MCI defines conditions for replacing company director in calling general assemblies

The Ministry of Commerce and Industry has outlined three specific circumstances under which it may step in to replace a company director in the process of calling and organizing a general assembly.

These procedures are detailed in a circular issued by the ministry to ensure that partners can move forward with essential decisions when a director is unable or unwilling to act, reports Al-Jarida daily.

The first case applies when a director refuses to convene a general assembly. In such situations, a partner or group of partners owning at least 51% of the company’s capital must submit an official letter to the Director of the Partnerships Department explaining the situation.

A legal warning must also be delivered by the Ministry of Justice’s advertising representative to the director, requesting the convening of the assembly and listing its agenda. If the director fails to act within 15 days of the warning, the Ministry may intervene.

The application must also include proof of receipt of the warning, the company’s articles of association, and any amendments.

The second case involves situations where the director is deported or is outside the country, and his residency has been revoked. The request must include a signed letter from partner(s) owning at least 51%, directed to the Director of the Department of Personal Companies.

It should also include official documentation from the Public Authority for Manpower or the Ministry of Interior, confirming the revocation of residency and stamped accordingly. A copy of the company’s articles of association and any amendments is also required.

The third scenario addresses cases where the company’s director has passed away. The requesting partner(s), holding 51% or more of the company’s capital, must submit a letter to the Director of the Partnerships Department explaining the situation.

This must include a contact number, a death certificate (if the director was not a partner), and, if the director was a partner, legal documents such as a certificate of heirs. In that case, a request to amend the company’s data must be submitted before the general assembly is held, in line with Article 101 of the law and Article 61 of the executive regulations. Three copies of the articles of association and amendments must be included.

After receiving the request, the Ministry will review the application. If documents are missing or the request is incomplete, it may be rejected or returned with a request for further documentation.

If accepted, the Ministry will schedule a meeting at its headquarters to coordinate the publication of required announcements in local newspapers and determine the date of the general assembly. If the required ads are not published and uploaded to the system under the correct application number before the meeting date, the request will be canceled.

Regarding director dismissal procedures, if the director was appointed by the company’s articles of association or an ordinary general assembly, he may be removed by a vote of 51%. If the required quorum is not met, the meeting will be postponed for 10 days and the director may then be removed by any quorum, as per Article 113 of Law No. 1 of 2016.

If the director was appointed through the company’s articles or by an extraordinary general assembly, dismissal requires a 75% quorum. Should this quorum not be reached, the meeting is postponed for 10 days, and a 51% quorum will suffice for dismissal, in accordance with Decree Law No. 106 of 2024.