. The chairman of the board of the company shall have to settle these amounts directly to the said bodies within a week from the date of their maturity. These bodies shall have the right to determine the remunerations and salaries to be disbursed to their representatives in the board of directors of this company. 221 The meeting of the board of directors shall not be valid except if it is attended by half the number of the members provided that the number of the attendees shall not be less than three. This is unless the contract of the company stipulates a greater proportion or number. It shall be permissible to use modern means of communications for a meeting and it shall also be permissible to take decisions by circulation with the approval of all the members of the board. It is mandatory that the board of directors meets six times at least during the one year, unless the contract of the company provisions for more. 222The meetings of the board of directors shall be established in a minute and signed be the attending members and the board's secretary. The member who did not approve a resolution taken by the board shall have to establish his objection in the minute of meeting. 223In case the position of the member of the board of directors is vacant, he will be succeeded by who obtained the highest number of votes of the shareholders who did not win the membership of the board of director. If a hindrance arises he shall be succeeded by the one following him, and the new member shall only complete the period of the person he replaced. If the number of the vacant positions reaches the quarter of the original positions, the board of directors shall have to invite the general assembly to meet in a date two months from the date of the last position vacated. It shall be elected the person to fill the vacated positions. 224The following conditions must be met by the person nominated for the membership of the board of directors:That he enjoys the full capacity for disposal. That he has not been previously convicted in a crime with a penalty limiting his freedom, or a crime of bankruptcy for inadequacy and fraudulence, or a crime of

moral turpitude and breach of trust, or a crime limiting freedom due to his violation of this law unless he was rehabilitated. 3- Apart from the independent members of the board, he must be an owner in his personal capacity or the person he represents is the owner of a number of the company's shares. If a member of the board of directors loses one of the aforementioned conditions or others of the conditions stated in this law or the other laws, his status as member shall be removed as from the date of losing this condition. 225It shall not be permissible for a person, even if he is the representative of a natural or a juristic person to be a member of more than five public joint stock company which headquarters are in Kuwait, nor to be a chairman of the board of directors of more than one joint stock company which headquarter is in Kuwait. The violation of this condition shall entail the voidness of his membership in the companies that exceed the decided number according to the recency of appointment in them and what it entails of effects. This shall be without prejudice to the bona fid others. The violator of this condition shall be committed to refund the company which annulled his membership in it what he obtained of remunerations or privileges. 226It shall not be permissible to any chairman or member of the board of director even if he is the representative of a natural or juristic person, to exploit information that reached him due to his position or to obtain an interest for himself or for others. Also he may not dispose through any kind of disposals of the shares of the company in which he is a member of its board of directors during all the term of his membership except after obtaining the approval of the Authority. The authority shall set forth the rules that organize the handling of the company's shares by the members of the board of directors and the method of disclosing it. 227It shall not be permissible for the members of the board of directors to disclose to the shareholders in other than the meetings of the general assembly or to others what they came to know of the company's secrets due to undertaking its management, otherwise they shall have to be discharged and subject to impeachment regarding the indemnification for the damages resulting from the violation. 228It shall not be permissible for the chairman of the board or for any of the members of the board to combine between the membership of the board of directors of two competitive companies, or to participate in any work that shall compete with the company, or to trade for his account or for the account of others in one of the activity's branches which the company is undertaking, otherwise it shall have the right to claim from him indemnity or to consider the transactions he undertook for his account as if they were for the account of the company, unless this was with the approval of the general assembly. 229-

The contract of the company states the method of deciding the remunerations of the chairman and the members of the board of directors. It shall not be permissible to estimate the total of these remunerations for more than 10% of the net profit after deducting the depreciation, reserves, and the distribution of a profit that shall not be less than five percent of the capital on the shareholders or any higher proportion prescribed by the company's contract. However, an annual remuneration may be distributed which does not exceed six thousand Dinars to the chairman of the board of directors and to each member of the members of this board as from the date of the incorporation of the company till the realization of profits that allow the distribution of remunerations according to the stipulation of the previous paragraph. It shall be permissible according to a resolution issued by the general assembly of the company to exempt the independent member of the board of directors from the high limit of the said remunerations. The board of directors shall be committed to submit an annual report that shall be brought before the general assembly of the company for endorsement provided that it shall include very accurately a detailed statement of the amounts and benefits, and privileges that the hoard of directors obtained whatever are their nature or onymous. 230It shall not be permissible for the person who has a representative in the board of directors, or for a chairman or one member of the board of director or one member of the executive management or their spouses, or relatives of the second degree a direct or indirect interest in the contracts and disposals that are concluded with the company or for its account unless this is with an authorization that is issued by the general assembly. 231Taking into consideration the special rules for banks and companies that permits them to loan, it shall not be permissible for the company to loan on of the members of its board of directors or its executive management or their spouses, or relatives of the second degree, or their affiliated companies. It shall be considered void every loan that is in violation of this. This all shall be without prejudice to the right of the company to claim indemnity from the violator. 232The chairman of the board of directors and its members are responsible towards the company, the shareholders and other for all actions of deceit, misuse of authority and every violation of the law or the contract of the company and error in management. It shall not prevent raising a case for responsibility a poll from the general assembly to release and discharge the board of the directors from liability and it shall not be permitted for the members of the board of directors to vote on the resolutions of the general assembly to release and discharge them from liability, or from responsibility of their management or which is related to a special interest from them or for their spouses or relatives of the first degree or a litigation between them and the company. -233The responsibility stipulated in the precedent article is either a personal responsibility

of a certain member or jointly between all the members of the board of directors. In the latter case all the members shall be jointly responsible to settle the indemnity, except if there a group of them that objected the decision that entailed the responsibility and it stated its objection in the minute. 234The company shall have the right to raise a liability case on the members of the board of directors due to the error from which generated damages to the company. If the company is under liquidation the liquidator shall raise the case. 235Every shareholder shall have the right to raise a liability case on his own on behalf of the company in case the company did not raise it. In this case the company must be litigated to judge for it an indemnity if there is a requirement. And it shall be permissible for the shareholder to raise his personal case for indemnity if the error inflicted him with damage. It shall be void every condition in the company's contract that rules otherwise. 236The liability case shall abate with the lapsement of five years as from the date of holding the general Meeting, which issued its resolution for the release and discharge of the board's liability or the establishment of its error. However if the act was attributed to the members of the board of directors constitutes a criminal offense the case shall not abate except with the abatement of the criminal action. pter Nine B- The General Assembly Article -237The general annual assembly shall convene upon an invitation from the board of directors within the three months following the termination of the financial year. This shall be at the place and time that are designated by the contract of the company. The board shall have the right to invite the general assembly to convene whenever necessity requires this. The board of directors shall have to invite the general assembly to convene upon a justified request by a number of the shareholders who own ten percent of the capital of the company or upon the request of the auditor. This shall be within fifteen days from the date of the request. The party which calls for the meeting shall prepare the agenda. It shall govern the procedures for inviting the assembly, the attendance quota, voting and the rules especially of the constituent assembly. 238The Ministry shall have the right to invite the general assembly to meet in one of the following cases:l- If the board of directors did not address the invitation for the convention of the general assembly for any reason of the reasons in cases when it is mandatory that the board invites the general assembly for convention. 2- If it is apparent for the Ministry the occurrence of violations of the law or of the contract of the company or for any other reason it considers,

3- Upon the request of one of the other control authorities. The Ministry shall substitute the board of directors in undertaking the necessary procedures for holding the meeting, and it shall have to preside the meeting unless the assembly elects one of the shareholders for this purpose. 239Every shareholder whatever is the number of his shares shall have the right to attend the general assembly, and shall have a number of votes that equals the number of votes designated for the same category of shares. It shall not be permissible for the shareholder to vote for himself or for the person he represents in issues that relates to a special interest for him, or a litigation existing between him and the company. It shall be void every condition or decision in violation of this. The shareholder may deputies another person to attend on his behalf according to a special proxy or a delegation prepared by the company for this purpose. It shall be permissible for a person that claims a right on the shares that is in conflict to what is established in the record of the shareholders of the company to go to the judge of temporalis action to obtain a writ to stop the litigated shares from voting for a period decided by the ordering judge or till the ruling of the litigation subject by the competent court. This shall be according to the decided procedures in the civil and commercial procedural law. 240The voting on the nominees for the membership of the board of directors in the public joint stock companies shall be governed by the accumulative voting system, which grants every shareholder a voting capacity for the number of shares that he owns so that he shall have the right to vote with it for one nominee or to distribute them between the nominees he selects without repetition of these votes. 241The meeting of the general assembly shall be presided by the chairman of the board of directors or his deputy or the person that is delegated by the board of directors for this purpose or whom shall be elected by the general assembly of the shareholders or others. -242Taking into consideration the rules of the law and the contract of the company the general assembly shall have the competency in its annual meeting to take the resolutions in issues that enter in its competency, and especially the following:The report of the board of directors regarding the activity of the company and its financial position regarding the terminated financial year. The report of the auditor regarding the financial statements of the company. The report for any violations monitored by the control parties, and for which it imposed penalties on the company. The financial statements of the company. The suggestions of the board of directors regarding the distribution of profits. The release and discharge of the liability of the members of the board of directors. 7- The election of the members of the board of directors or their dismissals, and to

determine their remunerations. To appoint the auditor for the company, to decide his fees or to delegate the board of directors in undertaking this. To appoint the legislative control authority for the companies that are working according to Islamic Shari's rules, and to hear the report of this authority. 10- The report of the concluded transactions or which shall be concluded with parties of relation, the parties of relation shall be identified according to the international accounting principles. It shall be permissible with a decree issued by the general assembly of the company to dismiss the chairman or one member or more of the members of the board of directors or to dissolute the board of directors of the company and elect a new board. This shall be upon a proposal submitted for this by a number of shareholders who own not less that the quarter of the issued capital of the company. On the issuance of the resolution to dissolute the board of directors, and it is impossible to elect a new board during the same meeting the assembly shall have the right to decide either that this board continues to manage the company's affairs till the election of a new board or the appointment of an a temporary administrative committee which basic task shall be to invite the assembly to elect the new board. This shall be within one month from its appointment. The general assembly may not discuss issues that are not listed in the agenda except if they were of the expeditious issues that emerged following the preparation of the agenda or were revealed during the meeting, or if one of the control parties requested this or the auditor or a number of the shareholders who own five percent of the capital of the company. If it is revealed during the discussion the insufficiency of the information relating to some of the presented issues, it is mandatory to postpone the meeting for a period that shall not exceed ten working days if a number of the shareholders that represent the quarter of the issued capital's shares requests it. The postponed meeting shall be held without the need of new invitation procedures. The board of directors shall have to execute the resolutions of the general assembly unless these resolutions are in violation of the law or the contract of the company, or the control parties objected them with a justified decision stating in it the violation aspect, This shall be within fifteen days as from the date of notifying it with the minute of the meeting. The board of directors shall have to bring forward again the decisions which are considered in violation of the law or the contract of the company before the general assembly in a meeting that be invited for its convention to discuss the aspects of violation. The extraordinary general assembly shall be governed by the rules relating to the general assembly together with taking into consideration the rules stipulated upon in the

following articles. 247The extraordinary general assembly shall convene upon an invitation from the board of directors, or a justified request from shareholders who represent fifteen percent of the issued capital of the company, or from the Ministry. The board of directors shall have to invite the extraordinary general assembly to convene within thirty days as from the date of submitting the application. In case the board of directors does not invite the assembly within the period provisioned in the precedent paragraph, the Ministry shall address the invitation for convention of the meeting within a period of fifteen days as from the date of the termination of the period aforementioned in the precedent paragraph. 248The meeting of the extraordinary general assembly shall not be valid unless it is attended by shareholders who represent three quarters of the issued capital of the company. If this quota in not available the invitation shall be addressed for a second meeting that shall be valid if attended by those who represent more than half the issued capital. The resolutions shall be issued with a majority that exceeds half the total of shares of the issued capital of the company. 249Taking into consideration the other competencies which are provisioned by the law the extraordinary general assembly shall have the competency of the following issues:l- The amendment of the contract of the company, The sale of the project for which the company was established or to dispose of it in any other aspect. The dissolution of the company, its merger, its conversion or its division. 4- The increase or decrease of the capital. 250Every resolution issued by the extraordinary general assembly shall not be valid except after the approval of the control parties and the undertaking of the declaration procedures. The approval of the Ministry must be obtained if the resolution is related to the company's name or its objectives or its capital, except the increase of capital through issuing shares against profits materialized by the company or as a result of adding its reserves which may be used for the capital. 251It shall be permissible for every shareholder to raise an action for the voidness of any resolution issued by the board of directors or the general assembly or the extraordinary general assembly that is in violation to the law or the contract of the company if it was intended to harm the interests of the company, and to claim damages when it is necessary. The voidness action shall abate by the elapsement of two months as from the date of the issuance of the assembly's resolution or the knowledge of the shareholder with the

resolution of the board of directors. It may also be objected the resolutions of the general assembly or the extraordinary general assembly when it contains injustice of the minority's rights. The objection shall be by a number of the shareholders of the company, who own fifteen percent of the issued capital of the company, and they are not among those who agreed on these resolutions, This case shall be abated with the elapsement of two months from the date of the assembly's resolution. The court in this case shall have to support the resolutions, to amend or to annul them, or to postpone their execution till an appropriate settlement is undertaken to purchase the shares of the objectors provided that these shares shall not be bought by the company's capital. pter Ten The Accounts Of The Company Article -252The company shall have a financial year that is not less than twelve months which beginning and end shall be designated by the contract of the company. It shall be excluded from this the first financial year as it shall start from the date of registering the company in the commercial registry and shall end on the designated date for the end of the following financial year. The board of directors shall prepare an annual report for the terminated financial year. The executive regulations prescribe this in details. -253 It shall be annually deducted according to a resolution issued by the general assembly upon the suggestion of the board of directors a proportion that is not less than ten per cent from the net profits to form a compulsory reserve for the company. It shall be permissible for the assembly to stop such a deduction if the compulsory reserve exceeds half the issued capital of the company. It shall not be permissible to use the compulsory reserve except for covering the losses of the company or to secure the distribution of profits on the shareholders with a proportion that shall not exceed five percent of the issued capital that was paid in the years when the profits of the company do not allow the distribution of this proportion, and this is due to the non existence of an optional reserve that allows the distribution of this proportion from profits. It is mandatory that it is returned to the compulsory reserve what was deducted from it when the profits of the following years allow this; this is unless that reserve exceeds half the issued capital. -254It shall be annually deducted from the gross profits a percentage that shall be decided by the contract of the company or the board of directors, after taking the opinion of the auditor for the depreciation of the assets of the company or to indemnify the decrease of their value. These monies shall be used for the purchase of materials, machineries, and the necessary establishments or for their reparation. These monies may not be distributed on the shareholders.

255The general assembly shall have to decide the deduction of a proportion of the profits to face the obligations entailed on the company according to the labor and social insurances laws. The contract of the company may provision the establishment of a special fund for the assistance of the company's workers and employees. 256It shall be permissible to annually deduct according to a resolution from the general assembly upon the proposal of the board of directors a proportion that does not exceed 10% from the net profits to form an optional reserve that is allocated for the objective decided by the assembly. 257Taking into consideration the rules included in the contract of the company, it shall be permissible for the general assembly upon the proposal of the board of directors to distribute at the end of the financial year profits on the shareholders. It shall be conditioned for the validity of this distribution that it shall be from real profits and according to the customary accounting principles and that such a distribution shall not touch the paid up capital of the company. pter Eleven The Auditor Article -258Taking into consideration the rules of law No. 7 for the year 2010, that is aforementioned, the public joint stock company shall have one auditor or more that is appointed by the general assembly after the endorsement of the Central Bank of Kuwait as regards companies abiding to its control. It shall be permissible for the founders of the company to appoint one auditor or more till the convention of the constituent assembly. It shall be permissible for the board of directors in exceptional and emergency cases in which the auditor who is appointed by the assembly does not undertake his assignment for any reason of the reasons to appoint who substitutes him provided that such an issue shall be brought up during he first meeting held by the assembly to take a decision in its respect. 259The auditor may not be a chairman or a member of the board of directors of the company which he is auditing its accounts or assigned to undertake any administrative work in it, or a supervisor of its accounts or even a relative of the second degree of the person that supervises the management of the company or its accounts. He may not also purchase the shares of the company which accounts he audits or sells them during the period of auditing or performs any consultation work for the company. -260The auditor shall have the right, at all times, to view all the company's books, records and documents, and to request the information that he considers necessary to obtain them. He shall also have the right to audit all the assets of the company and its liabilities.

Thus in case of not enab[ing him to use these rights he shall have the right to establish this in writing in a report that is submitted to the board of directors and is brought before the general assembly besides notifying the Ministry and the Authority of it. 261 The auditor or who deputized him of the accountants that participated with him in audit works, shall have to attend the meetings of the general assembly and to submit a report about the financial statements of the company, and if these statements show the financial position of the company at the end of the financial year, the results of the work of the company for that year. Also, to state if the information stated in the report of the board of directors are in conformity with the books and documents of the company. This shall be according to the customarily accounting principles and the provisions of the law. If the company has more than one auditor they shall have to prepare a conjoined report. In case of difference between them regarding some issues, this must be established in the report together with stating the point of view of each of them. The report must specially contain the following information:If the auditor obtained the information that he considers necessary for performing his assignment. If the balance sheet and the accounts of profits and losses are in conformity with reality, include all that the law and the contract of the company provision, and truly and clearly express the real financial position of the company. If the company maintains regular accounts. If the inventory was undertaken according to the observed rules. If the information stated in the report of the board of directors comply with what is stated in the books of the company. If there are violations of the rules of the law or the contract of the company that occurred during the financial year, together with stating if these violations are still existent, and this shall be within the limits of information availed to him. 7- Any other information determined by the executive regulations. 262The auditor shall be committed to safeguard during and following the termination of his work at the company the confidentiality of information and data that reached him due to his work. He shall not use these information and date to materialize an interest for himself or for others, and he shall not divulge any secrets relating to the company. If the auditor violates his duties that are aforementioned in the precedent paragraph, he may be discharged and it would be claimed indemnification from him if it is necessary. 263The auditor shall be responsible for the financial information stated in his report and every damage that was inflicted on the company or the shareholder or others due to mistakes he committed during and due to his work. If the company has more than one auditor they shall be jointly responsible except if one of them proves his non participation in the error that is accountable. Also the auditor shall be responsible for the damages inflicted on the company due to

his resignation at an inappropriate time. Every shareholder during the convention of the general assembly shall have the right to discuss the auditor and to request clarification of what was stated in his report. 264The board of directors or a number of the shareholders representing twenty five percent of the issued capital shall have the right to require the substitution of the auditor during the financial year. It shall be void every decision taken regarding his substitution without following the procedures prescribed in the executive regulations. t Ten The Closed Joint Stock Company Article -265The subscription shall be limited in the closed joint stock company at its incorporation to the founders, and except for the rules stated in this part, the closed joint stock company shall be governed by all rules especially of the public joint stock company. 266In others than the commitment and monopoly companies, it shall be permissible without the need of obtaining a decree from the Minister to incorporate the closed joint stock company according to an official accredited document issued by all the founders. The number of founders must not be less than five. This document shall include the contract of the company and the following declarations:That all the founders subscribed in all the shares, and deposited the amount which is mandatory by law to settle of their value in one of the local bank under the disposition of the company. That the shares in kind were evaluated according to the rules of the law and they were fully settled. That the founders appointed the necessary administrative instruments for the company. It shall be kept with the official document a copy of the papers and documents sustaining the aforementioned declarations. In all cases the name of the company must be followed by (A Closed Joint Stock Kuwaiti Company) or the terminology (CJSKC). 267It shall not be established a juristic personality for the closed joint stock company, and it may not start its works except after declaration. 268The invitation shall be addressed to attend the meeting of the constituent assembly including the agenda, the date, and the place of the convention of the meeting through one of the following means:Registered letters sent to all the subscribers two weeks ate least prior to the decided date for the convention of the meeting. Advertisement, the advertisement must occur twice at least provided that the

advertisement in the second time shall be after the elapsement of at least seven days from the date of publishing the first advertisement, and seven days at least prior to the convention of meeting. 3- Delivery of the invitation by hand to the shareholders who legally deputize them one day at least prior to the meeting. It shall be marked on a copy of the invitation an indication of receiving it. The executive regulations may include other means for the convention of a meeting through any means of the modern means. -269With the exception of the companies listed in the stock exchange, the contract of the closed joint stock company may include limiting the right of the shareholder in the disposal of his shares according to the following two limitations or either of them:To condition the priority of the shareholders of the company to purchase the shares which their owner desires to sell. To condition the approval of the board of directs on the buyers of the shares. It shall be exempted from these two limits the disposals referred to in Article 172 of this law. If the contract of the company includes any of these two limits, the company shall not be listed in the stock exchange. -270In case the contract of the closed joint stock company includes a provision for the priority of the shareholders in buying shares, the shareholder shall have before disposal of them to notify the company with the conditions of sale. The disposal of shares shall not be valid except after the elapsement of ten days as from the date of the notification without any of the shareholders submitting a request to purchase the shares. If one of the shareholders comes forward to purchase the shares it shall have to be according to the price stated in the sale conditions. Without prejudice to the special rules regarding the purchase of the company of its shares, if the contract of the closed joint stock company provisions the condition of the approval of the board of directors on the buyer of shares, the board shall have in case of refusing the buyer to purchase the shares for the account of the company within ten days from the date of notifying the board with the approval request. In this case the purchase shall be with the price on which the shareholder agreed to sell his shares. If it is decided the increase of the company's capital, and some of the shareholders did not exercise the right of subscribing for the shares of the capital increase, it shall be allocated some unsubscribed shares for who wishes this of the shareholders of the company. If the subscription requests exceed the number of the offered shares, they shall be allocated on the subscribers proportionately to what the subscribed for. In all cases in which it is not subscribed in all the new shares, the board of directors may allocate the unsubscribed shares to new shareholders. The new shares which are

unsubscribed shall be deemed annulled by force of the law. 273It shall be permissible for the closed joint stock company for which elapsed the special prohibiting period to dispose of its shares by increasing the capital through public subscription, according to a decree from the Ministry that is issued upon the approval of the Authority. It must be obtained the approval of the Central Bank of Kuwait if the company is compliant to its control. The company shall be considered that it converted to a public joint stock company as from the date of the issuance of the decree of the Minister authorizing it to increase the capital through public subscription. In all cases every closed joint stock company that listed its shares for circulation in the stock exchange shall be deemed a public joint stock company as from the date of listing. This rule applies on the closed joint stock company listed in the stock exchange at the time of enforcing this law. t Eleven The Holding Company Article -274The holding company is a company the purpose from its incorporation is the investment in stock shares and shares, or investment units in companies or Kuwaiti or foreign funds, or to participate in the incorporation of these companies, to loan them and guarantee them with others. 275The holding company shall take on of the following forms:The closed joint stock company. The limited liability company. 3- The Sole Proprietorship Company. It must be written the phrase (Holding Company) in all the papers, advertisements, correspondences and the other documents that are issued by it besides its commercial name. 276The holding company shall be incorporated according to one of the following methods:The incorporation of a company whose objectives are limited to any work of the works provisioned for in Article 274. The incorporation of affiliated companies or the ownership of stock shares and shares in companies to undertake these objectives. 3- The amendment of the objectives of an existing company to a holding company according to the rules of this law. 277Taking into consideration what the previous article stipulates, the holding company may undertake all or some of the following activities:1- The management of its affiliated companies or the participation in the

management of the other companies in which it participates and provides the necessary support for them. The investment of its assets by trading in shares and bonds and other securities. The ownership of properties and movables that is necessary to undertake its activity within the allowed limits according to the law. The financing or loaning companies in which it owns stock shares or shares and its security with others. tn this case the proportion of the participation of the holding company in the capital of the loaner (debtor) company shall not be less than twenty percent. The ownership of intellectual property rights of patents, trade marks,, industrial model, privileges rights and other of moral right, to exploit them and to lease them to its affiliated companies or others, whether in Kuwait or abroad. The holding company shall prepare at the end of every financial year a compiled balance sheet and the statement of profits and losses for it and for all its affiliated companies accompanied by clarifications and the decided statements according to what is required by the international accounting standards. The holding company shall abide to the rules of the company that it took its type in a way that does not conflict with the rules of this part. 280In case of insufficiency of the assets of the affiliated company to fulfill its obligations the holding company shall be jointly responsible for the fulfillment of the affiliated company in case any of these cases are materialized:If the holding company and the affiliated company are practicing the activity as one economic unit. If the affiliated company is working as a front for the holding company. 3- If the affiliated company practices the commercial activity as a commercial agency of the holding company. Twelve The Conversion Of Companies,Their Merger, Division And Termination Chapter One The Conversion Of Companies Article -281Taking into consideration the rules stipulated in this law any company may convert from one legal type to another. The conversion shall be by a decree issued in conformity with the rules and procedures decided for the amendment of the company's contract, and it is conditioned that two financial years at least lapsed from its registration in the commercial registry.

The company shall not be converted except after the fulfillment of the incorporation procedures that are decided for the type to which it shall convert, to undertake the procedures for publishing and advertisement, and to prepare a report which shall be accredited by the Ministry and the auditor for the evaluation of the assets and liabilities of the company according to the rules for evaluating shares in kind that is provisioned in the first paragraph of Article 11 herein. The executive regulations shall decide the conversion conditions and procedures. The partner who objects the decision to convert the company may withdraw from the company and recovers the value of his shares or stock shares. This shall be with an application submitted to the company within sixty days from the registration date. The value of shares or stock shares shall be settled with its actual value which is stated in the evaluation report that is provisioned in the precedent article. The conversion of the company shall not entail its acquirement of a new juristic personality. It shall keep what it has of rights and liabilities prior to conversion. As regards the liabilities of the joint partners prior to the conversion of the company,the right of the creditor shall lapse in this guarantee if he does not object on the conversion decision within thirty days from the date of publishing the decision in the official gazette. He shall submit the objection through the usual procedures to raise a law-suit and the plenary court has the jurisdiction to view it. The submission of the objection shall entail the continued liability of the joint partners before this creditor till his objection is adjudged by a final ruling. It shall be permissible for the partners or the shareholders that objected the conversion decision during the aforementioned period in the precedent paragraph to require the withdrawal from the company according to the procedures in Article 281. Every partner shall have in case of conversion a number of shares or a stock share in the company to which it was converted that equals the value of the shares or the stock shares which he had in the company prior to conversion. If the conversion is to a limited liability company and the value of the partner's share or stock share in the company prior to conversion is less than the minimum limit decided for the nominal value of the share in the limited liability company he shall have to complete it in cash. It is conditioned for the conversion of joint stock company that obtained loans through the issuance of bonds to obtain the approval of the body of the holders of bonds on the conversion decision with the majority of those who represent two third of these bonds. If it is not agreed on the conversion, or the settlement which the company offers with the aforementioned majority, the representative of the body for the holders of bonds shall have to raise the issue to the plenary court within thirty days as from the date of the publication of the conversion decision. The raising of the case shall not entail the suspension of the conversion procedures.

The court shall have to rule the refusal of the objection or shall obligate the converted company to settle the value of bonds according to the issue conditions or to obligate the converted company to provide sufficient guarantee to settle their value. ter Two Merger of Companies Article -286It shall be permissible for the company, even if it is under liquidation to merge into another company of the same legal type or of another type. The merger shall be by one of the following methods:To merge through joining and this is by the dissolution of a company or more and transferring its financial liability to an existing company. To merge through combination and this is by the dissolution of a company or more and the incorporation of a new company to which are transferred the financial liabilities of the merging, companies. 3- To merge by division and joining. This is by dividing the financial liability of the company into one part or more and the transfer of each part of them to an existing company. The executive regulations shall regulate the procedures, positions, and conditions of merger together with taking into consideration the rules provisioned in the following articles. 287The merger according to the method of joining shall be undertaken by following these procedures:A decree is issued from the merged company for its dissolution. The evaluation of the net assets of the merging company according to the rules for the evaluation of shares in kind that are stipulated in Article 11 of this law. The merging company shall issue a decree for the increase of its capital according to the evaluation of the merged company. The increase of capital shall be distributed on partners in the merged company proportionately to their shares in it. 5- If the new shares are represented in stock shares, and the decided dates in this law elapsed since the incorporation of the merging company, it shall be permissible to circulate these stock shares upon their issuance according to the decided rules in this law in respect of circulating the shares of the company. 288The merger through combination by undertaking the following procedures:A decree shall be issued by every company of the merged companies for their dissolution. The new company shall be established according to the positions stipulated in this law. However if the new company is of the joint stock companies it shall be taken the report for the evaluation of the shares in kind that is prepared according to the rules of Article 11 of this law without the need to bring the matter before the

constituent assembly. 3- It shall be allocated for every merged company a number of shares or stock shares that equal its share in the capital of the new company, and these shares or stock shares shall be distributed on the partners in every merged company proportionality to their shares in it. If the shares of the new company are represented in stock shares, and it lapsed since the incorporation of the merged companies the dates decided in this law for the circulation of the shares of the company, it shall be permissible to circulate these stock shares upon their issuance. The merger must be declared, and the decree for merger may not be executed except after the laspement of thirty days from the date of its publication in the official gazette. The creditors of the merged company shall have the right to object during the said period on the merger at the company through an official warning. The merger shall remain suspended unless the creditor waive his objection or a final ruling for its rejection is issued or the company settles the debt if it is immediate or through submitting sufficient guarantees to settle it if it is a long term debt and if no objection is submitted during the aforementioned period the merger shall be considered final. It shall be conditioned for the merger of the joint stock company which issued bonds or deeds the approval of the corporation of the holders of bonds or deeds, on the merger decision and this shall be with a majority of those representing the third of the bonds or deeds, otherwise the company shall undertake a settlement of the debt which the corporation of the holders of bonds or deeds accepts with the aforementioned majority. The representative of the corporation of the holders of bonds or deeds shall have the right to object the merger decision according to the rules of the precedent article. 291 Taking into consideration the rules of the previous article, if the joint stock companies entering the merger had issued bonds or deeds convertible to shares, the holders of these bonds or deeds shall have the right to require their conversion to shares in the merging company or the new company according to cases during the period decided for the issuance of bonds and Deeds. The basis of conversion are decided through specifying the decided proportion of exchange in the issuance system in the light of the proportion stated in the merger agreement relating to the conversion of the shares of the company that issued bonds or deeds with shares in the merging company or the new company. 292If the merger leads to the increase of financial burden on the partners or the shareholders or it shall touch their rights in any of the companies entering the merger, the approval of all the partners or shareholders in the company must be obtained on the merger decision. In case of the objection of one of the partners or shareholders on the merger decision, it shall apply in its respect the rules provisioned in Article 282 of this law.

293 In case of merger through joining or combining the merging company or the new company shall substitute the merged company in all its rights and liabilities. In case of merger through division and joining the merging companies shall bear jointly the liabilities of the divided company that were precedent to merger. ter Three Dividing Companies Article -294It shall be permissible to divide the company even if it is under liquidation, into two or more companies and this is with the termination of the company or its remaining in existence. The emerging companies from the division may take any form of the legal forms for the companies. The decision for the division of the company shall be issued by a resolution from the extraordinary general assembly, including the number of the shareholders or the partners, their names, the share of each of them in the companies emerging from the division, the rights of these companies, their liabilities and the method of the distribution of assets and liabilities between them. The executive regulations shall state the procedures, positions and conditions for division. The companies arising from the division shall be the successor of the company subject matter of the division, and it legally substitute it a legal substitution within the limits of what is reverted to it from the company subject matter of the division according to what is contained in the division decision. The creditors of the company and its shareholders shall have the right to object the division decree and they shall be subject to the rules stipulated in Article 289 of this law. It shall be permissible to circulate the shares of any of the companies emerging from the division upon their issuance if the shares of the company subject matter of the division can be circulated on the issuance of the division decision, and the company emerging from the division fulfilled the necessary conditions to circulate shares. ter Four Termination Of The Company And its Liquidation A- Dissolution Of The Company Article -297Taking into consideration the reasons for termination relating to every type of the types of companies, the company is dissolved for one of the following reasons:The expiry of the decided period in the contract of the company unless it is renewed according to the rules stated in the contract or this law. The termination of the objective for which the company was incorporated or it is impossible to achieve it.

The perdition of all the company's assets or most of them in a way that it is impossible to invest the remaining a beneficial investment. The unanimity of the partners to dissolve the company prior to the termination of its term unless the contract of the company stipulates to suffice with a certain majority. The merger of the company into another company. The adjudication of the company's bankruptcy. The issuance of a decree revoking the license of the company for not practicing its activity or the non issuance of its financial statement for three consecutive years. The issuance of a judicial ruling to dissolve the company. The company shall terminate in case the death of one of the partners in the joint liability company or the joint venture company, or one of the joint partners in the commandite (limited partnership) or the commandite by shares, or the issuance of a ruling to limit his legal competencies, or an adjudication of his bankruptcy, and this is unless a provision is stated in the company's contract that allows its continuation between the remaining partners. In all cases of the continuation of the company between the remaining partners it shall be evaluated the share of the partners that withdrew from the company, and its value calculated on the day on which was materialized the reason that led to the withdrawal of the partner from the company according to the rules of evaluating the shares in kind that are stated in the first paragraph of the Article 11 of this law. In exception of the rule of the precedent paragraph, and in other than the joint venture companies it shall be permissible for the inheritors of the deceased partner to continue in the company as silent partners. In this case the joint liability company shall be converted to a company in commandite by the force of the law. The joint liability companies and the companies in commandite shall terminate if the share of one of the partners is impounded and the partners did not accept that the person who offered the best bid joins them as a partner in the company, and the company or the partners have not recovered the share or settled the rights of the impounding creditor. The same ruling shall be valid for the commandite by shares if the shares of the joint partner are sequestered. 300In exception of the joint stock companies it shall be permissible to dissolve the company with a judicial ruling if this is requested by one of the partners for the non fulfillment of a partner of his commitment or for any other reason which the court estimates that it is of a risk that necessitates the dissolution. It shall be void any agreement that shall rule otherwise. 301 If the death, impounding or bankruptcy encompasses all joint partners in the company in commendite or in commendite by shares, it is mandatory to dissolve the company

except if the partners or the shareholders initiate, within six months, its conversion to another type of company. 3 02If the losses of a joint stock company reach three quarter of the paid capital it is mandatory that the members of the board of directors invite the extraordinary general assembly to convene to view the continuation of the company or its dissolution prior to the stated date in its contract, or to undertake others of appropriate arrangements. If the board of directors does not invite the extraordinary general assembly to convene or it is impossible to issue a resolution in respect of the issue it shall be permissible for the Ministry and every concerned person to request from the competent court to dissolve the company. The limited liability company shall not terminate due to the death of one of the partners or the issuance of a ruling to limit his legal competencies, or an adjudication of his bankruptcy unless otherwise is stipulated in the contract of the company. If the losses of the limited liability company reaches three quarter of the paid capital the mangers shall have within thirty days from the reaching of the losses this limit to bring before the extraordinary general assembly the order to cover the capital or to dissolve the company or to undertake other suitable arrangements than these. If the managers omit to invite the partners or it is impossible for the partners to reach a decision in respect of the issue the managers or the partners according to cases shall be jointly responsible for the liabilities of the company that was entailed by their negligence. 305 The sole proprietorship company shall terminate with the death of its owner's capital unless if all the inheritor's shares were compiled in one person or the inheritors select to continue in another legal type. This all shall be within six months from the date of death, Also the company shall terminate with the termination of the juristic person that is the owner of the company's capital. Taking into consideration the rules of Article 297, the professional company shall terminate if the company is limited, for any reason of the reasons, to one partner unless if this partner initiated the entry of another partner or more. Taking into consideration the minimum limit of the number of the partners in the professional company the professional company shall not terminate with the death of one partners or his withdrawal or by losing the capacity to practice the profession. In case of death the share shall not be transferred to the inheritors, and they shall have the right to recover its value according to the rules of the first paragraph of article 11 of this law. It shall be permissible for the partners to agree that the inheritor who meets the conditions of partnership in the company replaces his testator if the inheritor desires to join the company. This shall be without prejudice to all the rights of the remaining

inheritors towards this inheritor. The same rule shall govern in respect of recovering the share in case of the partners loses his capacity to practice the profession. 308With the exception of the joint venture where the termination of the company must be declared, it shall not be contested against others with the termination of the company except as from the declaration date. The managers of the company or the chairman of the board of directors, according to cases, shall follow up the execution of this procedure. iquidation Article -309The company shall be immediately under liquidation upon its dissolution. The company shall keep during the liquidation period the juristic personality with the necessary amount to finalize the liquidation. It is mandatory to add to the name of the company the phrase under liquidation that must be written clearly in correspondences issued by it. It shall be followed for the liquidation of the company the rules stipulated upon in the following article unless otherwise is provided by the contract of the company. The terms of all debts on the company shall lapse as from the date of the declaring the dissolution of the company and notifying the creditors with the opening of the liquidation. The liquidator shall have to officially warn all creditors of the opening of the liquidation together with inviting them to submit their claims. The creditors may be notified by advertisement, and in all cases the notification or the advertisement must include a span for the creditors that is not less than thirty days to submit their claims. The authority of the managers shall end on the termination of the company, but they shall continue managing the company till the appointment of the liquidator and the practice of his authorities. The managers shall be deemed as regards other similar to the liquidators till the appointment of the liquidator. The bodies of the company shall remain existent during the liquidation period and their authorities shall be limited to the liquidation works that do not enter in the competency of the liquidator. 312A liquidator or more shall be appointed from the partners or others, according to the conditions and rules stipulated upon in the contract of the company. If there is no provision in this respect he shall be appointed and his wage shall be decided and the period of liquidation according to the necessary majority for amending the contract of the company. If it is impossible to issue a decision for the appointment of the liquidator, the court shall appoint him upon the request of one of them or one of the company's creditors. The ruling shall have to include the determination of his wage and the liquidation period. 313The liquidators shall be discharged by a decree from the competent body for his

appointment. In all cases it shall be permissible for the court upon the request of one of the partners or one of the creditors of the company for acceptable reasons to rule the discharge of the liquidator. Every decision or judgment for the discharge of the liquidator must include the appointment of who substitutes him. The new liquidator shall have to declare the decision or the judgment that include the discharge and his appointment as a liquidator prior to undertaking his works. 3 14The liquidator shall have to declare the decision issued for his appointment, the limitations imposed on his authority, the agreement of the partners or the resolution of the general assembly regarding the method of liquidation or the judgment issued in this respect. It shall not be contested before others for the appointment of the liquidator or the method of liquidation except as from the date of declaration. 3 1 5The liquidator shall undertake all the works that are necessitated for the liquidation of the company. He shall especially have the following:To represent the company before judiciary and others. To undertake all that is necessary to safeguard the assets of the company and its rights. To settle the debts of the company. To sell the assets of the company whether properties or movables through public tender or bidding or through any other method that guarantees the obtainment of the highest price. This is unless it is provisioned in his appointment decision to undertake the sale in certain method. However, it shall not be permissible for the liquidator to sell from assets of the company except if the liquidation works necessitate it. 5- To divide the net assets between the partners. It shall not be permissible for the liquidator to start new works except if they are necessary to finalize precedent works. Also, the liquidator may not sell the assets of the company or its store as a whole or to reconcile regarding the company rights or to accept arbitration in litigations where the company is a party in except with permission from the court. 316The company shall be committed with all works undertaken by the liquidator in its name or for its account if these were necessitated by the liquidation works and within his authority. If there are several liquidators their actions shall not commit the company except if the decision is taken by absolute majority, unless otherwise is provided in their appointment decision. 3 1 7The managers of the company and its board of directors shall have to submit its

accounts and deliver its books, documents and assets to the liquidator. In case the abstention of any of them from undertaking the above mentioned the liquidator shall have the right to submit an application to obtain a writ on a declaration according to the rules of the civil and commercial procedures to obligate the managers of the company and the members of its board of directors to undertake the above mentioned. The liquidator shall have within three months from undertaking his work to undertake an inventory of the assets of the company and to decide its financial position in a way that shall guarantee its rights and obligations. He shall have the right for this to obtain the assistance of the managers of the company, its board of director and its auditor if found. The liquidator shall maintain the necessary books to record the liquidation works according to the special rules for maintaining commercial books. The liquidator shall have to terminate the liquidation works in the decided period in his appointment decision. If the period is not decided the court shall decide it upon a request from the party that has an interest in this. The period may be extended with the approval of the majority of the partners who own the amendment of the contract of the company or by a decision from the court after viewing the report of the liquidator with the reasons that hindered the completion of the liquidation during decided period, and every party of interest shall have the right to request the court to shorten the liquidation period. If the liquidator estimates that the interest of the company necessitates that it continues in its works till a. certain date, in this case he shall have to invite the general assembly or the partners to meet to decide this issue except if the liquidation of the company was according to a judicial ruling. The appointed liquidator to liquidate the joint stock company shall have to invite the general assembly for a meeting within three months from the end of the financial year to discuss the balance sheet of the terminated year, the auditor's report, the annual report for the liquidation works and endorse them, and the appointment of auditor for the New Year. He shall also have to invite the general assembly at any time if the liquidation works necessitate it. The liquidator shall have to fulfill what the company has of rights with others or the partners, and to deposit the amounts which he collects in one of the banks for the account of company under liquidation. The liquidator shall have to settle the debts of the company, to retain the amount necessary for the payment of the litigated debts, and to settle the debts of the company according to the following order:The financial obligations resulting from the liquidation operations. All amounts due to the employees of the company. 3- Preferential debts according to their order of preferential.

4- Debts secured with in kind guarantees, within the limit of the return that guarantees the debt. The balance of money following the settlement of the aforementioned debts shall be paid to the ordinary creditors. If the balance from the outcome of the liquidation does not suffice to settle all these debts the money shall be divided pro rata between them. Taking into consideration the decided rights of the preferential shareholders, the liquidator shall divide the balance of the company's money after settling its debts between the partners. Every partner shall obtain a share proportionately with the value of his share in capital. If the share provided by the partner is the mere utilization of the asset, the partner shall recover this asset unless destroyed during utilization then he will be reimbursed its value at the time of destruction. If there are assets remaining after that, they shall be distributed among the partners according to the share of each of them in the profits. If the net assets do no suffice to settle the shares of the partners, it shall be deducted from the shares of the partners according to the proportion agreed upon for the distribution of losses. In all cases in which the assets of the company are not sufficient to settle its debts, the liquidator may undertake the procedures decided in the law for the adjudication of the company's bankruptcy. The liquidator shall submit a final account regarding the liquidation of the company and the division of its assets to the general assembly of the shareholders or the partners who possess the right to amend the contract of the company and to divide its assets. The liquidation works shall end with the endorsement of the final account by this assembly. The liquidator shall declare the termination of the liquidation, and it shall not be contested before others the termination of the liquidation except from the date of the declaration. The liquidator shall have to request the erasure of the registration of the company from the commercial registry after the termination of the liquidation. The books and documents relating to the liquidation of the company shall be kept for a period of ten years as from the date of the erasure of the registration of the company from the commercial registry at the place which is decided by the party that appointed the liquidator. The liquidator shall be accountable for indemnifying the damages inflicted on the company or the partners or the others due to exceeding the limits of his authority or due to the errors committed in performing his job. In case of numerous liquidators they shall be jointly responsible. 326-

It shall not be heard the case against the liquidator due to the liquidation works after the elapsement of three years since the declaration of the termination of liquidation. If shall not also be heard after the elapsement of the said period due to works of the company or against the managers or the members of the board of directors or the auditors due to the works of their positions. Thirteen Control, Inspection And Penalties Chapter One Control And Inspection Article -327Without prejudice to the decided competencies for the control parties, the Ministry shall have the right to control the companies and to inspect them on their account regarding everything relating to the execution of the rules of this law and the contract of the company. This is to ascertain their non violation of the rules of the law. It shall have the right to assign an external auditor to the company or delegate another to undertake this. The Ministry shall have to investigate any complaint that is submitted by any party of concern regarding the execution of the rules of this law. If it is revealed to the Ministry the existence of violations of the rules of this law or the contract of the company, or those undertaking the management of the company, or its founders made disposals that harm the interests of the company or the partners or the shareholders or the national economy, it shall have to invite the general assembly or the partners meeting to correct these violations within fifteen days as from the date of the meeting convention, and to notify the competent investigation authorities with this, The executive regulations state the control and inspection procedures, the method of submitting complaints by those concerned. It shall be permissible for the shareholders or the partners who own five per cent at least of the capital of the company to apply to the Ministry to appoint an auditor to undertake inspection of the company as regards what they attribute to the manager or the members of the board of directors or the auditor, or the executive manager of the company of violations in the performance of their duties whenever they have reasons justifying this application. This shall be after the settlement of the charges which are decided by the executive regulations. The applicants shall be committed to settle the cost of the auditor. 330If it appears to the Ministry, or any of the control parties, from the inspection that what was attributed to the members of the board of directors, the auditor, the manager or the executive manager is untrue, it may publish the total or part of the inspection report in two daily newspapers and the electronic site of the company on the cost of the inspection's applicants. This shall be without prejudice to their responsibilities for indemnification if necessary.

331 If the Ministry rejects the application of the shareholders or the partners to undertake the inspection of the company, aforementioned in Article 329 of this law, it shall be permissible for those whose application was rejected to submit a declaration to the president of the plenary court to order the undertaking of the required inspection and to delegate an expert to perform this assignment, to decide his fees, and these fees shall be borne by the inspection's applicant, or the party whose responsibility is established for the violations stated in the application. The person that undertakes the inspection shall have during his work and after leaving work to maintain the confidentiality of the books, documents and all deeds and information which he viewed by virtue of his profession, and not to disclose any secrets relating to the company which he inspected. This is with the exception of the cases in which the law permits this. He shall be responsible if he omits to state true facts or establishes untrue facts that could affect the result of the inspection. The chairman and the members of the board of directors of the company, its employees, its auditors and its managers must avail to the party that inspects all the books, records, documents and other deeds and information that he requests for the purpose of inspection and to submit to him copies of it whenever he requests it. ter Two Penalties Article -334Without prejudice to any severer penalty stipulated by another law, he shall be penalized with imprisonment for a period that does not exceed three years and a fine of not less than ten thousand Dinars and does not exceed one hundred thousand Dinars or by either of the two penalties:Every person who maliciously established in the incorporation contract of the company and its statute or the subscription bulletin or any other releases or documents addressed to the public with faulty information or the violation of the rule of the law, and every person who signed these documents or distributed them or promoted them with his knowledge of being fraudulent. Every person who invited the public to subscribe in shares or documents issued in the name of companies which are not joint stock companies. Every person who evaluates by way of fraudulence shares in kind for more than their real value. Every member of the board of directors or manager or auditor or liquidator who participates in the preparation of the balance sheet or the financial position or information issued by the company which are not in conformity with the facts with his knowledge of this and with the intention of concealing the true financial position of the company or deliberately omitted major facts in order to conceal the true financial position of the company.

Every member of the board of directors or manager, auditor, or liquidator who distributed or endorsed the distribution of any amounts being profits with his knowledge that the financial position of the company does not allow this or in violation of the rules of this law or the contract of the company. Every member of the board of directors or, manager, member of the control board, auditor, any employee of the company or any person assigned to inspect the company divulges in other than the cases in which he is compelled by the law what he obtained due to his work of secrets, or exploits these secrets to materialize personal benefits either for himself or others or to inflict damage on the company. Every person who is assigned to inspect the company and deliberately establishes in the reports he prepares regarding the result of the inspection facts that differ from reality, or deliberately omit to state major facts that could affect the result of inspection. Every person who deliberately establishes or omit contrary to the truth with his knowledge of this, information or data relating to the conditions for the nomination of the membership of the board of directors in a joint stock company. 335Without prejudice to any severer penalty stipulated by another law, he shall be penalized with imprisonment for a period that does not exceed one year and a fine that is not less than five thousand Dinars and does not exceed ten thousand Dinars or by either of the two penalties:Every member of the board of director, or manager that committed deliberately or through fraudulence works that shall prevent one of the partners or shareholders from participating in the meeting of the general assembly or the meeting of the partners of the company. Every member of the board of directors or manager that deliberately abstained without a justifiable excuse, after two months from officially notifying him about the convention of the general assembly meeting or the partners meeting and this is in the cases which are obligatory by law. Every person who prevents the auditor or the member of the control board, the receiver, the liquidator, or the persons assigned to inspect the company from viewing its books and documents, and every person who abstains from providing information, documents and the clarifications that they requested. Every member of the board of directors or manger or liquidator who maliciously exploited this capacity the assets or the shares of the company to materialize personal benefits for him or others either directly or indirectly. It shall be permissible for the court regarding the crimes provisioned in this article and the previous article to rule the discharge of the member of the board of directors or the manager of the company. 336Without prejudice to any severer penalty stipulated by another law, it shall be penalized with a fine of not less than five thousand Dinars and not exceeding fifty

thousand Dinars the company that refrains from correcting the violations that are stated in the report of the Ministry that is brought before its general assembly during the designated date by the Ministry. 33 7The public prosecution shall solely investigate, act and, makes declarations in respect of the crimes stipulated by this law. The Minister shall issue a decree to delegate the sufficient number of the Ministry's employees to monitor the execution of the rules of this law, to apprehend crimes that are committed in violation of its rules and to draft minutes to establish these crimes.