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| 282784214 | Capital Companies | 1) Relies on money 2) Divided into shares; available for public subscription or on the stock exchange | |
| 282784215 | Characteristics of Capital Companies | - Partners are only heled liable for the company's debts to the extent of the shares they bought. -If the partner died or disappeared or anything happened to him, it will not affect the continuity or survival of the company | |
| 282784216 | Type of partners in companies that combine JSC and partnerships | - Joint Liability Partners - Shareholders | |
| 282784217 | Definition of Joint Stock Companies | A company whose the capital is divided into shares of equal values and may be exchanged | |
| 282784218 | Naming and Capital of JSC | - Name: Must reflect the object and purpose of establishment and NO names of partners in it -Capital: Raises capital through nominal shares of equal values | |
| 282784219 | Bearer Shares | - Not a share who is coming from a formal authority & can be transfered via the physical document - LIMIT in JSC: doesn't exceed 25% of the total shares of all issues - Doesn't have the right to vote in GA - Must be fully paid in cash | |
| 282784220 | Nominal Shares | - May not be less than 5 EGP and not more than 1000 EGP - A way to raise capital | |
| 282784221 | Issued vs Authorized Capital | ... | |
| 282784222 | Establishment of JSC | - At least 3 partners and no maximum -Anyone who signs the preliminary contract (deed) and applies for a license to establish it is considered a founder -Anyone who takes a part in the establishment of a company on behalf of the the others should NOT be considered a founder. - Commercial JSC is governed by the rules of commercial obligations and must abide to the establishing rules of commercial company and mush have the legal capacity for that | |
| 282784223 | Procedures of establishing a JSC | - The contract which is considered the constitution governing the existence of JSC -The company must follow the rules the legislator has set for the establishment of JSC - Founders cannot amend, overlook or replace the rules said by the legislator - The only role of the subscriber is to express the desire to join the company | |
| 282784224 | Why only a contract is not sufficient for establishing JSC? | Because of the principle of contractual freedom necessitates in personal companies that make parties sign in the contract d deal with the consequentes | |
| 282927055 | Preliminary Contract | - Contract between the founders only - Used to set down the commitment between founders - Outlines the founders' relationships - Founders must sign it | |
| 282927056 | Statute of the JSC | - To guarantee the rights of public subscribers - Spells out the establishment of company - Defines its purpose - Founding rules of the company - Name - Term - HQ - Capital and shares and their types - How to transfer the shares - Rules for increasing the capital - GA rules to authorize Bonds - Appointment of BOD - How members of GA are invited - Members to call extraordinary GA - Rules related to fiscal year - Budget and reserves | |
| 282927057 | In-Kind Contributions | Non-cash contributions which includes real estate property, trading shop, building or any other assets | |
| 282927058 | Why does the legislator worried about from the in-Kind contributions? | Because founders might overvalue their contribution and have better profits than other shareholders | |
| 282927059 | How the legislator guarantees that the founders don't overvalue their in-kind contribution? | 1) In the contract and statute must include info. on every non-monetary contribution and all terms connected to it 2) Founders must ask the competent administrative body to set up a committee headed by the chief justice to verify the value of the contributions 3) The value of the contributions should be final only if the numerical majority of the subscribers holding @ least two thirds of the cash shares agreed. N.B. Shareholders who have contributions in kind are not allowed to vote | |
| 282927060 | Subscription to the Capital | - It is a wish to a join the company - Subscriber defines the number of shares he want to buy - Bound to pay their value as required - The sale of shares must be affected through a bank | |
| 282927061 | Types of Stocks | 1) Shares 2) Founders' Shares 3) Bonds 4) Preferential Shares 5) Dividends | |
| 282927062 | Shares | A share is represented in a certificate given to the shareholder- in which it proves his rights and includes the most important provisions of the statute of the company, its nominal value, the name of the company, the name of its holder and its objective | |
| 282927063 | Types of Shares | 1) Nominal - Bears the name of its holder - Transferring the ownership can be done 2) Bearer - Doesn't bear the name of its holder - Must be paid in full in cash - Presented to the company on a date to receive the annual share | |
| 282927064 | Characteristics of the Shares | - A share is indivisible: in the case of death, the successors of the shareholders can not exercise their rights on the shares unless they appoint one of them to represent them in dealing with the shares. They can divide the shares between them and change the names on each certificate or one of the successors may buy all the shares - A share must have a definite nominal value and no share may be issued for less than its nominal value. Also may not be issued for more than its nominal value except in certain special cases. | |
| 282954798 | Founders' Shares | - documents that do not have a nominal value. They are neither considered part of the capital nor do they contribute to its formation. - This type of shares only grants their holders the right to get a share of the profit of the company. | |
| 282954799 | Characteristics of Founders' Shares | - they are only issued in return for services rendered to the company and by the founders of the company. - They may not be given in return for cash or in-kind contribution. - only restricted to receiving a share of the profit - Are transferable in the stock market - Its value is calculated on the basis of the annual percentage of profit that they receive. - holders are not allowed to interfere in the management and not allowed to vote in the general assembly, but they may be allowed to attend its meetings. - annual profit for these shares may not exceed 10% of the net profit of the company after setting aside the reserves and at least 5% as profit for the capital of the company. | |
| 282954800 | Cancellation of Founders' Shares | it may be cancelled by a resolution of the general assembly after the laps of one third of the term of the company or the laps of a maximum of ten fiscal years from the date of granting such shares. This cancellation would be in return of an equitable compensation. | |
| 282954801 | Bonds | represents loans given to the company, therefore a bondholder is a creditor to the company who has the right to receive a fixed profit regardless of the profit or loss achieved by the company. -must not exceed the net value of the assets of the company as determined by the auditor in accordance of the last budget approved by the G.A. - If the company wants to put such bonds for public subscription then it must obtain the approval of the Capital Market General Authority | |
| 282954802 | Why issue bonds? | when the company needs to increase its capital without wanting to allow for more shareholders to join the company | |
| 282954803 | Presiquites of issuing bonds | only upon the approval of the general assembly and after the capital has been paid up. | |
| 282954804 | Rights of bondholder | - may claim the value of his loan at the end of the term of the company. - he/she may not interfere in the management of the company - upon liquidation of the company, a shareholder may not take any of its assets before the bondholders receive their dues in full. -He may not examine the books of the company nor give advice to the BOD. | |
| 282954805 | Preferential shares | These are shares that grant their owner either of the following: 1) Priority in receiving a certain percentage of the profit during the term of the company. 2) Priority in sharing the assets of the company upon its liquidation. 3)More votes in the deliberations of the GA. 4)Holders of such shares have the same rights of normal shares | |
| 285018461 | Dividend Shares | - Rights less than the ordinary and preferential shares - Not allowed to be issued if there is no redemption guaranteed by the statute in activities where it is limited for some time. - They get the least priority in receiving profits and liquidation of the assets - They are allowed to attend and vote in the GAs | |
| 285018462 | General Rights of a shareholder | - Profits - Part of the liquidation of the assets -Liability is limited - Don't share in the losses | |
| 285018463 | Assigning the shares | - Shares are exchanged via the stock exchange - Stocks are exchanged in accordance with the rules - Method of transferring or assigning shares differs depending on the share type - Statute of the company may provide for certain rules and organization when exchanging rules - Exchanges happens outside the stock exchange are considered null or void | |
| 285018464 | Rights of the shareholder in the GA | - Voting, which enables the shareholder to participate in the management of the company and express their ideas and POVs - The right has two points; to attend and to vote - Voting doesn't require attending, the shareholder may give a power of attorney to another shareholder to represent him and should be written to be valid - They have the right to discuss the report of the BOD - The BOD are committed to answer the all queries of the shareholders | |
| 285048610 | Properties of the BOD | - They are elected by the GA - Founders appoint the 1st BOD - The term of 1st BOD is 5 YEARS - The law requires the term of BOD to be 3 YEARS - Not less than 3 members - Must be from within the shareholders - To guarantee the performance of the board - Shares must be deposited in an accredited bank - Within 1 month from date of the member hiring date - Shared can't be transfered until the end of his term - Decisions are passed by the majority of the votes - Chairman shall cast the deciding vote in case of a tie - Statute may provide the hire of non-shareholders - Non-shareholders must have experience in the field | |
| 285048611 | Roles of the BOD | - Chairman, who preside over their meetings and represent the company in the courts and call for a meeting whenever - Managing Director, --who manage the affairs of the company, maybe someone else than the chairman who doesn't have the time or capacity to handle day-to-day operations... -- BOD decide on the mandate and remuneration | |
| 285048612 | Privileges of the BODs | 1) Administrative Privileges 2) Financial Privileges | |
| 285048613 | Administrative Privileges of BODs | - Appointing the appropriate persons to assist the managing director to manage the affairs of the company and reach its objective - This person is Chief Executive Officer or The General Director - They can also appoint the technical manager to be in charge of different depts. | |
| 285048614 | Financial Privileges of BODs | - Prepares reports of the company activities and financial position and statements at the end of the fiscal year. - Must be prepared on time to allow for the holding of the GA within three months of the end of the year | |
| 285048615 | How much power the BODs have? | - The law doesn't specify the powers the BODs should have. - However, the statute of the company usually provide the scope of powers for the management with exception with the powers given to the GA - If not stated in the statute, then it has full powers in the management with exception of donations - They can't engage in any activity beyond the purpose of the company - The statute of the company may restrict the BODs to take any loans beyond a certain figure without the approval of the GA | |
| 285048616 | The Liability of the BODs | The members of the BODs are liable for damages resulting from their faults in the management and the harms affecting 3rd parties If they commit a crime penalized according to the Penal Law, they should be criminally responsible. | |
| 285048617 | Civil Liability of the BODs | - Not liable for any contracts or commitments on the behalf of the company - Liable for any act of error or negligence in his management of the company - Liable for violating the law or statue of the company that affect the company in most cases | |
| 285048618 | Liability Legal Action | ... |
