Practice guide

The civil company in practice

By Gracia Hobeich, lawyer, Beirut Bar Association Updated 29 September 2026

At a glance

Legal basis

The primary text is the Code of Obligations and Contracts, which dedicates Articles 844 to 930 to the company contract. The Code of Commerce governs commercial companies and does not itself apply to a civil company. Where this pack is silent on a point, this guide says so rather than borrowing a commercial-company rule. Tax Procedures Law 44/2008 governs tax registration and beneficial ownership. Civil companies are entered in a register of civil companies kept by the registrars of the civil courts. The registrars report each entry to the tax administration monthly (TPL, art. 24).

Before you draft

The company must have a lawful object and cannot trade in things outside commerce (COC, art. 847). In practice, the registry rejects files if the object is commercial rather than civil, because commercial activities require a commercial company form.

A company cannot be formed between a father and a son under his authority (COC, art. 846). You cannot form a company between a tutor and a minor until majority and final account approval (COC, art. 846). You cannot form a company between a curator of an incapable person and the person whose assets they manage (COC, art. 846).

The company requires two or more persons, but it can be formed by one person in cases provided by law (COC, art. 844). Partners can contribute cash, movable or immovable property, intangible rights, or their own industry and credit (COC, arts. 849 and 850). You must specify and value each contribution in the articles (COC, art. 852). If a partner contributes their industry, they must account to the company for all profits they make from that industry (COC, art. 860).

In practice, the registry rejects the application if the company name does not explicitly include the phrase "Civil Company" (شركة مدنية).

You must prove the head office location. In practice, you provide a real estate certificate or a lease agreement.

Formation, step by step

1. Draft the articles of association. You draft the articles (النظام الأساسي) to define the object, capital, and management. The deed is perfected by consent (COC, art. 848). Official form is required only if two conditions hold together (COC, art. 848). The object must be real estate or other mortgageable property. The company must also last more than three years (COC, art. 848). In practice, founders often authenticate the articles before a notary public.
2. Deposit the capital. The partners must deliver their contributions immediately after the contract is concluded unless a date is agreed (COC, art. 857). In practice, you deposit the cash capital in a bank and obtain a certificate.
3. Legalise foreign powers of attorney. If a founder is foreign and signs by proxy, you must legalise the power of attorney. In practice, because Lebanon is not a party to the Apostille Convention, this requires full consular legalisation ending at the Lebanese Ministry of Foreign Affairs.
4. Register the company. File the company with the register of civil companies at the Court of First Instance for the head office (TPL, art. 24). No statute in force sets the contents of the file or a deadline, so confirm both with the registry before filing. In practice, the registration process remains paper-based.

Formation documents

After registration

You must notify the tax administration and submit a registration request within two months of starting work (TPL, art. 32). The administration issues a single tax number for all taxes (TPL, art. 34). The tax registration request must identify the beneficial owner (TPL, art. 32). In practice, this is done on Form M18.

Keep a register of beneficial owners and update it as changes occur (TPL, art. 29). For each owner it records the full name, nationality, date of birth, home and correspondence addresses. It also records the identity or passport number, tax residence, tax number and share (TPL, art. 29). Keep the documents that show who owns and controls the business for ten years, even after someone stops being a beneficial owner (TPL, art. 29).

The company may meet the mandatory VAT threshold. If so, you must submit a VAT registration request within two months of the end of that quarter (TPL, art. 32).

You must submit a registration request for any employee within three months of them starting work (TPL, art. 32). In practice, you must also register the company, its partners, and employees with the National Social Security Fund.

In practice, civil companies formed by lawyers must register their partnership deed with the Bar Association.

You must use the tax registration number on all documents issued by the company (TPL, art. 34).

Governance

The partners can appoint one or more managers by the majority required for company decisions (COC, art. 883). Managers appointed in the articles can only be removed for just cause by unanimous decision, unless the articles allow majority removal (COC, art. 891). Managers not appointed in the articles can be removed by the same majority required for their appointment (COC, art. 892). If the company has multiple managers, they must act jointly unless authorised otherwise (COC, art. 886). A manager appointed in the articles can perform all management acts despite the opposition of other partners, provided there is no fraud (COC, art. 884). Managers cannot receive special remuneration for their work unless the articles expressly grant it (COC, art. 874).

The right to manage belongs to all partners jointly, and no partner may act alone without authorisation (COC, art. 876). A general mandate allows a partner to perform all administration acts, including alienation, while a restricted mandate requires the consent of others (COC, arts. 879 and 881). A general-mandate partner can sell assets, pledge property, issue bills of exchange, and represent the company in court (COC, art. 879). They cannot make gratuitous transfers, guarantee third parties, make free loans, or agree to arbitration without special authorisation (COC, art. 880). In a general-mandate company, partners are jointly and severally liable for any obligation one of them validly contracts, unless there is fraud (COC, art. 902). Managers cannot perform acts outside the company's object, and unanimity is required to give away common property without payment or amend the articles (COC, art. 887).

Where the articles require a majority, this means a majority in number in case of doubt (COC, art. 882). If votes are tied, the opponents prevail (COC, art. 882). If the two sides disagree about which decision to take, the matter goes to the court, which decides in the company's general interest (COC, art. 882). Non-managing partners have the right to inspect the company books and papers at any time (COC, art. 889).

In practice, keep a written record of partners' decisions as evidence. You must notify the tax administration of any change in partners or their shares within the annual tax return deadline (TPL, art. 32).

Annual cycle

You must deduct one-twentieth of net profits to form a reserve until it reaches one-fifth of the capital (COC, art. 897). You must draw up a balance sheet and an inventory at the end of each company year (COC, art. 896). If the articles do not specify profit and loss shares, partners share them in proportion to their capital contributions (COC, art. 894). You must keep accounting records in Arabic, though French or English is permitted (TPL, art. 31). You must keep accounting records for ten years (TPL, art. 30). In practice, the annual income tax return is due by May 31, though the Ministry of Finance frequently extends this.

Changes during the company's life

Transfer of shares or interests

A partner needs the consent of all other partners to bring a third party into the company's business, unless the articles allow it (COC, art. 871). A partner does not need that consent to give a third party an interest in their own share. They can also assign it without consent, unless the articles say otherwise (COC, art. 871). That third party only shares in the profits and losses attributed to the transferring partner and has no claim against the company (COC, art. 871). The transferee becomes a partner only if the other partners consent or the articles provide for it. If they do, the transferee steps into the outgoing partner's rights and duties (COC, art. 872). You must notify the tax administration of any change in partners or their shares within the annual tax return deadline (TPL, art. 32). In practice, you file the transfer deed at the special register. The law does not set a specific deadline for the registry filing.

• Amended articles or transfer deed
• Tax notification

Capital increase

The partners must agree to the capital increase by unanimous decision, because it amends the articles (COC, art. 887). You must notify the tax administration of any capital increase within the annual tax return deadline (TPL, art. 32). In practice, you file the amended articles at the special register. The law does not set a specific deadline for the registry filing.

• Unanimous partners' decision
• Amended articles
• Tax notification

Capital reduction

The partners must agree to the capital reduction by unanimous decision, because it amends the articles (COC, art. 887). The capital may decrease due to losses. You must reconstitute it from subsequent profits before distributing any dividends (COC, art. 897). This does not apply if the partners decide to reduce the capital to the effective amount (COC, art. 897). You must notify the tax administration of any capital reduction within the annual tax return deadline (TPL, art. 32). In practice, you file the amended articles at the special register.

• Unanimous partners' decision
• Amended articles
• Tax notification

Change of managers or directors

You appoint or remove managers according to the majorities in the articles or the law (COC, arts. 883 and 891). Managers appointed in the articles can only be removed for just cause by unanimous decision, unless the articles allow majority removal (COC, art. 891). Managers not appointed in the articles can be removed by the same majority required for their appointment (COC, art. 892). In practice, you file the change at the special register. The law does not set a specific deadline for the registry filing.

• Partners' decision

Amendment of the articles (name, object, seat, duration)

You need the unanimous consent of the partners to amend the articles or derogate from them (COC, art. 887). You must notify the tax administration of any change to the name, address, or main activity. Natural persons must do this within two months (TPL, art. 32). Legal persons must do this within the annual return (TPL, art. 32). In practice, you file the amended articles at the special register. The law does not set a specific deadline for the registry filing.

• Unanimous partners' decision
• Amended articles
• Tax notification

Change of signatories

A manager's power to administer the company includes the power to represent it before third parties, unless the articles say otherwise (COC, art. 877). Any change in the authorized signatories requires a valid appointment decision by the partners. You appoint or remove managers according to the majorities in the articles or the law (COC, arts. 883 and 891). In practice, you file the change at the special register. The law does not set a specific deadline for the registry filing.

• Partners' decision

Conversion to another form

The rule that a change of form keeps the same legal personality is written for commercial companies (Com. Code, art. 45). For a civil company, confirm the effect of a conversion with the registry before you advise on it. You need the unanimous consent of the partners to amend the articles for the conversion (COC, art. 887). In practice, you file the conversion at the special register.

• Unanimous partners' decision
• Publication evidence

Withdrawal and exclusion of a partner

A partner in a company of undefined term may withdraw in good faith. They must do this at a time that does not harm the company. They must notify the other partners at least three months before the end of the company year (COC, art. 915). Any partner may ask the court to dissolve the company for just cause. This includes serious disagreement between partners or one partner's failure to meet their obligations (COC, art. 914). A partner's death, absence, incapacity or insolvency would normally dissolve the company. The other partners may ask the court to exclude that partner instead and continue the company. They must pay out the excluded partner's share as valued on the date of exclusion (COC, art. 918). Where the company has only two partners, the innocent partner may ask the court for leave to buy out the other. They can then continue the business alone (COC, art. 919). A partner who delays their capital contribution can be excluded from the company or forced to perform, and must pay damages in either case (COC, art. 857).

• Partners' decision or court order

Dissolution and liquidation

Partners of full legal capacity may divide the company's property directly between themselves. They use the method in the articles or another method they agree. This replaces a formal liquidation, unless they unanimously decide to liquidate first (COC, art. 922). The steps below describe that formal liquidation.

The company dissolves upon term expiry, object completion, loss of common property, death or bankruptcy of a partner, common will, or court order (COC, art. 910). The company does not dissolve on a partner's death, declared absence, or interdiction for incapacity (COC, art. 910). This exception applies only if the partners agreed in advance to continue the company (COC, art. 910). A partner's bankruptcy still dissolves the company under this article (COC, art. 910). The other partners can instead ask the court to exclude the bankrupt partner and continue the company (COC, art. 918). The company also dissolves upon a partner's withdrawal, if the company's term is undefined (COC, art. 910). If the company continues its business after its term expires, the law tacitly extends its life year by year (COC, art. 912). A partner's personal creditors can object to this extension if they hold a final judgment (COC, art. 913).

1. Appoint a liquidator. All partners may liquidate, or they can unanimously appoint a liquidator (COC, art. 923). After dissolution, managers cannot start new business (COC, art. 921). They act as depositaries of the company's assets and handle urgent matters until the liquidator takes over (COC, art. 924). If there are multiple liquidators, they must act jointly unless expressly authorised to act alone (COC, art. 926).
2. Add the liquidation suffix. You must state that the company is under liquidation on all its documents (COC, art. 925).
3. Inventory and balance sheet. The liquidator and managers must draw up an inventory and a balance sheet upon taking office (COC, art. 927).
4. Realise assets and pay debts. The liquidator collects debts, pays obligations, and sells assets (COC, art. 928). The liquidator must set aside and deposit sufficient funds to cover debts that are disputed or not yet due (COC, art. 929). If company funds cannot cover the debts, the liquidator asks the partners for the shortfall. This is available because civil company partners already answer for company debts under article 901. It also applies if a partner still owes part of their capital contribution (COC, art. 930). Insolvent partners' shares of the shortfall are spread over the other partners in proportion to how they bear losses (COC, art. 930).
5. Distribute the remainder. The liquidator distributes what remains after paying debts, following the articles or the partners' agreement.
6. Notify the tax administration. You must notify the tax administration of the final cessation of work within two months (TPL, art. 33).

In practice, you must obtain a tax clearance to close the liquidation and strike off the company. You must also obtain a National Social Security Fund clearance specifically valid for dissolution and striking off.

Dormant companies can also be struck off by the Ministry of Finance without a liquidation (Decision 208/2020, art. 2). This covers a company that never operated, or one that stopped with no assets and no employees. The company must owe nothing to third parties. It must also have paid all taxes and NSSF dues (Decision 208/2020, arts. 2 and 3). The Ministry prepares and publishes the list within three months of the start of every year (Decision 208/2020, arts. 4 and 7). The company, public bodies and creditors may object to the Ministry within three months of the last publication (Decision 208/2020, art. 5). A company that does not object is struck from the tax rolls, the registers and the NSSF (Decision 208/2020, art. 6). Check the Ministry's list before filing anything for a dormant client company.

Pitfalls

• The registry rejects files if the company's object is commercial, as civil companies must strictly limit their activities to civil works and liberal professions.
• The registry rejects the application if the company name does not explicitly include the phrase "Civil Company".
• Foreign powers of attorney are often rejected if they only carry an Apostille, because in practice Lebanon requires full consular legalisation.
• Any clause attributing all profits to one partner, or exempting a partner from all losses, renders the company null (COC, art. 895).
• Partners lack the limited liability shield of commercial corporations. They face unlimited personal liability for company debts in proportion to their contributions. This applies unless the articles provide for joint and several liability (COC, art. 901).

Questions lawyers ask

Sources

• Code of Commerce, Legislative Decree No. 304 of 24 December 1942, as amended, notably by Law No. 126 of 29 March 2019
• Code of Obligations and Contracts of 9 March 1932, as amended
• Law No. 8 of 11 March 1970 on the organisation of the legal profession, as amended
• Tax Procedures Law No. 44 of 11 November 2008, as amended
• Decision No. 208 of 15 June 2020 of the Ministers of Finance and Justice on striking off dormant companies

Statutory text as published by the Lebanese University Centre for Research and Studies in Legal Informatics, read in Arabic. Citations give the article as amended to date. Registry and tax office practice changes without notice, so confirm the desk’s current requirements before filing.

General information, not legal advice. Current as at 29 September 2026.

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