Two or more partners, who must be Kuwaiti nationals, have liability for the company to the limit of their personal assets. A Form of Memorandum and Articles of Association for a Joint Liability Partnership must be drawn up and lodged at the Commercial Register.
The full names of partners with confirmation that they are Kuwaitis, as well as details of the original capital structure of the partnership, must be stated.
The general partners must be Kuwaiti nationals who are responsible for the company liabilities to the full extent of their personal assets. The liability of other parties is limited to their personal capital contribution to the company.
A Memorandum and Articles of Association detailing the identity of the partners, the nature and scope of the company and all information relating to its trading activities must be submitted to the Commercial Register.
All partners are limited in their personal liability and are issued with non-negotiable shares of equal value. The number of shares held by any partner is determined by the amount contributed. Shares are transferable between members. Members have first right to purchase outgoing shares at the minimum level of third party bids. Kuwaiti nationals must control 51% of the paid-up share capital.
A Memorandum of Association is issued in the form of a notarized deed. This states the name of the company, personal details of the members, its objectives, capital and duration.
These are known as Kuwaiti Private Shareholding Companies (KSC). It is necessary to obtain a decree from the Ministry of Commerce authorizing the incorporation of a KSC.
The shareholders are issued with negotiable shares of equal value and their liability is limited to the nominal value of their shareholding. Public subscription may be invited.
Again 51% of the share capital must be Kuwaiti-owned. The accounts of a Joint Stock Company must be audited by independent auditors licensed to practice in Kuwait. Copies of the company's accounts etc. must be filed with the Commercial Register.
This does not have a legal character and it is not necessary to submit entries to the Commercial Register.
Where the joint venture is of Kuwaiti-foreign form, the Kuwaiti partner must stand as surety on behalf of the foreign partner. The foreign partner's name does not appear in business arrangements. The article of association will specify the manner in which the profits are to be divided between partners as well as defining the partner's rights and obligations.
No foreign shareholding is allowed in the case of banking and insurance companies.