The Shareholders’ Rights

The rights of shareholders in companies are numerous in accordance with Law No. 159 of 1981 and its executive regulations and Law No. 72 of 2017. The law guaranteed the protection of these rights with some measures through several rights that the legislator has maintained to ensure that all shareholders receive equal justice in the companies they invest in. This protection helps attract foreign investment and more local investment. We detail in this article many of those rights.

1- The rights of the shareholder to invite the convening of the General Assembly:

The shareholder has the right to invite the Board of Directors to convene an Ordinary General Assembly if requested by a number of shareholders whom ownership represents at least 5% of the company’s capital.

The shareholder has the right to have the company’s announcement of the date, location, and agenda of the General Assembly at least twenty-one (21) days prior to convening date, and the invitation shall be announced by hand delivery, or published in two newspapers, or by mail.

2- The rights of the Shareholder to participate and vote in general or special assembly meetings:

The shareholder has the right to attend, actively participate, and vote in the ordinary or extraordinary general assembly meetings, even if the company’s Articles of Incorporation stipulates otherwise. In doing so, he may delegate a person other than the members of the board of directors or the company’s employees to attend the general assembly., and general assembly meetings may be held for shareholders, the shareholder may participate in its deliberations and vote on its resolutions by means of modern technology in accordance with the regulatory procedures and regulations issued in implementation of the Companies Law and the decrees issued from the General Authority for Investment and Free Zones.

The shareholder has the right to have the company’s board of directors work to facilitate the participation of the largest number of shareholders in the general assembly meeting, including choosing the suitable place and time.

The shareholder has the right to discuss the topics included in the General Assembly’s agenda and direct questions about them to the members of the Board of Directors and the auditor. These questions must be answered to the extent that does not expose the company’s interest to harm.

The shareholder has the right to have automated voting on the clauses of the agenda of any General Assembly meeting after the date of publishing the invitation for the meeting, provided that the period for allowing automated voting shall not less be than three (3) days before the date of the convening, and the automated voting on any clause of the General Assembly meeting stops upon the end of the discussion and vote on that clause in that assembly.

The shareholder has the right to review the minutes of the company’s general assembly meeting, and the shareholder has the right to have the company announce of the results of the general assembly immediately upon its ending.

3- The rights of the Shareholder in preparing the agenda of the General Assembly meeting:

The Board of Directors, while preparing the agenda for the company’s general assembly, shall take in consideration the topics that the shareholder wishes to include in the agenda The shareholders who own at least 5% of the company’s shares may add one or more topic to the General Assembly’s agenda while its perpetration.

Upon publishing the invitation of the General Assembly, the shareholder has the right to access the information related to clauses of the General Assembly’s agenda, through the company’s website, especially the report of the Board of Directors, the auditor, the financial statements, and the report of the Audit Committee, in order to enable him to take an informed decision regarding them.

4- The rights of the Shareholder related to the company’s articles of incorporation:

The shareholder has the right to request reviewing a copy of the company’s contract and articles of incorporation unless the company publishes them on its website.

The shareholder has the right to be informed about any fundamental developments that occur within the framework of the company’s activity and are not available to the public, and which may affect his assets in the company and his financial situation, or the general track of his business or his subsidiaries.

5- The rights of the Shareholder to elect members of the Board of Directors:

The shareholder has the right for the company to announce on the website information about candidates for members of the Board of Directors upon publishing or directing an invitation to convene the General Assembly, provided that this information include a description of the candidates’ experiences, qualifications, skills, jobs, previous and current memberships, and the company must provide a copy of this information at its headquarter and website. The shareholder has the right to nominate members of the Board of Directors and elect them.

6- The rights of the shareholder to petition the administrative decisions:

The shareholder has the right to submit a petition against the administrative decisions issued by the General Authority for Investment and Free Zones to the Petition Committee as per the provisions of Investment Law No. 72 of 2017 and Law No. 159 of 1981. The committee issues its decree within sixty (60) days from the date of submitting the petition, and its decree in this regard is final and binding on the Authority.

7- The rights of the shareholder to request supervision over the company’s business:

The General Authority for Investment and Free Zones is responsible for examining any complaint submitted by the shareholders or other stakeholders regarding the implementation of the provisions of Law No. 159 of 1981.

The shareholder(s) who own at least 5% of the company’s capital have the right to request the competent judicial authority to order an inspection of the company; if they discover that the actions of the members of the board of directors or the auditor in the company’s affairs is suspicion.

The shareholder has the right to question the members of the Board of Directors, file a liability lawsuit against them, and challenge the invalidity of the resolutions of the public and private shareholders’ assemblies in accordance with the conditions and restrictions stated in the companies’ law and the company’s articles of incorporation.

8- The rights of the shareholder to request inspection of the company’s business:

The General Authority for Investment and Free Zones and shareholders holding at least 10% of the capital may request inspection of the company for serious violations attributed to members of the board of directors or auditors in the performance of their duties stipulated by law.

9- The rights of the shareholder to request the suspension of the General Assembly:

The General Authority for Investment and Free Zones may upon the request of the shareholders who own at least 5% of the company’s shares, and once it has proven the seriousness of the submitted request, issue a decision to suspend the resolutions issued by the company’s General Assembly that caused harm to some shareholders or brought special benefit to members of the Board of Directors or others, if it benefits a specific category of shareholders.

10- The rights of the shareholder to receive profits:

It is known that every company has a fiscal year lasting twelve (12) months. The company’s articles of incorporation determine the beginning and end of the fiscal year. The company’s board of directors must prepare, within a period of three (3) months from the end of the company’s fiscal year, the annual financial budget and a statement of profits and losses, in addition to the Board of Directors’ report on the company’s business during the fiscal year in preparation for presenting it to the General Assembly to discuss this data and take a decision in regard to it, including making a decision about distributing profits or not.