HM King Hamad Issues Decree Amending Commercial Companies Law

His Majesty King Hamad bin Isa Al Khalifa today issued Royal Decree-Law No. (38) of 2025, amending several provisions of the Commercial Companies Law, originally enacted by Decree-Law No. (21) of 2001.

The amendments, presented by the Prime Minister and approved by the Cabinet, introduce significant updates to corporate governance, shareholder rights, and company structures.

Key Amendments:

• Accountability of Directors and Managers:
  Company directors, board members, or any person exercising actual management—whether publicly or behind the scenes—are now personally liable with their own assets for damages caused to the company, shareholders, or third parties if negligence, gross error, or legal violations are proven. Responsibility may be individual or joint, depending on the case.

• Electronic Meetings & Voting:
  Companies are permitted to hold meetings through electronic or telecommunication means, provided that measures are in place to verify participants’ identities, ensure full participation, and accurately record votes and statements. Electronic voting systems may also be adopted under regulations set by the Minister of Commerce.

• Closed Joint-Stock Companies:
  Closed joint-stock companies can now be established by at least two shareholders, but also by a single founder under conditions defined by the Commerce Ministry. The sole founder will assume the powers of the general assembly.

• Company Continuity:
  A company may continue to operate even if a partner withdraws, dies, or is declared bankrupt, provided the articles of association allow it, or if the remaining partners unanimously agree within 90 working days and register the decision.

• Transparency & Oversight:
  Boards, managers, auditors, and actual managers are required to grant inspectors access to all company records when requested, and must provide documents, accounts, and results to the Ministry of Commerce at any time.

• Elimination of “Partnership by Participation” (Sharikah al-Muhasah):
  The law abolishes this company form, and partners in such companies are required to adjust their status within three months of the law’s enactment.

The decree stipulates that all ministers and officials concerned must implement its provisions, which take effect the day after publication in the Official Gazette.