In Lebanon, the Société Anonyme à Responsabilité Limitée (SARL) or Limited Liability Company (LLC) is regulated by Decree-Law No 35 of August 5, 1967, which has undergone significant amendments, particularly through Law No.126 of 29/03/2019. These amendments have extended and refined the structure and operations of SARLs in the country.
Capital Requirements: A SARL in Lebanon necessitates a minimum capital of LBP 5,000,000, typically composed of social shares. Partners contribute to this capital in cash or in-kind assets.
Partners and Liability: A SARL requires at least one partner, who can be a sole partner, and can have a maximum of twenty partners. Importantly, partners’ liability is limited solely to the extent of their contributions, ensuring that their personal assets are shielded from the company’s liabilities.
Foreign Ownership and Restricted Sectors: While there are generally no restrictions on foreign ownership in SARLs, certain sectors such as insurance, economics, banking, finance, supplies, and organized freight may have specific regulations limiting the percentage of ownership attributed to Lebanese nationals.
Management and Transfer of Shares: Management of SARLs can be undertaken by individuals who are not necessarily partners in the company. The transfer of social shares involves approval from three-quarters of the partners and incurs stamp duties and a 10% capital gain tax.
Legal Representation and Auditors: SARLs in Lebanon mandate the appointment of a lawyer with annual retainer fees. Moreover, the appointment of an auditor is required in specific situations, such as when the number of partners exceeds 20 due to the death of a partner, the capital reaches 30 million LBP, or when requested by partners representing 1/5 of the capital.
Restrictions on Single Partner SARLs: A significant regulation states that a SARL owned by a single partner cannot be the sole partner in another SARL company, ensuring a diversified ownership structure within the business landscape.
Understanding the governance and operational dynamics of SARLs in Lebanon is pivotal for entrepreneurs and businesses intending to establish or operate within this legal framework. The regulatory framework not only provides a structure for business operations but also safeguards the interests of partners while facilitating entrepreneurial endeavors within the Lebanese business landscape.
Ready to navigate SARL intricacies in Lebanon? Connect with us at Michel Rizk Law Firm for expert legal guidance and support tailored to your business needs. Contact us today at +961 3 327 234 or email us at ranya_rizk@michelrizklawfirm.com / info@michelrizklawfirm.com.