Practice guide

The Lebanese SARL in practice

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

At a glance

Legal basis

Legislative Decree 35/1967 governs the SARL form. Law 126/2019 rewrote most of the decree, introduced the single-partner SARL and aligned the company with the new merger and conversion rules. The SARL is subject to commercial laws and customs and to the decree itself (DL 35/1967, art. 2). The Code of Obligations and Contracts fills gaps on the company contract where the Code of Commerce does not provide otherwise (Com. Code, art. 42). Tax Procedures Law 44/2008 governs tax filings and record retention. Law 8/1970 dictates when you must retain a lawyer. Decree 11614/1969 restricts foreign ownership of real rights.

Before you draft

Prohibited activities. A SARL may not carry on insurance, capitalisation or savings schemes, scheduled air transport, banking, or the investment of funds for third parties (DL 35/1967, art. 4).

Number of partners. A SARL takes one to twenty partners, except where quotas transfer by inheritance (DL 35/1967, art. 5). A single person can form the company as the sole partner (الشريك الوحيد) (DL 35/1967, art. 1). If the number exceeds thirty, you must convert the company to a joint stock company within two years, or the company must dissolve (DL 35/1967, art. 5). The law forbids a single-partner SARL from being the sole partner of another SARL (DL 35/1967, art. 5). If all the quotas come into one partner's hands, the company is not dissolved and simply continues as a single-partner SARL (DL 35/1967, art. 5). You must cure this breach within one year. After that year, any interested party may seek dissolution. The court may still allow six months to regularise the situation (DL 35/1967, art. 5).

Name rules. The name derives from the corporate object or includes the names of one or more partners (DL 35/1967, art. 6). You must clearly state "شركة محدودة المسؤولية" or "ش.م.م." alongside the capital and register number on all company papers and announcements (DL 35/1967, art. 6). Breach is punished by a fine of one to two times the official minimum wage (DL 35/1967, art. 6). If the omission misleads third parties about the type of company, the court may apply the general partnership rules to the partners' obligations (DL 35/1967, art. 6). In practice, the registry rejects names that closely resemble existing registered companies.

Capital rules. The capital must be at least 5,000,000 LBP, divided into equal quotas (DL 35/1967, art. 7). You cannot issue negotiable shares or public subscription instruments (DL 35/1967, art. 3). If capital drops below the minimum, you have one year to restore it. Alternatively, you can convert the company into another form other than a joint stock company (DL 35/1967, art. 7). If you do not, any interested party can request judicial dissolution after warning the manager (DL 35/1967, art. 7).

Real estate restrictions. For real estate, a SARL counts as non-Lebanese unless all its quotas belong to Lebanese natural persons. Its articles must also forbid transfers to non-Lebanese persons or to companies that are not wholly Lebanese (Decree 11614/1969, art. 2). A SARL deemed non-Lebanese needs a Council of Ministers decree to acquire real rights (Decree 11614/1969, art. 1). This rule exempts built or buildable property up to 3,000 square metres in total (Decree 11614/1969, art. 3). A company must put the property to the use for which it was acquired or licensed. It has five years from registration in the land register to do so. Failing this, the Ministry of Finance sells it and the profit goes to the Treasury (Decree 11614/1969, art. 11). Once such a company holds real rights, it may not amend its articles to reduce the Lebanese holding. The only exception is on a partner's death (Decree 11614/1969, art. 12). Breach triggers nullity and the penalties of article 16 (Decree 11614/1969, arts. 12 and 16).

Beneficial owner. You must identify the economic beneficial owner (صاحب الحق الاقتصادي) when registering the company (Com. Code, art. 26).

Formation, step by step

1. Draft the articles. You draft the articles of association (النظام الأساسي) stating the capital is fully distributed and paid (DL 35/1967, art. 8). In practice, the partners' signatures on the articles are certified, usually before a notary (كاتب العدل), so confirm with the registry which form it will accept.
2. Value in-kind contributions. If partners provide in-kind assets, you state their value in the articles (DL 35/1967, art. 9). You must petition the First Instance Court president to appoint one or more experts to verify this value (DL 35/1967, art. 9). If the partners' valuation exceeds the expert valuation by more than 20 percent, prospective partners can withdraw (DL 35/1967, art. 9).
3. Deposit the capital. You deposit the full cash capital in a bank account (DL 35/1967, art. 8). The manager cannot withdraw these funds before commercial registration (DL 35/1967, art. 8). In practice, the bank issues a certificate of deposit.
4. Pay the stamp duty. Deeds that state sums of money bear proportional stamp duty, at a general rate of four per thousand (DL 67/1967, arts. 13 and 18). In practice, the registry collects it on the capital stated in the articles when the file is lodged, so confirm the amount with the registry desk.
5. Retain the company's lawyer. The obligation to retain a permanent lawyer on an annual fee starts at a paid-up capital of LBP 1,000,000 (Bar Law, art. 62). The SARL minimum capital is LBP 5,000,000 (DL 35/1967, art. 7). Therefore, every SARL must retain a lawyer. 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).
6. Register the company. The legal representative applies to the Commercial Register (السجل التجاري) within one month of formation (Com. Code, art. 26). The filing consists of a copy of the articles and an extract of them in two copies. The applicant stamps and signs the extract. It must give the particulars that article 26 lists (Com. Code, art. 26). These include each partner's name, nationality, date and place of birth, the name, the object, branches, the managers and signatories. They also include the capital and contributions, the start and end dates, the form, the lease or title to the head office, and the beneficial owners (Com. Code, art. 26). Registration is the only publication a SARL needs at formation, with no Official Gazette or newspaper notice (DL 35/1967, art. 11). Anyone who acts for the company before it acquires legal personality is personally and jointly liable for those acts. The exception is if the company takes them over after formation (Com. Code, art. 45). Keep pre-formation contracts to a minimum and have the first partners' decision adopt them.
7. Register for tax. You must register the company with the tax administration within two months of starting work (TPL, art. 32).

Formation documents

After registration

You must obtain a tax identification number (الرقم الضريبي) from the Ministry of Finance, which serves for all taxes including customs and real estate (TPL, art. 34). You must state this number on all company documents (TPL, art. 34). The tax registration request must identify the beneficial owner (TPL, art. 32). The company reports any change to its name, address, activity, legal form, capital, partners or beneficial owners to the tax administration. It does this once a year, within the deadline for the annual return (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).

In practice, you must register for VAT if turnover exceeds 5,000,000,000 LBP over one to four consecutive quarters. The law requires VAT registration within two months of the end of the quarter in which the threshold is met (TPL, art. 32).

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

You must state the registration place and number on all correspondence, invoices, order notes, and publications (Com. Code, art. 36). Failing this incurs a fine of 50 to 1,000 LBP, doubled if not corrected within fifteen days (Com. Code, art. 37).

The manager can withdraw the deposited capital from the bank after registration (DL 35/1967, art. 8). If registration does not happen within six months of the deposit, partners can ask the urgent matters judge to authorise withdrawal (DL 35/1967, art. 8).

Governance

The company is managed by one or more natural persons, who may be partners or third parties (DL 35/1967, art. 16). They have full powers to run the company unless the articles restrict them (DL 35/1967, art. 16). The partners or the sole partner can remove a manager, or the court can remove them for legitimate cause (DL 35/1967, art. 16). Managers, partners and the sole partner may not obtain loans, guarantees or sureties from the company for themselves. This ban extends to their spouses, ascendants or descendants, even through nominees. Any such act is void (DL 35/1967, art. 18). Managers face joint or several liability for breaches of law or articles. Liability actions lapse five years after the harmful act, or after its discovery if it was concealed. The period is ten years where the act is a felony (DL 35/1967, art. 20).

You must appoint an auditor (مفوض المراقبة) if partners exceed twenty, if capital reaches 30,000,000 LBP, or if partners holding one-fifth of the capital request it (DL 35/1967, art. 30). For a single-partner company, an auditor is mandatory if capital reaches 30,000,000 LBP (DL 35/1967, art. 30). You must choose the auditor from the experts list (DL 35/1967, art. 31). The auditor cannot be a partner, manager, or their relative, nor receive a salary from them (DL 35/1967, art. 31). A former auditor cannot become that company's manager for five years. In the same period, the auditor cannot join an affiliated company either, meaning one holding, or held by, a ten percent stake (DL 35/1967, art. 31).

The manager calls the annual assembly within six months of year-end (DL 35/1967, art. 21). The manager convenes the partners at least fifteen days ahead, unless the articles set another period. Notice is by two local dailies, by registered letter, or by any means the articles provide (DL 35/1967, art. 23). If the manager does not convene the meeting, the auditor may do so. Failing both, partners holding a quarter of the capital may ask the court to appoint someone to convene the meeting and set its agenda (DL 35/1967, art. 23). Partners vote in proportion to their quotas, and proxies are only valid for other partners unless articles state otherwise (DL 35/1967, art. 24). Decisions need partners representing at least half the capital on first call. At a second meeting or consultation, they need a majority of the votes cast whatever the capital represented, unless the articles provide otherwise (DL 35/1967, art. 25).

If the articles allow it, decisions may be taken by written consultation instead of a meeting. This does not apply to the annual approval of the accounts and the managers' report (DL 35/1967, art. 22).

In a single-partner SARL there are no meetings, and the sole partner signs decisions alone. The partner approves the accounts within six months of the year end after reading any auditor's report. The partner cannot delegate partner powers to anyone else (DL 35/1967, arts. 25 and 29).

Annual cycle

In practice, VAT returns are filed quarterly, and salary tax is paid quarterly. Capital companies, including the SARL, pay income tax on profits at 17% (Law 10/2022, art. 28).

Changes during the company's life

Transfer of quotas

Transfers require an official or private deed notified to the manager and partners (DL 35/1967, art. 15). The company, through any manager, has fifteen days from notice of the draft transfer to say it wishes to buy all the quotas. It then has a further fifteen days from that statement to complete the purchase (DL 35/1967, art. 15). The draft must name the prospective buyer and give the terms and price (DL 35/1967, art. 15). If the company refuses, partners have thirty days to buy the quotas in proportion to their holdings (DL 35/1967, art. 15). A transfer to an outsider needs the consent of partners holding at least three-quarters of the capital (DL 35/1967, art. 15). These rules do not apply to a single-partner company (DL 35/1967, art. 15). Quotas pass to heirs on death, but where there are several partners, the articles may give the company an option to refuse some or all heirs. The company must exercise this within two months of the death and pay them the value of their quotas (DL 35/1967, art. 14). The bankruptcy or legal incapacity of a partner does not dissolve the company (DL 35/1967, art. 14). Register the new partner and the new distribution of quotas within one month of the transfer (Com. Code, arts. 26, 27 and 31).

• Transfer deed
• Notification to manager and partners
• Assembly minutes approving transfer
• Updated extract for the commercial register

Capital increase

An increase requires amending the articles, needing a majority of the partners in number, who together hold at least three-quarters of the capital (DL 35/1967, art. 26). Cash contributions must be deposited in a bank and cannot be withdrawn until the increase is registered in the Commercial Register (DL 35/1967, art. 27). The increase must be registered within six months of the first deposit. If it is not, each subscriber may ask the judge of urgent matters for leave. They can then take back what they paid (DL 35/1967, arts. 8 and 27). Registration is due within one month of the decision (Com. Code, arts. 27 and 31). In-kind increases require a court-appointed expert valuation (DL 35/1967, art. 28). In practice, the proportional stamp duty is paid again on the amount of the increase when the amendment is filed.

• Assembly minutes
• Bank certificate for cash
• Expert report for in-kind

Capital reduction

A reduction needs a majority of the partners in number, who together hold at least three-quarters of the capital (DL 35/1967, art. 26). Where the company has an auditor, the draft reduction must go to the auditor. The auditor gives an opinion on its reasons and terms at the meeting (DL 35/1967, art. 29). If the reduction is not due to losses, you must register it and publish it in two local papers (DL 35/1967, art. 29). Creditors have two months from the last publication to object in court, and you cannot start the reduction until this period expires (DL 35/1967, art. 29). The assembly can authorise the manager to buy quotas to cancel them (DL 35/1967, art. 29). A reduction that leaves the capital below LBP 5,000,000 triggers the one-year rule in article 7 (DL 35/1967, art. 7).

• Assembly minutes
• Auditor report
• Publication evidence

Loss of three-quarters of capital

If the company loses three-quarters of its capital, partners must decide within four months of approving the accounts whether to dissolve (DL 35/1967, art. 33). If they do not dissolve, they must immediately reduce the capital by the loss amount, unless they decide to rebuild the capital (DL 35/1967, art. 33). You must publish this decision in two local papers and register it (DL 35/1967, art. 33). If partners fail to decide, any interested party can request judicial dissolution (DL 35/1967, art. 33).

• Assembly minutes
• Publication evidence

Change of manager

The partners or the sole partner can remove a manager at any time, but removing them without legitimate cause triggers damages (DL 35/1967, art. 16). You must register the new manager's name, birth details, and nationality in the Commercial Register within one month (Com. Code, arts. 27 and 31).

• Assembly minutes or sole partner decision
• Manager identification

Conversion

Conversion to a partnership needs every partner's consent (DL 35/1967, art. 34). Conversion into a joint stock company needs the majority for amending the articles. The partners must also have approved the accounts of the two previous years (DL 35/1967, art. 34). Where the approved accounts show net assets above LBP 50,000,000, partners holding half the capital may instead decide the conversion. They must first read the auditor's report certifying the accounts (DL 35/1967, art. 34). A conversion made in breach of these rules is void (DL 35/1967, art. 34). The new SAL must meet the SAL rules on the number of shareholders and minimum capital. Conversion does not create a new legal personality. It only binds third parties one month after publication in the Official Gazette and a local paper (Com. Code, art. 45).

• Assembly minutes
• Auditor report
• Approved accounts for two years

Merger and division

A SARL can merge by transferring its assets to an existing or new company (Com. Code, art. 210). Merging into another SARL requires a majority of the partners in number (Com. Code, art. 211). They must together hold at least three-quarters of the capital (DL 35/1967, art. 26). If the merger increases partner obligations, it requires unanimity (DL 35/1967, art. 26). Only articles 213 bis 8, 9, 12, 13 and 19 of the merger rules apply to SARLs, alongside articles 210 to 213 (Com. Code, art. 213 bis 17). Register the resulting changes in the commercial register within one month (Com. Code, arts. 27 and 31). Confirm with the registry what publication it requires for the merger file. Creditors have one month from publication to object in court (Com. Code, art. 213 bis 9). An objection does not stop the merger. The court may order payment or security. If the company does not provide it, the merger cannot be set up against that creditor (Com. Code, art. 213 bis 9). The surviving company stays liable to the other creditors of the absorbed company. It steps into these debts without creating a new obligation (Com. Code, art. 213 bis 8). Mergers are exempt from stamp duty, transfer taxes, and notary fees (Com. Code, art. 213 bis 21). The merging companies must pay taxes issued before the merger, but they are exempt from providing a social security clearance (Com. Code, art. 213 bis 22).

• Merger project
• Assembly minutes of both companies
• Publication evidence

Dissolution and liquidation

The company dissolves upon term expiry, object completion, loss of assets, or partner agreement (COC, art. 910). The decree adds three grounds of its own. The company must be converted or dissolved if partners exceed thirty for two years. The same applies if capital stays below LBP 5,000,000 for a year, or if partners do not act on the loss of three-quarters of the capital (DL 35/1967, arts. 5, 7 and 33). If partners continue operations after the term, the company extends tacitly year by year (COC, art. 912). Any partner can request judicial dissolution for legitimate cause, such as severe disagreements or failure to perform obligations. You cannot waive this right in advance (COC, art. 914). Commercial companies are only considered dissolved towards third parties one month after publishing the judgment or deed (COC, art. 917).

1. Appoint a liquidator. The articles may name the liquidator, but otherwise the partners appoint one unanimously. Failing agreement, the court appoints one at any partner's request (COC, art. 923). Managers act as depositaries until the appointment (COC, art. 924).
2. Add the liquidation suffix. You must add "قيد التصفية" to all company documents (COC, art. 925).
3. Inventory the assets. The liquidator and managers draw up an inventory and balance sheet (COC, art. 927).
4. Settle debts. The liquidator collects debts, finishes pending work, and pays creditors (COC, art. 928). If a known creditor does not appear, the liquidator consigns the debt (COC, art. 929). The liquidator can call on partners only for sums the company form obliges them to pay or for capital they still owe (COC, art. 930). In a SARL the capital is paid in full at formation. Partners answer only up to their contributions (DL 35/1967, arts. 1 and 8). Therefore, an insolvent SARL goes to the bankruptcy rules rather than to calls on partners.
5. Distribute assets. Partners divide the remaining assets as agreed or as per the articles (COC, art. 922).
6. Strike off. You must notify the tax administration within two months of final cessation (TPL, art. 33). The judge orders the company struck from the Commercial Register (Com. Code, art. 30).

In practice, standard companies must obtain a discharge letter (براءة ذمة) from the National Social Security Fund to liquidate, though offshore companies are exempt. 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. It must owe nothing to third parties and 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

• Forming the company without fully distributing and paying the capital renders it void between partners, though they cannot invoke this against third parties (DL 35/1967, art. 12).
• Contributors in kind, the first managers and the experts are jointly liable to third parties for five years for any overvaluation of contributions in kind (DL 35/1967, art. 10).
• A manager who distributes fictitious dividends faces the penalties for fraud (DL 35/1967, art. 35). Dividends not drawn from real profits can be recovered within five years of the distribution date (DL 35/1967, art. 32).
• A manager who withdraws the deposited capital before formation is complete faces the penalties for fraud (DL 35/1967, art. 35).
• Late or missing registry filings are fined, and the court orders the entry to be made within fifteen days on pain of a doubled fine (Com. Code, art. 37).
• A false statement made in bad faith to the registry carries a fine and one to six months' imprisonment (Com. Code, art. 38).
• An acquisition in breach of the foreign ownership rules is void. Everyone who takes part faces temporary hard labour and a fine of one to three times the value of the right. This includes those who certify or register it knowingly (Decree 11614/1969, art. 16).
• In practice, submitting corporate documents from abroad with only an apostille leads to rejection, because Lebanon requires full consular legalization.
• In practice, picking a company name that is too close to an existing registered company's name causes the registry to reject the file.

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
• Legislative Decree No. 35 of 5 August 1967 on limited liability companies, as amended 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 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.

Other practice guides

• SAL: Joint stock company
• Offshore SAL: Company restricted to activity outside Lebanon
• Holding SAL: Company holding participations
• General partnership: Société en nom collectif
• Limited partnership: Société en commandite simple
• Partnership limited by shares: Société en commandite par actions
• Joint venture: Société en participation
• Foreign branch: Branch or representative office
• Civil company: Société civile
• Sole trader: Individual establishment