QUESTION: An ex-employee of a government company in Qatar, I have invested in a firm with five others. That means the firm has six partners/shareholders. Last January, one of our partners, who holds 10% of the company’s shares, died. Now our Qatari partner is suggesting that we close the business down as one partner has died. As per law, is it mandatory to wind up the company? What is the system followed in Qatar? Shall we continue with the business?
QW, Doha

ANSWER: As per Article 239 of the Companies Law – No 11 of 2015, the shareholding of every shareholder shall revert to his heirs or those persons mentioned in his will. Accordingly, shares of the deceased shall be transferred by inheritance to the heirs or legatees of the shareholder.
The company may request the heirs or legatees to select, from among themselves, one to represent them. They shall be granted a reasonable period for this selection.
In case the selection is not made within this period, the company may sell the shares in accordance with Articles of InCorp and the Law but for the account of the heirs or legatees at a price based on what is shown in an auditor’s report as at the time immediately before the death.
Regarding dissolution, Article 297 stipulates that unless the company Articles of InCorp otherwise provides, a limited liability company shall not be dissolved upon a shareholders’ death.

Claim for insurance
Q: Who has the right over the insurance claim, banker or investor? We purchased an equipment under a hire-purchase agreement and mortgaged it to the banker. But the newly-purchased equipment got damaged and we are now claiming for insurance coverage. To what extent can the bank interfere in such a claim?
PO, Doha

A: As per laws, if the insured property is encumbered by a mortgage, hypothecation or any other pledge, generally such rights shall be transferred to the compensation payable to the debtor pursuant to the insurance contract.
If such rights are registered or declared to the insurer even by virtue of a registered letter, it may not pay the amount owed to the insured except with the creditors’ consent.
 If an attachment is placed upon the insured property or if it is seized, the insured shall not where a declaration is made thereto pay anything owed to the insured.

Hearing of witnesses
Q: There is a fabricated case against me and I have an eye-witness. What is the procedure as per law where the witness is not in a position to appear the hearing because of medical issues?
JU. Doha
A: As per Article 282 of Civil and Commercial Procedure Law, hearing of witnesses shall take place before the court in the presence of the litigants. If the witness has an excuse which prevents him from appearing and the court accepts this excuse, the court may travel to hear his evidence.
However, if the court is constituted of more than one judge, it may depute one of its judges for this purpose.
The litigants shall be invited to be present when this testimony is given. The court Registry shall make a minute of this testimony which shall be signed by the judge and the Registry of the court.

Gratuity entitlement
Q: The management of our company has introduced a new retirement plans for employees. Under the new scheme, labourers won’t get the end-of-service gratuity and only supervisory-level employees will be eligible. Is this legal?
BN, Doha

A: Employer and employee can adopt any better scheme favourable for the employee upon a mutual agreement. The employer who maintains a retirement system or a similar system which secures for the worker a greater benefit than the end-of-service gratuity to which the worker is entitled under the provisions of Article 54 of the Labour law shall not be obligated to pay to the worker the end-of-service gratuity in addition to the benefit available to the worker under the system. Article 56 of the Labour Law is relevant.
If the net benefit accruing to the worker under the system is less than the end-of-service gratuity, the employer shall pay to the worker the gratuity and return to him any sum whereby the worker may have contributed to the system.
The worker may choose to receive either the end-of-service gratuity or the pension accruing to him under the system.
    
- Please send your questions by e-mai to: leges@qatar.net.qa  (Mobile:55813105)


LEGAL SYSTEM IN QATAR
As per Article 777, the receiver of union, after completion of liquidation, shall submit a ?nal accounts to the adjudicator, who shall immediately dispatch these accounts to the creditors and convene them to a meeting to discuss it. The bankrupt shall be summoned to attend such meeting by registered letter with acknowledgment receipt.
Once the account is ratified, the Union of Creditors shall be dissolved and the bankruptcy shall be deemed to have terminated by rule of the law, unless the bankrupt or one of the creditors protest such account, in such case the matter shall be referred to the court within ?fteen days and the union shall not be dissolved until by a ?nal judgment.
In this case the receiver of union shall be responsible for a period of one year from the date of termination of the bankruptcy for the ledgers, documents and papers delivered to him.
After the termination of the bankruptcy, every creditor shall have the right to take individual measures to obtain the remainder of his debt. Verification of a debt in the bankruptcy shall deemed as a conclusive judgment to effect the execution on the property of debtor.
According to Article 780, except for the fraudulent or negligent bankruptcy, all the rights that the bankrupt has been deprived of shall be restored after the lapse of two years from the date of termination of the bankruptcy.
All the bankrupt’s rights shall be restored and shall be rehabilitated if bankrupt has paid all debts prior to the declaration of bankruptcy including principal amount and expenses.
If the bankrupt is a partner in a company which is declared bankrupt, he shall be rehabilitated only after all debts of the company in terms of principal and expenses have been settled.
With the exception of the two cases of bankruptcy involving deception and negligence, the bankrupt may be rehabilitated, even if the period recorded in the previous article has not ended, in the following two cases: (1) If the bankrupt has obtained conciliation with his creditors and its terms have been executed. This rule will apply to a partner in a company which is declared bankrupt if he obtained conciliation personal and implements the conditions thereof and (2) If the bankrupt proves that the creditors have fully released him from all debts.
As per Article 782, a bankrupt who has been convicted for offence of fraudulent bankruptcy shall not be rehabilitated except after the lapse of three years from the date of execution of the punishment, pardon or prescription of the punishment.
A bankrupt who has been convicted of an offence of negligent bankruptcy may only be rehabilitated after execution of the punishment or pardon or the period of the punishment has ended, if the execution is stayed by the judgment or the lapse of its term. In all cases, the bankrupt shall pay all the debts due from him prior to the adjudication of bankruptcy or the creditors have released him from all debts.
If any of the creditors refrains from accepting his debt or unavailable or the place of residence is unknown, the debt may be deposited in the court treasury and the receipt of deposit shall be treated as discharge of liability.