- Legislative Decree No. (51) of 2018
LEGISLATIVE DECREE NO. (27) OF 2015
WITH RESPECT TO THE COMMERCIAL REGISTER
We, Hamad Bin Isa Al Khalifa, King of the Kingdom of Bahrain,
- Having reviewed the Constitution, and particularly Article (38) thereof,
- And Decree No. (1) Finance, 1961 concerning the Establishment of the Commercial Register, as amended,
- And the Civil and Commercial Procedures Act, promulgated by Legislative No. (12) of 1971, as amended,
- And the Penal Code, promulgated by Legislative No. (15) of 1976, as amended,
- And the Trusteeship of Funds Law, promulgated by Legislative Decree no. (7) of 1986,
- And the Law of Commerce, promulgated by Legislative No. (7) of 1987, as amended,
- And the Bankruptcy and Composition Law, promulgated by Legislative Decree No. (11) of 1987,
- And Legislative Decree No. (10) of 1992 with respect to the Commercial Agency, as amended,
- And the Commercial Companies Law, promulgated by Legislative No. (21) of 2001, as amended by Law No. (50) of 2014,
- And Legislative Decree No. (28) of 2003 with respect to electronic transactions, as amended,
- And the Law of Criminal Procedures, promulgated by Legislative Decree No. (46) of 2002, as amended,
- And the Central Bank of Bahrain and Financial Institutions Law, promulgated by Law No. (64) of 2006,
- And Law No. (18) of 2012 with respect to Trade Names,
- And upon the submission of the Chairman of the Council of Ministers,
- And after the approval of the Council of Ministers,
HEREBY DECREE THE FOLLOWING LAW
In the course of implementing the provisions of this Law, and unless the context requires otherwise, the following words and expressions shall have the meaning assigned opposite each:
Ministry: The Ministry concerned with trade affairs.
Minister: The Minister concerned with trade affairs.
Concerned Directorate: The Directorate competent to register the traders subject of this Law.
Trader: Every natural person or corporate body licensed to undertake commercial activity in accordance with the provisions of this Law.
Commercial Register: A registry in which the traders subject of the provisions of this Law are registered, using any legally approved method.
Commercial Activity: The activity specified in Chapter One of Part I of the Law of Commerce.
Competent Authorities: The authorities concerned with the issuance of commercial licenses to business activities.
Those Subject to the Provisions of the Law
Everyone who undertakes commercial activity shall be subject to the provisions of this Law, particularly the following:
- Companies to which the provisions of Commercial Companies Law apply, except for association in participation (joint venture).
- Civil companies which take one of the forms of commercial companies.
- Companies in which the governments of states participate, and in which the government of the Kingdom participates and which themselves undertake commercial activities in the Kingdom of Bahrain.
- Natural persons who conduct professional activities in the form of a commercial company.
- Companies which are established by virtue of a law, or upon a decree to engage in a commercial activity.
- Branches, offices and agencies of foreign companies.
- Sole commercial proprietorships.
Establishment of the Commercial Register
A commercial registry shall be maintained at the concerned Directorate, in which the names of the traders subject of the provisions of this law shall be registered, and in which the details provided for in this Law or which are prescribed in the Implementing Regulations shall be recorded.
Registration in the Commercial Register
Every trader conducting commercial activity shall be registered in the Commercial Register, in which all the particulars prescribed in the Implementing Regulations and other laws shall be recorded, as well as every change occurring to such particulars.
Application to Register in the Commercial Register
- The registration applicant shall submit his application to the concerned Directorate to register in the Commercial Register, containing the following particulars:
- The name of the registration applicant and a proof of his identity and address;
- The commercial name under which he intends engage in commercial activity, if any, or the abbreviated name, if any;
- The legal form he wishes to use in conducting business activities;
- The type of activity he wishes to undertake;
- The capital, if any;
- The premise’s address, if any;
- The names of authorized signatories;
- Any other documents or details provided for in the Implementing Regulations or prescribed in other laws.
- Notwithstanding the provisions of Article (7) of this Law, the Implementing Regulations shall regulate the requirements and situations in which registration may be made in the Commercial Registry before completing all documents and details provided for under Paragraph (a) of this Article.
Obtaining the Competent Authorities’ Approval
The concerned Directorate shall obtain the competent authorities’ approval of the engagement in the activity which the registration applicant wishes to undertake, if necessary, and the trader shall be granted a certificate of his registration in the Commercial Register after payment of the prescribed fees.
Granting the Certificate of Registration in the Commercial Register
The concerned Directorate shall grant the registration applicant a certificate of his registration in the Commercial Register before obtaining the necessary licenses from the competent authorities to undertake the activity, provided that in the registration certificate there should be an indication that he has not obtained such licenses. The registration applicant, in this case, may not undertake commercial activity before obtaining the necessary licenses from the competent authorities and submitting them to the concerned Directorate and obtaining a certificate of registration in the Commercial Register stating the type of the licensed commercial activity.
Whoever has been registered in the Commercial Register shall obtain the necessary licenses to undertake his commercial activity from the competent authorities within the period prescribed in the Implementing Regulations, unless the delay is due to reasons beyond his control.
Striking Off the Registration for the Reason of Not Obtaining Licenses
If the period referred to in Article (8) of this Law expires without obtaining the licenses necessary to undertake commercial activity, the registration in the Commercial Register shall be struck off and the registration applicant shall be notified accordingly, and this shall be posted on the Ministry’s website.
Registration of Sole Commercial Proprietorships
Sole commercial proprietorships are not registered in the Commercial Register except for a Bahraini national, provided that he is 18 years of age, without prejudice to the provisions of the laws and agreements in force in the Kingdom.
Notation on the Details of the Registration in the Commercial Register
Whoever has been registered in the Commercial Register shall, after obtaining the concerned Directorate’s approval, request a notation of any change or alteration made to the registration details within 30 days from the date of the event requiring this. The same procedures for registration in the Commercial Register shall apply thereto.
The concerned Directorate may, at its own instance, make a notation of any change or alteration occurring to the registration details, in accordance with the situations and procedures prescribed in the Implementing Regulations. In this case, the trader shall be notified, within 30 days from the date of notation on the changes or alterations made to his registration in the Commercial Register.
Renewal of Registration in the Commercial Register
With due regard to the provisions of Paragraph (c) of Article (28) of this Law, renewal of registration in the Commercial Register shall be in accordance with the procedures and requirements provided for in the Implementing Regulations.
Striking Off the Registration Due to Non-Renewal or Cessation of the Activity
If the trader does not renew his registration within the prescribed period, or if he ceases to conduct the activity licensed for him for a continuous period of more than one Gregorian year, without any acceptable cause, the concerned Directorate shall, at its own instance, strike off the registration administratively, and shall notify the trader accordingly. The striking off shall be posted on the Ministry’s website.
The concerned Directorate may, upon the trader’s request, restore the registration after payment of the prescribed fee in addition to a fine for every month of delay with effect from the date of striking off the registration.
Application for Electronic Registration in the Commercial Register
The application for registration in the Commercial Register may be electronic, as well as the application for changing or altering any of its details, or its renewal, in the manner prescribed in the Implementing Regulations.
Stating the Registration Number and Posting the Registration Certificate
The Implementing Regulations shall specify the cases in which traders subject to the provisions of this Law must state the number of their registration in the Commercial Register in their dealings and transactions with third parties, as well as the cases and situations in which the certificate of their registration in the Commercial Register must be displayed at the premises.
Cases of Deletion of the Registration in the Commercial Register
The trader or his heirs or liquidators, as the case be, shall apply, in accordance with the situations prescribed for registration, for deletion of the registration from the Commercial Register in the following cases:
- If the trader ceases to engage in his trade or leaves the country permanently, unless he appoints a responsible manager as a substitute for him undertaking management of his commercial activity, or in case of his death, unless his heirs apply for continuation of the commercial activity, provided that the provisions of any other law should not be contravened, and that they must fulfill the conditions of undertaking such activity.
- Termination of the company’s liquidation.
The application must be submitted during three months from the date of the event warranting deletion of the registration. If the concerned party does not submit the deletion application within the prescribed time limit, the concerned Directorate may, after ascertaining the event warranting deletion, strike off this registration of its own and notify the competent authorities accordingly.
Obtaining An Extract of the Registration Details
Every interested person may apply to the concerned Directorate to obtain a copy of the details of the registration in the Commercial Register in accordance with what is prescribed in the Implementing Regulations after payment of the prescribed fees in this respect.
Court Orders and Notation in the Commercial Register
The clerks of the Court issuing judgments hereinafter mentioned against any trader shall forward a copy of the judgment, within 15 days from the date of its issue, to the concerned Directorate, to make a notation whereby in the Commercial Register:
- Judgments of adjudication of bankruptcy or its rescission and the judgments issued specifying the date of moratorium or amending it.
- Reinstatement judgments.
- Judgments and injunctions placing distraint on the trader or appointing custodians or guardians for those who are absent, dismissing them or removing the attachment.
- Judgments separating partners or dismissing managers.
- Judgments dissolving and liquidating companies or their annulment and appointing liquidators or dismissing them.
- Judgments issued for divorce, separation of marriage or financial separation in case of merged financial liability for the spouses.
- Judgments putting the business under receivership or attachment.
An order shall be issued by the Minister, in conjunction with the Minister concerned with justice affairs, other orders against traders, related to trade affairs, which the concerned Directorate is notified of, as well as laying down the rules, requirements and procedures related to the notification of the clerks referred to in the previous Article.
Article (18 bis)
"As added by Legislative Decree No. (52) of 2018"
- The Minister shall, after coordination with the Ministry of Finance, specify the criteria, rules and guidelines for determining the ultimate beneficiary in accordance with best practices and standards for improving international tax compliance and for combating money laundering and financing of terrorism. For those that are licensed by the Central Bank of Bahrain, the criteria, rules and guidelines for determining the ultimate beneficiary shall be in accordance with the provisions of the Central Bank of Bahrain and Financial Institutions Law promulgated by Law No. (64) of 2006 together with regulations and directives issued in the implementation thereof.
- The merchant shall submit a statement to the Ministry identifying the ultimate beneficiary when applying for a registration in the Commercial Register or renewal of the registration.
- A person who has been registered in the Commercial Register shall provide to the Ministry, within the period specified by the Minister, any changes that has taken place to the particulars of the ultimate beneficiary.
- The concerned department shall enter in the commercial register the particulars of the ultimate beneficiary and any changes to such particulars.
- Without prejudice to the provisions of Article (19) of this Law, in the event that a person who is registered in the Commercial Register refrains from identifying the ultimate beneficiary or provides incorrect particulars, the Ministry may take any of the measures specified under Article (20) of this Law.
Article (18 ter)
"As added by Legislative Decree No. (52) of 2018"
- The Minister shall issue such regulations as may be necessary to ensure that the merchant's is satisfying the obligations undertaken by the Kingdom pursuant to international conventions and treaties, which enhances tax compliance and combats tax avoidance and evasion, money-laundering and financing of terrorism and such that the verification of the real economic substance of the merchant's activities in the Kingdom is ensured, including but not limited to ascertaining that the profits and returns are generated from the merchant's conduct of its real economic activities in the Kingdom. For this purpose, the Minister may order the merchant to submit any reports or documents and keep them for the same period legally prescribed for keeping commercial books.
- Without prejudice to the provisions of Article (19) of this Law, in the event that a merchant violates the regulation issued in accordance with the provisions of Paragraph (a) of this Article, the Ministry may take any of the measures specified under Article (20) of this Law.
- The Ministry may conduct an administrative investigation, at its own instance or in response to well grounded reports or complaints, to ascertain any violation of the provisions of this Law. It may conduct investigation, if it has well-grounded evidence to make it believe that a certain violation is imminent.
- The Ministry may require traders to provide all details, clarifications and documents, and in the course of carrying out its work, it may delegate any of the judicial police officers referred to under Article (26) of the Law to carry out any of the tasks they are delegated to perform.
- The Implementing Regulations shall organize the investigation procedures and the time limits to be complied with, the rules of notifying traders subject of the provisions of this Law of the violations attributed to them and the rules of affording fair opportunities to all parties to concerned with the investigation to defend their interests, including attendance of the sessions to hear and to cross examine the concerned parties and their witnesses and enable them to give their views and submit their pleas and evidence, both written and oral.
The concerned parties shall have the right to seek assistance of their counsels in all investigation hearings and procedures.
Measures Which May Be Taken When a Violation is Committed
"As amended by Legislative Decree No. (52) of 2018"
- Without prejudice to the provisions of Article (19) of this Law, when the violation is established, the concerned Directorate shall order the violator, by virtue of a justifiable reason notified to the violator in a registered letter with a delivery note, to stop the violation and remove its reasons and effects immediately, or during a certain period prescribed by the Ministry. In case the violator does not comply with this order during this period, the concerned Directorate may issue an adequately justifiable decision adopting any of the following measures:
- Suspend the commercial registration of the company for a period not exceeding six months.
- Impose an administrative fine calculated on a daily basis, to compel the violator to cease the violation and eliminate its causes or effects, not exceeding BD 1,000 per day where the violation is being committed for the first time and BD 2,000 per day where it had committed any other violation within three years following the date on which a decision in respect of the previous violation against it had been issued. In all cases, the sum of the fine shall not exceed fifty thousand Bahraini Dinars.
- Impose an administrative fine not exceeding one hundred thousand Bahraini Dinars.
- In the two cases provided for under Clauses (2) and (3) of Paragraph (a) of this Article, when assessing the fine, the gravity of the violation and the obstinacy shown by the violator, the benefits he has obtained and the damages which have been suffered by third parties as a result thereof, shall be taken into consideration. Collection of the fine shall be made by using the methods prescribed for collecting amounts due to the State.
- The Ministry may publish a statement of the violation which is proved to have been committed by the violator, using the method and manner specified in the order and in a way commensurate with the gravity of the violation, provided that publication shall not be made except after the expiry of 30 days from the Ministry’s decision establishing the violation without it being appealed, or after a final court judgment is passed establishing the violation, as the case be.
- If investigation conducted by the Ministry has resulted in proving the existence of a criminal offense, it shall refer the papers to the Public Prosecution.
Enforcement Using Administrative Methods and Forcible Means
The Ministry may use administrative methods for enforcement, and seek forcible means to stop the violation of the provisions of this law. The violator in this case shall bear all the costs incurred by the Ministry.
Before seeking enforcement by forcible means, the violator shall be given respite to remove the violation of his own volition.
Cases of striking off the Registration and Closing the Premises
The concerned Directorate may strike off the registration or close the premises, as the case is, in the two following cases:
- If a final judgment or order is issued by a judicial authority.
- Violation of the provisions of this Law or the Regulations issued in implementation thereof, non-compliance with the order for removal of the violation during the period specified by the Ministry.
- If one of the Registration conditions is forfeited.
The concerned Directorate shall notify whoever his Registration is to be struck off in pursuance of (1) and (2) of this Article, at least 7 days before it is struck off, in accordance with the procedures prescribed in the Implementing Regulations.
Introducing a List of violators’ Names
The concerned Directorate may introduce a list, in which the names of violators of this law and its regulations and the related laws and regulations of the competent authorities are included, as well as the addresses exploited in contravention of this Law and its related regulations, in order to require them to complete the requirements which ensure non-recurrence of the violation, as prescribed in the Implementing Regulations.
Organizing the Procedures of Striking Off and Deleting the Registration and Restoring it
The Implementing Regulations shall organize the procedures and requirements of striking off and deleting the Registration in the Commercial Register and the procedures and requirements of the restoration thereof.
Compiling, Analyzing and Publishing the Details and Information of the Commercial Register
- The Ministry shall post, on its website, the details prescribed in the implementing Regulations.
- The Ministry shall compile and analyze the details and information recorded in the Commercial Register, so that the Ministry shall be the main source of accurate details, information and statistics in respect of all the commercial sectors in the Kingdom. The Ministry shall update such details, information and statistics, on a continuous basis and in a regular way, in a manner reflecting the actual situation of the commercial sectors in the Kingdom.
Judicial Police Powers
Employees who are designated in an order issued by the Minister concerned with Justice affairs, in conjunction with the Minister, shall have the capacity of judiciary police concerning the implementation of the provisions of this Law, in respect of the crimes which fall under their jurisdictions and are related to their duties. They shall have the right to enter upon the related premises and close them down as a precautionary measure, record the violations and issue the necessary minutes. If the premises where the commercial activity is a property used as residence, a warrant should be obtained from the Public Prosecution.
"As amended by Legislative Decree No. (52) of 2018"
Without prejudice to any stiffer penalty provided for in another law, a prison term of not more than one year and a fine of not less than BD 1,000 and not more than BD 100,000, or either of such penalties, shall be imposed on every one who:
- Has deliberately given false details to be registered in the Commercial Register, whether concerning registration, renewal, notation or striking off. The Court shall order that such particulars be corrected in accordance with the situations and time limits specified by it.
- Has used in his correspondences or publications related to his activities a registration number “commercial registration” contrary to the truth.
- Has undertaken a commercial activity without obtaining a license from the competent authorities.
The Minister or whoever is delegated by him may, before referring the violator to a criminal trial, decide to reach a settlement in respect of such violations, as well as the violations set forth under (2) of Article (22) of this Law after the violator pays the settlement amounts for which an order is issued by the Minister.
Fees and Categories of Fines for Delay
- Annual fees shall be levied on registration in the Commercial Register, to be specified in an order by the Minister after the Council of Ministers’ approval.
- Without prejudice to the provisions of the laws organizing the fees for conducting certain activities, annual fees shall be levied on undertaking any commercial activity, and the categories of such fees shall be fixed in an order by the Minister after the Council of Ministers’ approval.
- An order shall be issued by the Minister, after the Council of Ministers’ approval, specifying the categories of fines levied for delay in renewing registration in the Commercial Register.
Registration and the license to undertake commercial activity may be renewed for more than one year after payment of the prescribed fees, without prejudice to the provisions of the laws in force.
Promulgation of the Implementing Regulations and Orders
The Minister shall issue the Implementing Regulations and the orders necessary to implement the provisions of this Law.
Pending the promulgation of the Implementing Regulations and orders, the Implementing Regulations and the orders in force when this Law was issued shall remain in force in as much as they do not conflict with its provisions.
Decree No. (1) Finance 1961 with respect to the establishment of the Commercial Register shall be repealed, as well as every provision which is in conflict with the provisions of this Law.
Entry into Force
The Chairman of the Council of Ministers and Ministers, each in his respective capacity, shall implement this law, which shall come into force on the day following the date of its publication in the Official Gazette.
Hamad Bin Isa Al Khalifa
King of the Kingdom of Bahrain
Khalifa Bin Salman Al Khalifa
Chairman of the Council of Ministers
Issued at Riffa’ Palace on:
23 Dhi Al Hijjah 1436 H
Corresponding to 7 October 2015