Howard L. Stovall


Translations

LEGISLATIVE DECREE NO. 151 (1952)
[Including Some Amendments Thereto]

The Law on Commercial Companies and Firms
formed outside Syrian Arab Republic Territory
and having a Branch or an Agency in Syria

[Unofficial Translation
by
Howard L. Stovall]

PART I

Companies Formed outside
Syrian Arab Republic Territory

CHAPTER I
Definition of Companies formed outside
Syrian Arab Republic Territory

Article 1

Companies addressed in this Law mean companies formed outside Syrian Arab Republic territory, regardless of their type, whether corporations, partnerships, co-operative societies or the like, and which have a branch or an agency in Syria.

CHAPTER II
Branches of Companies incorporated outside
Syrian Arab Republic Territory

Article 2

The companies referenced in Chapter I shall neither be entitled to establish a branch in Syria working under their trade name, in their name and for their own account, nor carry on the activity of such branch, unless registered in a special register kept in the Ministry of Economy and Foreign Trade (Companies Department).

As for foreign government enterprises or companies in which a foreign government has a share or association, when desiring to establish a branch in Syria or carry on their activity therein, they shall also be liable before doing so, to register with the said department, subject however to obtaining, after submission of the documents specified in this Law, a prior special authorization issued by the President of the Republic on the recommendation of the Ministry of Economy and Foreign Trade. When such authorization is refused, such enterprises shall have no recourse of any sort.

Article 3

(1) The company or its general manager shall file the application for registration with the Ministry of Economy and Foreign Trade, indicating therein the name of the company, its place of formation, its head office, its type, purposes and capital, its main branch office (and dependent branches, if any) in Syria, and its activity therein.

(2) The Ministry of Economy and Foreign Trade may require additional information in the application for registration.

(3) The following must be attached to the application:

  1. In the case of corporations, a copy of the articles of association and by-laws signed by the chairman of the board of directors or his deputy; in case of partnerships, a copy of the partnership contract signed by the managing partners. These documents must be legalized by the competent authorities.

    Such documents may be accepted if extracted from the Commercial Registry, or any such office, and duly legalized.

  2. A certificate, duly signed by the person authorized to sign and legalize, evidencing the company's paid-in capital together with reserves exceed an amount equivalent to Syrian Lira 50,000, if it is a corporation. (The minimum may be changed by decree.) The Minister of Economy and Foreign Trade may disregard this condition if its investigation leads to the conclusion that the company's net assets exceed the above figure.

  3. In the case of a banking company, a copy of its balance sheet for the financial year preceding the date of application for registration, signed by the chairman of the board of directors or his deputy.

  4. A power of attorney (made before a notary public or officer having authority to attest such powers, at the company's head office, legalized by the competent authorities, or made before a notary public in Syria after duly evidencing the ability of the principal to sign on behalf of the company), by which the company appoints a general manager in Syria, having actual residence in the area of the company's main office and connected directly with the head office.

    This general manager in Syria must be either a person of Syrian Arab Republic nationality, or a commercial company formed in the Syrian Arab Republic and having an office or branch registered in the area of the Syrian main branch of the company. All partners or shareholders of such [Syrian] company must be nationals of the Syrian Arab Republic.

    The Ministry of Economy and Foreign Trade may, with the approval of the President of the Republic, allow the company's general manager to be a natural person of the nationality of the country in which the company is formed, or [the nationality of the country in which] the company has a branch.

    When the general manager is a company, the application shall be accompanied by a copy of the said company's articles of association and basic by-laws, together with duly certified documents indicating the person authorized to sign on its behalf.

(4) All documents filed by the company shall be accompanied with an Arabic translation certified by a sworn translator approved by the Ministry of Economy and Foreign Trade.

Article 4

The company's general manager shall be deemed to have, legally and by the mere fact of his appointment, the power to enter into contracts and sign any documents relating to the company's business in accordance with its by-laws, as well as the right to represent it before government departments and courts in all stages, whether as plaintiff or defendant or in any other capacity, and to accept service and receive all communications directed to the company's main branch in Syria. He shall also be deemed to have the power of receiving and spending money, issuing receipts and keeping the company's accounts relating to all its transactions in the territory of the Syrian Arab Republic.

Article 5

(1) The Head of the Companies Department shall issue to the applicant company or to its general manager, within two months of the date of filing the application with the documents mentioned in Article 3 above, a certificate of registration in exchange for payment of a fee amounting to LS125.

(2) If said certificate is not issued within the said time limit for reasons at the discretion of the Ministry of Economy and Foreign Trade, the company may refer the matter to the President of the Republic, who shall have the power to order or refuse registration of the company. His decision in this respect shall be conclusive and not subject to any recourse of any sort.

(3) This certificate shall be published in the Official Gazette.

(4) The mere production of this certificate shall be evidence that the company has fulfilled the requirements of Article 3 above.

(5) This certificate, or a certified true copy thereof, shall be posted in a conspicuous place in the company's office in Syria and in each dependent branch.

Article 6

Companies registered in accordance with the provision of this Law shall be recognized as having a juristic personality in Syria from the date of their registration.

Article 7

Companies formed outside the territory of the Syrian Arab Republic and duly registered at the Companies Department shall not have the right, beyond carrying on their own business, to represent in Syria other companies formed abroad.

Article 8

(1) When the office of the general manager becomes vacant because of his death or for any other reason, the company shall:

  1. Notify the Ministry of Economy and Foreign Trade (Companies Department) of such an event within one month of the date of the vacancy.

  2. Appoint a successor within not more than two months from the date of the vacancy.

(2) In case of violation of these conditions, the Minister shall issue an order forbidding the company from carrying on its business pending the appointment of the successor in accordance with the provisions of Article 3(3)d. of this Law.

Article 9

(1) The company shall submit to the Ministry of Economy and Foreign Trade (Companies Department) a declaration of any amendment in the basic by-laws of the company, and any increase or decrease in its capital, as well as any change in the identity of its general manager.

(2) Attached to this declaration shall be a certified copy of the resolution of the general assembly of the company authorizing this amendment, or the power of attorney appointing the new general manager. All such documents to be signed by the chairman of the board or his deputy (or extracted from the Commercial Registry) and legalized by the competent authorities).

(3) The company must appoint a special manager for each dependent branch which the company opens in Syria, such special manager being directly connected with the general manager in Syria. A special manager shall be either a natural person with Syrian Arab Republic nationality actually residing in the area of the branch, or a commercial company formed in the Syrian Arab Republic and having an office or a branch registered in the area of the [dependent] branch, and where all partners or shareholders have Syrian Arab Republic nationality.

The company shall file with the Ministry of Economy and Foreign Trade a declaration upon opening the branch, attaching a copy of the power of attorney appointing the manager. The company shall receive, within a month of the date the required documents are deposited, a receipt thereof in accordance with the provisions of Article 12 of this Law. Such receipt shall be posted in a conspicuous place in the branch office.

In case the branch is closed, the company shall file with the Ministry of Economy and Foreign Trade a declaration thereof within one week of such closing. The company shall obtain an official receipt thereof in accordance with the provisions of Article 12 of this Law.

Article 10

(1) The registered company shall file a written declaration in the Companies Department giving the addresses of the company's office in Syria and the addresses of the dependent branches therein, and any change in such addresses. This declaration shall be neither subject to fees nor to publication.

(2) It shall also post a conspicuous sign outside the building in which the company's office and dependent branches are located.

(3) It shall also keep in Syria all accounts of the business carried on by it in the territory of the Syrian Arab Republic, including profit and loss accounts.

(4) It may not offer its stocks or bonds in public subscription within the territory of Syria, unless authorized by the Minister of Economy and Foreign Trade.

[Translator's Note: Additional paragraph regarding public subscriptions has been omitted for present purposes.]

Article 11

If the company ceases to carry on its business in the territory of Syria or becomes bankrupt, or merges into another company, it shall send notification of the same to the Ministry of Economy and Foreign Trade (Companies Department) under the conditions stated in Articles 8 and 9.

Article 12

The Head of the Companies Department shall give the company a receipt of the declarations made in accordance with Articles 8, 9 and 11, upon payment of a fee, such receipt to be published in the Official Gazette.

Article 13

Amendments made by the company in its basic by-laws or any other changes, whether with respect to persons contracting with the company or third parties, shall not be effective unless the declarations specified in the preceding articles have been published in the Official Gazette.

Article 14

All companies shall show on their correspondence, invoices and all printed material issued from them, their main office in Syria, their dependent branches therein, the addresses of those offices and the number of their registration at the Companies Department.

Article 15

Any applicant may inspect in the Companies Department the entries in the Register of companies subject to this Law, and the documents held in the files of these companies by the said department, or may obtain a certified copy or description of such entries and documents in exchange for payment of a fee to be fixed by a decision of the Minister of Economy and Foreign Trade.

Article 16

Any main office or branch in which the company carries on its business shall be considered a legal domicile for the company, and all notices regarding any dispute arising from the business of any such branch may be sent to the branch concerned. The company's main office shall also be considered its legal domicile in all matters relating to the business of its branches.

Article 17

Banking companies shall file in the Ministry of Economy and Foreign Trade (Companies Department) within six months of the end of the fiscal year a copy in Arabic of their balance sheet for the preceding financial year certified by their representative in Syria.

CHAPTER III
Agencies of Companies formed outside
Syrian Territory incorporated abroad

Article 18

Within the meaning of this chapter, agencies of companies formed outside the territory of the Syrian Arab Republic shall mean:

  1. Commission agents.

  2. Distributing agents for their own account.

  3. Distributing agents for the account of the company.

  4. Agents for airline companies.

  5. Agents for cinema film companies.

  6. Agents for sea navigation companies.

  7. Any other similar agencies.

Article 19

Whoever undertakes in Syria any of the agencies specified in Article 18 above shall, within the month following his commencing to work for such agency, apply to the Ministry of Economy and Foreign Trade for the registration of his agency and fill in the declaration form prepared for this purpose in two copies under his signature and with the legal stamps, giving the following particulars:

  1. The principal company's name and trade name.

  2. The principal company's head office.

  3. The country where such company is formed.

  4. The agent's name, its nationality, trade name, place of business, and commercial registry number.

  5. The agent's place of residence.

  6. Any other additional information as may be required by the Ministry.

Such declaration shall be accompanied with (i) a copy of the agency or contract certified as to its conformity to the original by the agent in person, in the presence of a sworn officer of the Ministry; and (ii) its Arabic translation duly certified by a sworn translator approved by the Ministry of Economy and Foreign Trade. The said Ministry may require that the power be duly legalized by the competent authorities.

Article 20

The agent filing the application for registration under the preceding article must be directly connected with the company. The Ministry may, however, accept the registration of an agent connected with a general agent of the company whose authority covers several countries.

Article 21

The agent shall be either a natural person of Syrian Arab Republic nationality actually residing in the area of the agency in Syria, and registered in the commercial registry pertaining to him, or a company formed in the Syrian Arab Republic territory having an office or branch registered in the area of the agency in Syria, and with all partners or shareholders have Syrian Arab Republic nationality.

Article 22

(1) The head of the competent department shall deliver to the agent a certificate of registration within one month of the date of presentation of the application with the documents specified in this Law, in exchange for payment of a registration fee which shall be fixed by a decision of the Ministry of Economy and Foreign Trade, according to the category of the agencies.

(2) If this defined period elapses without the certificate being issued for reasons at the discretion of the Ministry of Economy and Foreign Trade, the agent shall have the right to refer the matter to the President of the Republic, who shall order or refuse the registration, and whose decision shall be final and not subject to any recourse.

Article 23

The agent shall file an application for registration of any modification or change relating to the declaration and agency (or contract), or the commitments specified in Articles 19, 20 and 21, within a period of two months from the date of the modification or change. The competent department shall deliver a receipt thereof free of charge.

Article 24

No person or company shall claim the status of agent for any company formed outside Syrian Arab Republic territory, or derive any advantage from such status in his relations or correspondence with official authorities, courts and commercial firms unless he has completed the registration procedures in accordance with the provisions of this Law. The registration number of the agency shall be indicated in all correspondence and invoices issued by the agent acting as such.

PART II

Merchants Having a Main Office outside
Syrian Arab Republic Territory

CHAPTER I
Definition of Merchants Having a Main Office
outside Syrian Arab Republic Territory

Article 25

Merchants addressed in this Law mean those whose main office is situated abroad and who have a branch or agency in Syria.

CHAPTER II
Branch of a Merchant Having a Main Office outside
Syrian Arab Republic Territory

Article 26

The merchant referred to in Chapter I of this Part [II] shall not establish a branch in Syria working under his trade name, in his name and for his account, or carry on the business of said branch, unless he is registered in a special register kept at the Ministry of Economy and Foreign Trade (Companies Department).

Article 27

The merchant intending to open a branch in Syria, or the general manager, shall file the following documents with the Ministry of Economy and Foreign Trade:

(1) An application for registration, giving the name of the merchant, his trade name, nationality, main office, types of trade, and which types he carries on in Syria, his main office (his branch) therein and dependent branches. The Ministry may require additional information.

(2) A duly certified copy of his commercial registration in the place where he has his main office.

(3) A power of attorney whereby he appoints his general manager in Syria, within the meaning (and under the same conditions) specified in Articles 3 and 4 of the Law.

(4) Each document submitted by the merchant or his general manager shall be accompanied by an Arabic translation duly certified by a sworn translator approved by the Ministry of Economy and Foreign Trade.

Article 28

The provisions of Articles 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 of this Law shall apply to the merchant addressed in this Chapter.

CHAPTER III
Merchants Having a Head Office Abroad
and an Agency in Syria

Article 29

Whoever undertakes in Syria an agency of a merchant having a head office abroad shall be subject to the provisions of Chapter III of Part I of this Law.

PART III

CHAPTER I
General Provisions

Article 30

(1) All importers shall indicate in all correspondence presented to state departments, and in the import licenses they seek from the economic departments, the name of the agent or general manager of the company or the firm from whom they import, and the agency's or branch's registration number in the relevant register.

(2) The Ministry of Economy and Foreign Trade may disregard this condition in exceptional circumstances, subject to the Minister's written approval.

Article 31

(1) In the event of a dispute as to the status of the business for the purpose of enforcing the provisions of this Law, the Civil Court of First Instance shall have jurisdiction to determine whether the business carried on in the Syrian Arab Republic by a company formed abroad or by a merchant whose main office is abroad constitutes establishment of a branch in Syria, working in the name of, and under the trade name of, the company or the merchant subject to the provisions of Chapter II of Part I, or of Chapter II of Part II, or constitutes the opening of an agency subject to the provisions of Chapter III of Part I, or Chapter III of Part II.

(2) The court may consider, as constituting the establishment of a branch in Syria, all or some of the following factors, the enumeration of which is not exhaustive:

  1. Hiring workers paid by the company or the merchant as the latter are addressed in this Law.

  2. Purchasing or renting real estate in the name of the company or the merchant.

  3. Opening a bank account in Syria in the name of the company.

  4. Listing the company or the merchant in the telephone directory.

  5. Subscribing to a post-office box or a telegraph address in the name of the company or the merchant.

CHAPTER II
Penalties

Article 32

(1) Anyone who undertakes any commercial business within Syria in the name of a company, firm or merchant who is obligated to register under this Law, before obtaining the certificate of registration from the Companies Department in the Ministry of Economy and Foreign Trade, shall be punishable by a fine from LS250 to 10,000.

(2) Anyone who undertakes within Syria any commercial business as an agent for a company, firm or merchant who is obligated to register their agencies under this Law, without applying to the Ministry of Economy and Foreign Trade for the registration of such agency within the time limits specified in this Law, shall be punishable by the same penalty as specified in paragraph 1 of this article.

Article 33

(1) Any company or merchant addressed in this Law, who contravenes the provisions of Articles 7, 8, 9, 10, 11, 14, 17, 28 or 29 hereof, shall be punishable by a fine from LS100 to 1,000.

(2) Any agent of a company or a merchant addressed in this Law, who contravenes the provisions of Article 23 hereof, shall be punishable by a fine from LS10 to 100.

Article 34

Any general manager of a company or merchant, who fails to notify the Ministry of Economy and Foreign Trade of the company or merchant ceasing to carry on business or being declared bankrupt, shall be punishable by a fine from LS100 to 1000.

Article 35

Any general manager of a company or a merchant who, being served with an order forbidding the company or merchant from carrying on business in Syria in accordance with the provisions of this Law, but who continues to carry on such business, is punishable by imprisonment from eight to sixty days or by a fine from LS250 to 10,000, or both punishments.

Article 36

Any person, making false and bad faith statements in any of the documents required in this Law, shall be punishable by a fine from LS100 to 1,000, or by imprisonment from one to six months, or both punishments.

Article 37

Employees of the Companies Department and employees of the economic departments in the governates, being duly sworn and vested by the Ministry of Economy and Foreign Trade to enforce the provisions of this Law, shall have the status of judiciary officers [having inspection authority] and their reports shall be valid unless contrary evidence is established.

Article 38

(1) The Director of Economic Affairs in the Ministry of Economy and Foreign Trade, and directors and heads of economic departments in the governates in their respective authorities may request the Attorney General to prosecute before the competent courts any company, merchant or agent of a company or merchant, addressed in this Law, when they contravene its provisions. The court may order the suspension of the activity of the company or merchant in Syria, or the activity of the company's agent or merchant's agent (in respect to such agency) until they comply with the provisions of this Law. The court may also impose the fine provided for herein.

(2) The Ministry of Economy and Foreign Trade may refuse to grant import and export licenses to any person contravening the provisions of this Law until such person complies with same.

Article 39

In addition to the penalties provided for in this Law, the Minister of Economy and Foreign Trade may issue an order cancelling the registration, or suspending the activities, of the companies, firms or merchants which have branches or agencies in Syria, in any of the following cases:

  1. If they contravene Syrian laws and regulations in force, or if the company or its general manager contravenes its basic by-laws.

  2. If they refuse to execute a judgment given against them by Syrian courts.

  3. If such measure becomes necessary because of public order or the country's national interest.

In the cases specified in paragraph c., the refusal to register the company or the cancellation of such registration shall be made with the approval of the President of the Republic.

Article 40

Any secret agreement or contract intended to fully or partially evade the application of the provisions of this Law shall be entirely null and void and shall have no effect as between the contracting parties thereto or as to third parties.

CHAPTER III
Transitional Provisions

Article 41

(1) Companies or merchants addressed in Chapter II of Part I and in Chapter II of Part II, who are not registered in accordance with the provisions of Legislative Decree 103 dated 30 May 1949 in the Ministry of Economy and Foreign Trade (Companies Department), must register with the said department in accordance with the provisions of this Law within six months from the date of its publication. The registration of those who registered in accordance with the said legislative decree shall remain in effect, and they must comply with the provisions of Articles 3(3)d. and 9(3) of this Law.

(2) Merchants addressed in Chapter II of Part II of this Law who are, before its publication, registered in the Commercial Registry must comply with the provisions of this Law and produce the requested documents within six months from the date of its publication.

Article 42

Agents in Syria having, before the issuance of this Law, agencies or contracts with companies formed outside Syrian Arab Republic territory, or with merchants whose main office is abroad, as addressed in Chapter III of Part I and Chapter III of Part II of this Law, must promptly register their agencies in accordance with its provisions within six months from the date of its publication.

Article 43

In case the companies, merchants or their agents neglect to follow Articles 41 and 42, they shall be forbidden by a judgment of the Court of First Instance from carrying on activity until they execute the provisions of this Law. They shall also be subject to the penalties specified in Article 32 hereof.

Article 44

The Council of Ministers shall decide on applications presented in performance of the provisions of this legislative decree by non-Syrian representatives who are not of the nationality of the country where the company has been formed, as well as applications by non-Syrian agents and managers, within two months from the effective date of this legislative decree. The failure of the Council of Ministers to respond to such applications shall be considered as a legal refusal thereof. Any decisions taken in this respect by the Council of Ministers shall be conclusive and not subject to any recourse whatsoever.

Article 45

(1) After the elapse of the two month period mentioned in Article 44 (added to [the original text of] Legislative Decree 151 of 3/3/1952), all agencies and the positions of representatives and managers of branches for which no applications have been submitted to the Council of Ministers, or whose applications have been rejected, shall be transferred to natural or juristic persons fulfilling the conditions stipulated in the above-mentioned Legislative Decree 151.

(2) Effective as of the beginning of 1963, all agencies registered in the name of non-Syrian persons must be transferred to natural or juristic persons fulfilling the conditions stipulated in the above-mentioned legislative decree.


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