Practice guide

The Lebanese SAL in practice

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

At a glance

Legal basis

The Code of Commerce (Articles 77 to 225) provides the core rules for the joint stock company. Law 126/2019 amended these rules heavily to modernise board structures and introduce preferred shares. Law 75/2016 abolished bearer shares and shares to order. The Code of Obligations and Contracts (Articles 909 to 930) fills gaps regarding dissolution and liquidation. The Tax Procedures Law 44/2008 governs tax registration and records. Decree 11614/1969 restricts foreign ownership of real estate.

Before you draft

Prohibited or regulated activities

You do not need a prior licence to form a joint stock company unless specific laws regulate the activity (Com. Code, art. 80). If the company operates a public utility, one-third of the capital must consist of registered shares owned by Lebanese natural persons or fully Lebanese companies (Com. Code, art. 78). Any transfer of these specific shares to non-Lebanese persons is absolutely void (Com. Code, art. 78).

Founders' disqualifications

You need at least three founders (Com. Code, art. 79). A person cannot found a joint stock company if they have an un-rehabilitated bankruptcy within the last ten years (Com. Code, art. 79). The law disqualifies anyone convicted in Lebanon or abroad within the last ten years (Com. Code, art. 79). This applies to committing or attempting to commit fraud, embezzlement, or issuing bad cheques (Com. Code, art. 79). It also applies to undermining state credit (Com. Code, art. 79). Concealing property obtained through such offences is a further ground for disqualification (Com. Code, art. 79). These conditions apply equally to representatives of legal entities acting as founders (Com. Code, art. 79). The founders are jointly liable for the obligations and expenses of formation, and cannot recover them from subscribers if the company is never formed (Com. Code, art. 79).

Nationality rules

The company must have its head office in Lebanon and holds Lebanese nationality regardless of any contrary agreement (Com. Code, art. 43). At least one-third of the board members must be Lebanese (Com. Code, art. 144). A non-Lebanese chairman who is not resident in Lebanon does not need a work permit (Com. Code, art. 144). A non-Lebanese chairman who is resident in Lebanon needs one under the general labour rules. Confirm current requirements with the Ministry of Labour. The company counts as foreign unless all its shares are registered and owned by Lebanese persons or purely Lebanese companies. It also counts as foreign unless its own articles bar transfer of those shares to non-Lebanese persons or companies (Decree 11614/1969, art. 2).

Number of members

The company must have at least three shareholders (Com. Code, art. 77). The number of shareholders might fall below the legal minimum. If so, the remaining shareholders must declare the company dissolved within three months (Com. Code, art. 42). They can avoid this by correcting the shortfall first (Com. Code, art. 42). If they fail to do so, any interested party can ask the court to dissolve the company (Com. Code, art. 42).

Name rules

The company operates under a commercial name (Com. Code, art. 77). You must state the company name on all printed and electronic documents. You must include words indicating it is a joint stock company, its capital, and the paid-up portion (Com. Code, art. 100). The company must also post its articles at its offices, and give a copy to anyone who asks for a reasonable fee (Com. Code, art. 100).

Registered office evidence

You must register the company at the Commercial Registry in the district of its head office (Com. Code, art. 26). The registration application must include a rent contract, a title deed, or a legal document justifying the occupation of the premises (Com. Code, art. 26). In practice, the registry accepts a rent contract registered with the municipality or a leniency agreement signed by the owner.

Beneficial owner disclosure

You must declare the identity of the ultimate beneficial owner (صاحب الحق الاقتصادي) in the registration application (Com. Code, art. 26). You must also notify the tax administration of the beneficial owner within two months of starting work (TPL, art. 32). Any change in the beneficial owner requires an annual notification to the tax administration (TPL, art. 32).

Formation, step by step

1. Draft the articles and subscribe the capital. The founders must draft the articles of association (النظام الأساسي) and subscribe to the entire capital, which cannot be less than 30,000,000 LBP (Com. Code, art. 83). The minimum share price is 1,000 LBP, and subscribers must pay at least one-quarter of the nominal value upon subscription (Com. Code, art. 84). If the founders invite the public to subscribe, they must publish a detailed statement in the Official Gazette and two newspapers (Com. Code, art. 81).
2. Deposit the capital. The founders must deposit the paid funds in a bank account in the company's name before final formation (Com. Code, art. 85). You must obtain a bank certificate listing the subscribers and their paid amounts (Com. Code, art. 85). In practice, this certificate is filed with the registry. If the company is not formed within six months, subscribers can petition the court to appoint a manager to withdraw and return the funds (Com. Code, art. 85).
3. Notarise the articles. You must deposit and register the articles of association with any notary public in Lebanon (Com. Code, art. 80). The founders sign the articles before the notary.
4. Appraise in-kind contributions. If there are in-kind contributions, the founders must petition the court to appoint one or more experts to appraise them (Com. Code, art. 86). The expert report is made available to subscribers, who can withdraw if the founders' valuation exceeds the expert valuation by twenty per cent (Com. Code, art. 87). Shares given for in-kind contributions must be fully paid upon formation (Com. Code, art. 88).
5. Hold the constituent assembly. Every joint stock company must hold a constituent assembly to verify that the formation conditions were met and to appoint the first board and auditors (Com. Code, arts. 92 and 93). Where there are in-kind contributions, this assembly must meet within one month of the experts' report, with ten days' notice (Com. Code, art. 90). The company is definitively formed once they accept their roles (Com. Code, art. 93).
6. Retain the company's lawyer. Every joint stock company must retain a permanent lawyer from the Bar roll on an annual fee (Bar Law, art. 62). This applies if its paid-up capital is 1,000,000 LBP or more (Bar Law, art. 62). The registry will not register the company without proof of the retainer (Bar Law, art. 62). The lawyer, not the company, must notify the Bar of the appointment (Bar Law, art. 62). One lawyer may hold such annual retainers for no more than five companies (Bar Law, art. 63). A branch in North Lebanon needs its own lawyer registered with the Tripoli Bar (Bar Law, art. 62).
7. Register the company. The board members must register the company at the Commercial Registry within one month of formation (Com. Code, art. 98). The applicant files a copy of the articles and an extract of them in two copies (Com. Code, art. 26). These must be stamped and signed (Com. Code, art. 26). They must state the company's name, object, form, branches, duration, capital, and contributions (Com. Code, art. 26). They must also list each shareholder's name and nationality, date and place of birth, the authorised managers or signatories, the head office lease or title, and the beneficial owner (Com. Code, art. 26). If the company has variable capital, the filing must also state its minimum capital (Com. Code, art. 26). Someone might act in the company's name before it acquires legal personality. That person is personally and jointly liable for those acts (Com. Code, art. 45). This liability falls away if the company takes the acts over after formation (Com. Code, art. 45). Failure to publish incurs a fine of 500,000 to 1,000,000 LBP (Com. Code, art. 98).
8. Pay the stamp duty. The company must pay a proportional stamp duty of 4 per thousand on the issued shares (DL 67/1967, art. 18). You must pay this in cash within three months of the constituent assembly (DL 67/1967, art. 49).

Formation documents

After registration

You must notify the tax administration within two months of starting work to obtain a tax identification number (TPL, art. 32). The administration issues a single tax number for all taxes, including customs and real estate fees (TPL, art. 34). You must also declare the ultimate beneficial owner within this period (TPL, art. 32).

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, 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).

A company must register for VAT within two months of the end of the quarter in which it meets the mandatory threshold (TPL, art. 32). In practice, the threshold is a turnover of 5 billion LBP over one to four consecutive quarters, and the standard rate is 11%.

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

You must state the company's registration place and number on all correspondence, invoices, and order notes (Com. Code, art. 36). You must also state the company name, its joint stock company status, its capital, and the paid-up portion (Com. Code, art. 100).

After formation, the designated signatories withdraw the deposited capital by presenting a certified copy of the articles and the constituent assembly minutes (Com. Code, art. 85).

Governance

The board of directors (مجلس الإدارة) consists of three to twelve members (Com. Code, art. 144). The ordinary general assembly elects the board for a maximum term of three years. The articles can appoint the first board for up to five years (Com. Code, arts. 146 and 149). Board members can be shareholders or non-shareholders (Com. Code, art. 147). Board seats might fall vacant between two annual meetings through death, resignation or another cause. If active members drop below half the minimum the articles set, or below three, the remaining members must act. They must call the general assembly within two months to fill the vacant seats (Com. Code, art. 146). A natural person cannot sit on more than eight boards in Lebanon (Com. Code, art. 154). The board elects a chairman (رئيس مجلس الإدارة) who acts as general manager, unless the articles separate the roles (Com. Code, arts. 144 and 153). A person cannot chair more than six companies or be a general manager or deputy general manager in more than three (Com. Code, art. 154). The assembly can remove board members at any time without cause (Com. Code, art. 150). Removal might not be on the agenda. If so, the decision only takes effect once a second assembly confirms it (Com. Code, art. 151). This second assembly must be called within two months and chaired by an auditor (Com. Code, art. 151).

The board needs at least half its members present or represented, and a member may represent only one other member (Com. Code, art. 156). The articles can allow attendance via video conferencing, except for preparing or approving the annual accounts, and for the reports listed in article 101 (Com. Code, art. 156). The board has broad powers to execute assembly decisions and run the company (Com. Code, art. 157). The chairman represents the company and runs daily operations (Com. Code, art. 157). Any contract between the company and a board member, deputy general manager, or a 5% shareholder requires prior board authorisation and subsequent assembly approval (Com. Code, art. 158).

The assembly appoints one or more auditors (مفوضو المراقبة) for a one-year term, renewable up to five consecutive years (Com. Code, art. 172). Shareholders holding 10% of the capital can petition the court to appoint an additional auditor (Com. Code, art. 173). The auditors review the financial statements and report to the assembly (Com. Code, art. 174).

The board calls the general assemblies. The auditors must call one whenever the board fails to do so (Com. Code, art. 176). They may also call one whenever they see fit (Com. Code, art. 176). They must call one if shareholders holding a fifth of the capital ask for it (Com. Code, art. 176). Shareholders can vote by proxy if the proxy is also a shareholder (Com. Code, art. 181). The articles can allow non-shareholder proxies (Com. Code, art. 181). A legal representative of a shareholder lacking capacity need not be a shareholder (Com. Code, art. 181). The articles can permit remote participation via video link (Com. Code, art. 181). Every share carries one vote unless the articles limit votes equally across all shares (Com. Code, art. 186). Law 126/2019 abolished double voting rights for new companies (Com. Code, art. 117).

Besides its accounting books, the company keeps a register of registered shares and a register of the shareholders present at each general assembly (TPL, art. 29).

Annual cycle

The board sets aside 10% of net profit each year, after deducting past losses, until the reserve equals one third of the capital (Com. Code, art. 165). The annual deposit at the registry includes the auditor's report and the individual and consolidated financial statements. It also includes the board's report, special reports on conflicts of interest, and the assembly minutes (Com. Code, art. 101). The judge supervising the commercial registry fines the company 100,000 LBP a year for each document under article 101 that is not deposited properly (Com. Code, art. 102). You do not need a National Social Security Fund clearance for this specific filing (Com. Code, art. 102). The corporate income tax rate is 17% (Law 10/2022, art. 28).

Changes during the company's life

Transfer of shares

Shareholders can freely transfer their shares, but the articles can grant a right of first refusal to other shareholders or the company (Com. Code, art. 118). Law 75/2016 abolished bearer shares, so all shares must be registered (Law 75/2016, art. 1). You record the transfer in the company's share register. The previous owner remains jointly liable for unpaid share capital for two years from the transfer (Com. Code, art. 119).

• Share transfer agreement.
• Updated share register extract.

Capital increase

The extraordinary general assembly decides on a capital increase, which requires the prior capital to be fully paid, on pain of nullity of the increase (Com. Code, art. 205). Existing shareholders have a pre-emptive right to subscribe to new cash shares, unless the assembly restricts this right (Com. Code, arts. 112 and 113). If non-shareholders subscribe, their shares are subject to the in-kind contribution appraisal rules. If this appraisal is not carried out, the capital increase is void (Com. Code, art. 113). You must pay a 4 per thousand stamp duty within one week of the assembly verifying the subscription (DL 67/1967, art. 49).

• Extraordinary general assembly minutes.
• Bank certificate for new funds.
• Expert report (if applicable).

Capital reduction

The extraordinary general assembly decides on a capital reduction, which must not prejudice creditors' rights (Com. Code, art. 208). You must publish the decision in the Official Gazette, and creditors have three months to object (Com. Code, art. 208). If a creditor objects, the reduction is suspended until the court rules (Com. Code, art. 208). If the company loses three-quarters of its capital, the board must call an extraordinary assembly. The assembly decides whether to dissolve, reduce the capital, or take any other measure it finds appropriate (Com. Code, art. 216).

• Extraordinary general assembly minutes.
• Official Gazette publication tear sheet.

Change of directors or management

The ordinary general assembly elects or removes board members (Com. Code, arts. 146 and 150). The board elects the chairman from among its own members (Com. Code, art. 153). It also appoints the general manager from shareholders or outsiders (Com. Code, art. 153). The general manager need not be a board member (Com. Code, art. 153). You must register any change in the board's composition at the Commercial Registry (Com. Code, art. 152). You can register a director's resignation by filing the notification receipt without needing any other document (Com. Code, art. 152).

• Ordinary general assembly minutes (for board changes).
• Board of directors minutes (for chairman/GM changes).
• Resignation notice (if applicable).

Amendment of the articles

The extraordinary general assembly can amend any article, provided it does not change the company's nationality, increase shareholders' obligations, or harm third parties' rights (Com. Code, art. 201). Changing the company's object or form requires a quorum of three-quarters of the capital (Com. Code, art. 202). You must deposit and register every amendment with a notary (Com. Code, art. 80) and at the Commercial Registry (Com. Code, art. 27).

• Extraordinary general assembly minutes.
• Notarised amended articles.

Issuing preferred shares

The extraordinary general assembly can issue preferred shares (أسهم تفضيلية) up to 30% of the capital (Com. Code, arts. 121 bis 1 and 121 bis 3). These shares grant financial privileges but no voting rights, except in specific cases like unpaid dividends or major corporate changes (Com. Code, arts. 121 bis 4 and 121 bis 5). The chairman, board members, the general manager, and deputy general managers cannot own preferred shares (Com. Code, art. 121 bis 7). Their spouses and minor children are also barred from owning them (Com. Code, art. 121 bis 7). This prohibition applies directly or through a third party (Com. Code, art. 121 bis 7).

• Extraordinary general assembly minutes.
• Amended articles.

Merger and division

Companies can merge (اندماج) or divide (انشطار) by transferring their assets to existing or new companies (Com. Code, art. 210). The board drafts the merger or division project and deposits it with the commercial registry (Com. Code, art. 213 bis 2). It then publishes a summary of the project (Com. Code, art. 213 bis 2). This publication must happen within one month of the extraordinary assembly's approval (Com. Code, art. 213 bis 2). The auditors produce a unified report, and a court-appointed special auditor may also produce a report (Com. Code, art. 213 bis 4). These must be available to shareholders at the company's seat (Com. Code, art. 213 bis 4). They must be available at least one month before the assembly votes on the merger (Com. Code, art. 213 bis 4). Creditors can object in court within one month of publication (Com. Code, art. 213 bis 9). Mergers are exempt from stamp duties and transfer taxes (Com. Code, art. 213 bis 21). A division into newly created companies gets the same exemption, but the fees stay due if the division benefits an existing company (Com. Code, art. 213 bis 24).

• Merger or division project.
• Board report.
• Auditors' unified report and special auditor's report.
• Extraordinary general assembly minutes of all involved companies.

Dissolution and liquidation

The company dissolves upon term expiry, completion of its object, or because completing that object becomes impossible (Com. Code, art. 216). It also dissolves in any special case its own articles set out (Com. Code, art. 216). A shareholder vote to dissolve early needs the same quorum and majority as changing the object or form (Com. Code, arts. 202, 204 and 216). If the company loses three-quarters of its capital, the assembly can decide to dissolve it (Com. Code, art. 216). The board might fail to call this assembly, or the assembly might not reach quorum. The assembly might also refuse to dissolve the company. In these cases, any shareholder may ask the competent court to order the appropriate measure or to dissolve the company (Com. Code, art. 217).

1. Declare dissolution. The ordinary assembly appoints the liquidators in most cases, unless the articles already name them (Com. Code, art. 220). Only when shareholders vote to dissolve the company early does the extraordinary assembly appoint the liquidators, at the same meeting (Com. Code, arts. 216 and 220).
2. Publish the decision. You must publish the dissolution decision (Com. Code, art. 218). The company adds "in liquidation" to its name (COC, art. 925).
3. Liquidate assets. The liquidator receives the accounts from the board (Com. Code, art. 222). The liquidator then collects debts, pays creditors, and sells assets (COC, art. 928). If liquidation lasts over a year, the liquidator publishes annual balance sheets (Com. Code, art. 223).
4. Close liquidation. The liquidator prepares a final balance sheet showing each shareholder's share (Com. Code, art. 224). The auditors report on the accounts, and the ordinary assembly approves them and discharges the liquidator (Com. Code, art. 225).
5. Notify the tax administration. Notify the tax administration of the final cessation of activity within two months (TPL, art. 33).
6. Strike off. Once the company is dissolved, its registration must be struck off, and the judge supervising the commercial registry does this directly by decision (Com. Code, art. 30). 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 and must 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. In practice, you must obtain tax and social security clearances before final strike-off.

Pitfalls

• Issuing bearer shares or shares to order is prohibited. Companies with existing bearer or order shares had three years from the law's publication to convert them to registered shares and amend their articles accordingly (Law 75/2016, art. 1). Holders who have not converted within one year of the law's effect lose all rights tied to those shares (Law 75/2016, art. 1). They cannot be appointed to the board (Law 75/2016, art. 1). If the company pays them dividends, it faces a fine of 20% of its capital per payment (Law 75/2016, art. 1). Shares still unconverted two years after the law took effect pass to the Lebanese state (Law 75/2016, art. 1).
• If non-Lebanese persons hold shares, or if the articles allow transfer to non-Lebanese, the company is treated as foreign. It then needs a cabinet decree to acquire more than 3,000 square metres of real estate (Decree 11614/1969, arts. 2 and 3).
• Distributing fictitious dividends makes board members civilly liable to anyone harmed (Com. Code, art. 107). It makes the auditors civilly liable on the same footing (Com. Code, art. 107). Auditors escape liability only if they prove they committed no fault in their oversight (Com. Code, art. 107). Board members and auditors also face criminal liability if the dividend was distributed with no balance sheet at all (Com. Code, art. 107). They face the same liability if it was distributed on the strength of a fraudulent inventory, balance sheet or financial statements (Com. Code, art. 107).
• If a shareholder transfers shares before paying them in full, they remain jointly liable for the unpaid amount for two years (Com. Code, art. 119).
• In practice, Lebanon is not a party to the Apostille Convention. Foreign documents therefore require full chain legalisation through the Ministry of Foreign Affairs and the Lebanese embassy.
• A natural person sitting on more than eight boards must correct their status within two months of notice. Otherwise they are deemed resigned and must return the fees and remuneration received since the breach began (Com. Code, art. 154).

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
• Budget Law No. 10 of 15 November 2022
• Legislative Decree No. 67 of 5 August 1967 on fiscal stamp duty, as amended
• Law No. 75 of 27 October 2016 abolishing bearer shares and shares to order
• Law implemented by Decree No. 11614 of 4 January 1969 on the acquisition of real rights by non-Lebanese, as amended by Law No. 296 of 3 April 2001
• 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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