The Kingdom of Bahrain is an outstanding country for company formation. The nation is well-known for its rich oil and other natural resources and also provides a competitive environment which allows business investors to come forward and become a global brand.
What is a Commandite Company
A simple commandite company is one of the most popular company structures in Bahrain. It is a legal entity and is a form of limited partnership which is established between two or more partners.
The partners mentioned in the contract are jointly liable to the extent of their personal wealth for the company’s obligations, as are other partners who have invested in the company but are not involved in its management.
Different Partners in a Simple Commandite Company
When it comes to a simple commandite company formation in Bahrain, the core element that distinguishes the entity from other legal business structures is the presence of two different types of company partners.
The silent partners are the ones who don’t participate in the management activities of the entity. The limited liability is limited to the extent of their investment made during the company formation process.
As per the Bahrain Commercial Law, a silent partner is not committed to an organization and is allowed to contribute 49% of the total capital for setting up a company in Bahrain.
The silent partners are also called the non-managing partners and are not identified in the public records. The presence of their name in the business records would void the limited partnership status.
The managing partners are jointly liable to the extent of their investment made and are solely responsible for the company’s debts and obligations.
It is to be noted that the active partners should be Bahraini nationals for managing accomplices with boundless obligations.
Features of a Simple Commandite Company
The legal characteristics of a simple commandite company in the Kingdom of Bahrain include:
- The business activities can be performed in Bahrain
- The minimum capital requirement stands at BHD 20,000
- The foreign ownership is limited to 49%
- The shares of the limited partners are negotiable, while the shares of the unlimited partners are not
- No requirement of local sponsor from a Bahraini trader
- 0% corporate and personal tax
- Banking, insurance and investment activities are not allowed
Requirements of a Simple Commandite Company
Since you are focusing on establishing the business entity, let’s have a look at the core requirements to start a simple commandite company, which includes:
- The presence of a minimum of one directors (must be a Bahraini national)
- The presence of a minimum of two partners
- At least 51% of Bahraini shares
- There must be one manager
- The authorized signatories should be Bahraini national
- Presence of a local office
Documents Required to Setup a Simple Commandite Company
The list of documents that you need to present while setting up a commandite company in Bahrain includes:
General Documents
- A duly filled application form
- Identity and address proof of the investors and shareholders
- Pre-approval of the external entities
- Certificate of capital deposit
- The report from financial auditor or letter of evolution for in-kind capital
Specific Documents Concerning Company Partners
- A copy of the commercial registration certificate
- A copy of the Memorandum and articles of association and the company amendments
- General assembly resolution to be a shareholder in the company
Specific Documents Concerning Individual Partners
- CPR copy for the Bahraini partners and expatriates
- Passport and visa page copy for the non-Bahrainis
- Original signed and no-objection letter from the current employer for Bahrainis employed
- in the private sector (signed by the owner of the establishment or from the company’s authorized signatory)
- A copy of the Memorandum and articles of association and the company amendments
- General assembly resolution to be a shareholder in the company
- Original educational qualifications and experience letter depending on the business activity
Specific Documents Concerning Directors Partners
- CPR or Passport copies for the non-Bahraini directors
While submitting the required documents, it is to be kept in mind that the Ministry of Industry and Commerce (MOIC) has the right to request additional documents, and the requirement is to be met accordingly
The Process to Set Up a Simple Commandite Company in Bahrain
The steps to incorporate a simple commandite company in Bahrain are outlined below:
Clear Idea Regarding the Business
The first and foremost task is to get a clear understanding of the business activity that you are planning to start. This will help you to do market research on the same industry and fetch better insights.
Fill in the Form & Submit the Documents
In the next step, fill in the respective details of the company shareholders and investors. It is essential to attach the relevant business documents when submitting the form.
Evaluation of the Documents
After the submission, the documents get evaluated by the government authorities. It takes a minimum of 2 days for the authorities to evaluate the details.
Gather the Approvals
If the documents are perfect, the approvals are obtained. In case, if it is not, you need to cross-check and get the documents rectified or submit the necessary docs (if asked). In general, it takes 5-10 business days to get approval and register with the MOIC.
We can see that incorporating a simple commandite company is simple if performed accordingly. However, it becomes hassle-free if one is well-versed in the legal proceedings.
Since foreign expats may not have a correct idea about every legal move, they prefer to work with professional experts to carry out the task easily.
We at Business Setup Worldwide simplify the process to ease the process for business minds. Our experienced team is well-versed in legal proceedings and can assist you accordingly.
If you'd like to know more about it, feel free to speak with us today. Contact us now—we’d be glad to assist!
