LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Company Registration in Egypt |

Company Registration in Egypt

In Egypt, the most well-known type of company is the Limited Liability Company (LLC). Egyptian LLC is a separate legal entity which is different from the people who run it.

In the event of a case against the company, sole merchants are at risk and for individuals in partnerships, their personal assets are at stake, yet if it is an LLC, shareholders are simply responsible up to the worth of the subscribed share capital. In Egypt, LLC can be fully owned by a foreigner.

Name of Company

The name of the company in Egypt is by and large thought from the object of the company and it should end with or incorporate at some place, ‘Limited Liability Company' or a suitable shortened form. When the name is accepted by the Registrar, the company name is reserved for a period of 10 days.
Certain words, for example, those proposing governmental patronage are precluded.

Company’s registered office

It is expected from each company to establish a registered office in Egypt where official reports of the company and correspondence might be lawfully served. It is where documents might be legitimately served to the company and maintain a Register of Partners is a requisite. Register of Partners should contain the accompanying:
Name, identity, house, and work of the partners
Number of shares every partner holds
Total sum paid for the shares possessed by the partners.
Data connected with task or share transfers.

Directors

For LLC only one director is needed and either a person or a corporate entity can be a director. There is a prerequisite of having one director who should be an Egypt ‘s resident however, there are no limitations on identity or residency of different directors. Nominee directors are permitted.
Here are the accompanying requirements regarding a director-
While managing a limited liability company, there should be somewhere around one head of Egyptian ethnicity. Their name should be in the Memorandum of Association however it isn't needed for them to be among the shareholders.

Directors might be delegated for a fixed term or on indefinite time period, however if there arises an occurrence of the fixed term, it should be determined in the Memorandum of Association.

Except if authority is restricted by the Memorandum of Association, directors have full delegation to address the company.

For a foreign proprietor, it is expected to acquire a residence visa, where his paid-up capital ought not to be under €19,000.

It is expected for LLC to shape an administrative board comprising somewhere around three shareholders, for the situation where the quantity of shareholders surpasses ten.

The administrative board has the authority to check the bookkeeping records of the company, and they can likewise ask directors to give reports and survey the company's financial stands before accommodation to the meeting.

Shareholders

In the event of LLC, there is a prerequisite of at least two shareholders and limit of fifty shareholders, there is no limitation on ethnicity or residence. Corporate shareholders are allowed.

Share Capital

Under this, base share capital is EGP 1000 (around EUR 150) and the absolute capital should be completely paid upon the company’s incorporation.

Recording Requirements

It is expected from Egyptian LLCs to record audited yearly budget summaries and yearly tax returns.
After the accommodation of the important documentation with the Registrar, the incorporation time frame is for a week.

Benefits of establishing a Limited Liability Company in Egypt

In Egypt, LLC requires just a single director. Under this, there is a prerequisite of not less than one director of Egyptian ethnicity.
In this, the director can be an individual or a company and nominee directors are permitted.
Egyptian LLC can be fully owned by a foreigner.
On shareholders, there are no identity or residency limitations. Any person or a corporate entity can be a shareholder.
Egyptian LLC’s incorporation requires just a single week to finish the consolidation procedure.
In Egypt, Limited Liability Company has a more prominent capacity to raise finance.
Selling shares help Egyptian LLCs to raise capital, though shares can be sold to an outsider only if the partner has priorly offered his/her shares to other partners but they refused to accept them, after the period of at least one month from the day on which the offer was refused.

FAQs

Concept of LLP

LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.

Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Structure of LLP

LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

Advantages of LLP

LLP form is a form of business model which:

(i) is organized and operates on the basis of an agreement.

(ii) provides flexibility without imposing detailed legal and procedural requirements

(iii) enables professional/technical expertise and initiative to combine with financial risk-taking capacity in an innovative and efficient manner

Other Countries where this form is available

The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

Difference between LLP & ‘Traditional Partnership’

Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct

Difference between LLP & Company

A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.
The management-ownership divide inherent in a company is not there in a limited liability partnership.
LLP will have more flexibility as compared to a company.
LLP will have lesser compliance requirements as compared to a company.

Our Blog

Name of Company Company’s registered office Directors Shareholders Share Capital Recording Requirements Benefits of establishing a Limited Liability Company in Egypt FAQs Blog