Starting a business is one of the most exciting and rewarding experiences you can have. But where do you begin? There are several ways to approach creating a business, along with many important considerations. Among the hundreds of decisions that a company founder must take, one of the first is choosing the most suitable corporate structure. From the many types that exist, the one that is the most often selected in Egypt recently is establish a Simplified Joint-Stock company.

What is meant by simplified joint stock companies?

A company established by one or more persons and it does not require a minimum capital in its articles of association and has the possibility of issuing multiple types and classes of shares with varying rights, obligations and restrictions. its management shall be by one or more directors, a board of directors, or otherwise and it doesn’t require general assemblies. the shareholders exercise these competencies and determine who will carry out them. The quorum required for the validity of shareholders’ meetings and the issuance of decisions shall be determined in the company’s articles of association. It is one of the most modern types of companies in the world nowadays.

The simplified joint stock company is considered to be one of the manifestations of the developments in company law, through which the legislator has recognized the complete freedom of the partners to determine the terms of its organization and operation in its articles of association, which makes it an attractive company.

However, this company is fraught with risks:

Firstly: for the partners who are not subject to the provisions of corporate law to protect their interests, but rather to the terms of the contract with all the shortcomings that this may entail.

Secondly: it is perilous because the legal system to which this company is subject is unclear and requires a fine analysis of its provisions and calls on the researcher, the lawman and even the judge to set out a list of the provisions applicable to the simplified joint stock company, as well as those which should be excluded, given that this work falls under the competence of the legislator and not under their competence.

Advantages of establish simplified joint stock companies

There are main advantages of establish a simplified joint stock company, and they are as the following:

  1. The creation of this company does not require a public deed, it is constituted by a private document, with the exception of those cases in which real estate property is contributed.
  2. No minimum capital shall be required in its articles of association.
  3. Possibility of issuing multiple types and classes of shares with different rights, obligations and restrictions.
  4. Its management shall be by one or more directors, a board of directors, or otherwise.
  5. It does not require general assemblies. the shareholders exercise these competencies and determine who will carry out them.
  6. The quorum required for the validity of shareholders’ meetings and the issuance of decisions shall be determined.

Data should be available while establish simplified joint-stock companies

The articles of association of establish a simplified joint-stock company must include particularly the following data:

  • The company’s name.
  • The company’s head office.
  • The company’s purpose.
  • The company’s authorized capital, if any, the issuer and payer.
  • The shares’ number, their types and classes, if any, the nominal value, and the rights related to each type or class.
  • The company’s term
  • The company’s management and the relevant provisions.
  • Transfer of shares.
  • Shareholders’ meetings, and the quorum required for their validity.
  • Shareholders’ decisions and the quorum required for their issuance.
  • The start and end date of the fiscal year.
  • Any other terms, conditions or statements that the founders or shareholders agreed to be included in the company’s articles of association and do not conflict with the provisions of the law.

If you need a legal assist while establish a Simplified Joint-Stock company, Get in touch with our experts at “Consortio Law Firm”, to provide the proper legal assistance, which ensuring the successes of your business.

Just Contact us Now via the phone number 002 01028806061 or email us via WhatsApp or email Info@consortiolawfirm.com.