Legal Templates

Limited Liability Company Incorporation Agreement

A Syrian template for incorporating a limited liability company and adopting its articles of association. It covers the company’s purpose, term, office, capital and quotas, management, general assembly, audit, profit distribution, dissolution, liquidation and disputes.

Syria
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Contract
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Company Services Contracts
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Published template · Contract

Memorandum of Incorporation and Articles of Association of a Limited Liability Company

First Party: Partner

[Tenant?]

Second Party: Partner

[Second partner name]

Third Party: Partner

[Third partner name]

Preamble

The parties have agreed to establish a limited liability company operating in accordance with the following articles of association:

Chapter One: Company Name, Purpose, Registered Office and Term

Article (1): Establishment, Name and Capital

The partners have established between themselves a limited liability company under the name [Company name] (Limited Liability), having its registered office at [registered office address], with fully paid capital of [capital amount] Syrian pounds, licensed under Decision No. [decision number] of the Ministry of Economy and Foreign Trade / Ministry of Supply and Internal Trade.

Article (2): Company Purpose

The purpose of the company is [company purpose].

Article (3): Term

The term of the company is [number of years] years, commencing on the date of its registration with the Office of the Civil Court of First Instance in [city].

Article (4): Registered Office and Branches

The company’s principal office is in the city of [city]. The managers may transfer the office to any other place with the approval of the General Assembly, and may open branches inside or outside Syria.

Chapter Two: Capital and Quotas

Article (5): Capital

The company’s capital is fixed at [capital amount] Syrian pounds, fully paid upon incorporation at the Commercial Bank of Syria / Agricultural Bank of Syria, pursuant to Notice No. [notice number] dated [date]. It may be increased or reduced in accordance with Article (9) of these Articles.

Article (6): Cash and In-kind Quotas

A- The capital consists of [number of first cash quotas] cash quotas, each with a value of [quota value] Syrian pounds, and [number of second cash quotas] cash quotas, each with a value of [quota value] Syrian pounds, together with in-kind quotas distributed among the partners as follows:

Partner name Number of in-kind quotas Number of cash quotas Value Participation percentage
[Partner name] [number] [number] [value] Syrian pounds [percentage]%
[Partner name] [number] [number] [value] Syrian pounds [percentage]%

B- The following in-kind quotas have been contributed and received by the company:

  1. Mr./Ms. [partner name] contributed a quota consisting of [description of in-kind quota], with an actual value of [value] Syrian pounds, on the date of submitting the licence application.

  2. Mr./Ms. [partner name] contributed a quota consisting of [description of in-kind quota], with an actual value of [value] Syrian pounds, on the date of submitting the licence application.

C- The founders acknowledge the correctness of the value of the stated in-kind contributions and are jointly and severally liable for it.

D- Upon signature of these Articles by the founders, the stated cash and in-kind quotas shall be deemed owned by the company, with all rights and obligations attached to them, and their holders shall be entitled to a corresponding share in the company’s profits and losses and ownership of its assets.

Article (7): Partners’ Liability

Each partner is liable only to the extent of his or her quota in the capital.

Article (8): Transfer and Succession of Quotas

A- Each partner may transfer all or part of his or her quota to one or more partners or to a person who is not a partner. In the latter case, the partners shall have priority over the non-partner after the manager gives them written notice of the proposed transfer, within one month from their receipt of that notice. If more than one partner exercises the priority right, the transferred quota shall be divided among them in proportion to their quotas in the company.

B- Each partner’s quota passes to his or her heirs. If this transfer causes the number of partners to exceed twenty-five, all the heirs shall be treated as one quota.

C- The transfer or succession referred to above shall have no effect except from the date of its entry in the company’s register and the Commercial Register.

D- Acceptance of the quota by the transferee or heir constitutes acceptance of these Articles and of the resolutions of the company’s General Assembly.

Article (9): Increase and Reduction of Capital

A- The capital may be increased by issuing new quotas or converting the reserve capital into quotas, by resolution of the General Assembly.

B- The partners shall have priority to subscribe for the new quotas. If more than one partner exercises this priority right, the quota or quotas shall be allocated among those entitled to priority in proportion to the number of their quotas in the company.

C- The company’s capital may be reduced to not less than 25,000 Syrian pounds, by reducing the number of quotas and redeeming some of them, or by reducing their nominal value, by resolution of the General Assembly.

Article (10): Partners’ Register

The company shall maintain, under the manager’s supervision, a partners’ register recording the names of the partners, each partner’s domicile, the quota owned by each partner, and the amount paid by each partner. Each partner and his or her creditors shall have the right to inspect it and the records of transfers and successions.

Chapter Three: Management

Article (11): Appointment of Managers

The company shall be managed by Mr./Ms. [manager name] as its sole manager from [date] until [date].

Or:

The company shall be managed by Mr./Ms. [first manager name], [second manager name], and [third manager name] from [date] until [date].

Article (12): Powers and Liability of Managers

  1. The manager / managers shall represent the company in its relations with third parties and shall, acting individually / jointly, have all powers necessary to achieve the company’s purposes, conduct business in its name, and conclude contracts and transactions falling within its activities, including in particular:

A- Signing in the company’s name.

B- Appointing, transferring and dismissing workers, and determining their wages, compensation and bonuses.

C- Receiving, paying and transferring funds and operating the company’s bank accounts.

D- Selling and purchasing and concluding immediate, urgent and deferred transactions.

E- Borrowing through credit facilities.

Or:

A- Manager [manager name] shall be responsible for [specified powers].

B- Manager [manager name] shall be responsible for [specified powers].

  1. The manager / managers may not borrow cash in the company’s name, sell or mortgage company real estate, participate in other companies, or undertake [other act], except by resolution of all partners.

  2. Acts of the manager / managers shall be binding on the company without restriction.

  3. The manager / managers shall be jointly and severally liable to the company and third parties for violations of laws or these Articles and for errors in managing the company, particularly its bankruptcy. The company and each partner may bring proceedings against them in this regard, and a discharge granted to them by the General Assembly shall not be effective in respect of these errors.

Article (13): Termination of the Manager’s Authority

  1. The manager’s authority shall terminate and all of his or her powers shall cease in any of the following cases:

A- Dismissal by a reasoned resolution adopted by the numerical majority of partners holding three quarters of the company’s capital.

B- Written resignation, effective from the date on which it is notified to the last partner in the General Assembly; it does not require acceptance by anyone and may not be withdrawn.

C- Absence from work for [number of days] days for a reason other than illness or pilgrimage.

D- Failure to attend three consecutive meetings of the Board of Directors or seven non-consecutive meetings in one Gregorian year.

E- Taking up public employment.

F- Managing a competing company or a company with similar purposes.

G- Conducting, for his or her own account or for the account of a third party, transactions in a trade competing with or similar to the company’s trade.

H- Death.

  1. Termination of the manager’s authority shall not release the manager from liability for compensation arising from the cause of termination.

Article (14): Appointment of a New Manager

If the office of one of the managers ends, the remaining managers must call the General Assembly to appoint a new manager within one month from the date on which the cause of termination arises.

Article (15): Board of Directors

A- The managers may form a Board of Directors consisting of all or some of them and appoint one of them as its chair. They shall comply with the Board’s resolutions, failing which they may be dismissed.

B- The resolution establishing the Board shall determine its powers. Its resolutions shall be adopted by a majority of those present; in the event of a tie, the chair’s side shall prevail. The Board shall meet at the company’s office once each week or when the chair requests a meeting when necessary.

Article (16): Manager’s Remuneration and Travel Expenses

A- The manager shall be entitled to a fixed monthly salary of [amount] Syrian pounds, in addition to a monthly representation allowance of [amount] Syrian pounds. In the event of travel, the manager shall receive twice the daily wage for each travel day as a travel allowance, the cost of travel by land, sea or air in [class] class, and accommodation in a [number of stars]-star hotel with meals.

B- Amounts received by the manager under the preceding paragraph shall not be considered part of his or her profits.

Article (17): Correspondence

A- All company business, whether between the partners, between the company and the partners, or between the company and third parties, shall be in writing.

B- All correspondence sent by the company to third parties shall be by registered letter, and correspondence from third parties shall be accepted only in that manner.

Article (18): General Assembly

  1. A- The General Assembly consists of all partners. It shall be chaired by the manager or by a person selected by it in the manager’s absence, and shall appoint a secretary.

B- The General Assembly shall meet at the company’s office when called by the manager / managers at least once each year, and whenever requested by partners holding one quarter of the capital, in the presence of a representative of the Ministry of Economy / Ministry of Supply. Every partner may attend regardless of the number of quotas held and may appoint another person in writing. Each partner shall have votes equal to the number of his or her quotas and the quotas of the person represented.

C- Notice shall be given by registered letter at least ten days before the scheduled meeting. The notice may include the date of a second meeting if the quorum is not achieved at the first meeting. The meeting shall be lawful when the quorum required for adopting resolutions is achieved. If it is not achieved, the General Assembly shall be called again after one week, and its resolutions shall be valid regardless of the number attending.

D- General Assembly resolutions shall be adopted with the approval of partners holding a majority of the capital, except for amendment of the Articles, which requires the approval of partners holding three quarters of the capital and ratification by the Ministry of Economy / Ministry of Supply. In the event of a tie, the chair’s side shall prevail. A resolution concerning renewal of the company’s term must be unanimous among those present. These resolutions shall bind the company.

  1. The General Assembly shall have authority to:

A- Approve the report of the manager / managers on the company’s activities and financial position.

B- Approve the annual balance sheet. The manager / managers must file it with the Ministry of Economy / Ministry of Supply within ten days of its approval.

C- Approve the auditors’ report. The manager / managers must file it with the Ministry of Economy / Ministry of Supply within ten days of its approval.

D- Deliberate on the matters listed on the agenda.

E- Appoint and dismiss the manager / managers and determine their remuneration.

F- Appoint one or more company auditors from the list prepared by the Ministry of Economy / Ministry of Supply.

G- Determine the method of liquidation upon the company’s dissolution or winding-up.

  1. The deliberations and resolutions of the General Assembly shall be recorded in minutes bearing consecutive numbers and signed by the chair and the secretary.

Chapter Four: Company Finances

Article (19): Auditor

  1. One or more auditors appointed by the General Assembly for a renewable one-year term shall supervise the company’s operations and audit its accounts. For this purpose, the auditor may:

A- Examine whether the company’s books are properly maintained.

B- Examine whether the balance sheet and accounts are prepared in a manner showing the company’s true condition.

C- Inspect the company’s books, accounts, documents and cashbox.

  1. The auditor shall:

A- Prepare a written report for the General Assembly on the company’s condition and balance sheet, the accounts submitted by the manager / managers, proposals for distributing profit shares, and the auditor’s opinion on approving the annual balance sheet without reservation, with reservation, or returning it to the manager.

B- Include in the report an examination of whether the balance sheet and profit-and-loss account presented to the General Assembly conform to the law, the company’s books and its financial condition, and of the manager’s / managers’ position when collecting the data, and notify the Ministry of Economy / Ministry of Supply of violations.

C- Submit the report to the General Assembly.

D- Request the General Assembly to be called at any time if the auditor considers this useful.

  1. Failure to submit the auditor’s report, or to read it before the General Assembly, renders void the Assembly’s resolution approving the accounts and distributing profits.

  2. The auditor or auditors shall be jointly and severally liable for errors committed in their work.

  3. The auditor may not disclose individually to the partners or to third parties information obtained in the course of performing the auditor’s duties, under penalty of dismissal and liability to compensate the company for the damage it suffers as a result.

Article (20): Financial Year

The company’s financial year shall coincide with the Gregorian year, except for the first financial year, which begins on the date of incorporation and ends at the end of the current Gregorian year.

Article (21): Annual Accounts

A- Within one month from the end of the company’s financial year, the manager / managers shall prepare an inventory of its assets and receivables and payables, final accounts for the preceding financial year, a profit-and-loss account, and a report on the company’s activities and financial position during that year, for presentation to the General Assembly, and shall notify the auditor thereof.

B- Each partner may inspect the stated documents during the fifteen days preceding their presentation to the General Assembly.

Article (22): Distribution of Profits and Losses

  1. The company’s annual net profits, after deduction of expenses and other costs, shall be distributed as follows:

A- 5% of profits shall be set aside to form a reserve. This appropriation shall cease when the total reserve reaches [percentage]% of the capital. The reserve shall be used for the benefit of the company.

B- A first profit share of 5% of the value of their quotas shall be distributed to the partners. If the company’s profits in a given year do not permit distribution of this share, it shall not be paid from profits of previous years.

C- 10% of the remaining profits shall be granted to the managers as remuneration, irrespective of their salaries or rights to profits from their quotas.

D- A percentage of profits shall be allocated to the company’s workers. This percentage shall be determined upon the proposal of the manager / managers and with the approval of the General Assembly.

E- The balance of profits shall be distributed to the partners as an additional share, or carried forward to the following year to form an extraordinary reserve or for extraordinary amortisation, by resolution of the General Assembly upon the proposal of the manager / managers.

  1. Profits shall be paid at the company’s office on the date determined by the manager / managers.

  2. Losses shall be distributed among the partners in proportion to their quotas, without any partner being liable for more than the value of his or her quota.

Article (23): Dissolution and Liquidation

A- The company shall be dissolved upon expiry of its term unless the General Assembly renews it for an equivalent term by a unanimous resolution of those present, or upon loss of 51% of its capital, or bankruptcy.

B- If the company is dissolved, wound up, or its term expires, the General Assembly shall determine the method of liquidation and appoint one or more liquidators for that purpose. The manager’s / managers’ authority shall end upon appointment of the liquidator, while the authority of the General Assembly shall continue until completion of the liquidation.

Chapter Five: Disputes

Article (24): Disputes and Liability

A- The manager / managers may be sued for errors in managing the company, particularly its bankruptcy. Each partner and the General Assembly may bring such proceedings.

B- Any dispute between a partner and a manager, or between a partner and the company, concerning the partner’s relationship with it in that capacity, shall be submitted to the General Assembly at its annual or extraordinary meeting.

Article (25): Compliance with Laws and Regulations

The company, its manager, its General Assembly and its auditor shall comply with the laws and regulations in force concerning the incorporation of limited liability companies, and with the decisions of the Ministry of Economy / Ministry of Supply concerning the company.

Executed in Damascus on [date].

Founders

Name Signature
[First founder name] [First founder signature]
[Second founder name] [Second founder signature]
[Third founder name] [Third founder signature]
[Fourth founder name] [Fourth founder signature]