The Limited Liability Company in Syria

The Limited Liability Company (LLC) is the optimal choice for small and medium-sized enterprises and family investments in Syria, as it combines ease of incorporation with the protection of partners’ personal assets from the risks of commercial activity. Its latest legal regulation was issued under Legislative Decree No. 8 of 2021, which replaced the old Companies Law No. 29 of 2011.

First: Incorporation Requirements

• Partners: Their number shall not be less than two and not more than fifty.
• Capital: The law sets a minimum capital of 5 million Syrian Pounds, which must be paid in full, either in cash or in kind, upon incorporation. It is not divided into tradable shares.
• Liability: A partner’s liability is limited to the extent of their share in the capital and does not extend to their personal assets.
• Contract: The memorandum of association must be notarized by a notary public, then registered in the Commercial Register, and finally published in the Electronic Companies Gazette.

Second: Management and the Board of Directors

This type of company enjoys great flexibility in management:

• Manager or Board of Managers: The company is managed by a single manager or several managers (Board of Managers), chosen from among the partners or from third parties. The Board of Managers elects a chairperson from among its members, and their powers are defined by the memorandum of association.
• Oversight: If the number of partners exceeds twenty, the appointment of a certified legal auditor becomes mandatory.

Third: Suitable Commercial Activities

The LLC is suitable for activities such as:

• Small and medium-sized commercial and industrial projects (restaurants, workshops, retail stores).
• Service, contracting, engineering consultancy, and programming companies.
• Family investments and real estate portfolio management.
• It is not suitable for banking, insurance, or financial brokerage activities, which require the form of a joint-stock company, nor can it offer its shares for public subscription.

Fourth: Acquisition of Legal Personality – Registration is the Origin, Publication is a Subsequent Declaration

Here lies the essence of legal protection, addressed clearly by the law in two articles:

• Article 5: “The company acquires legal personality from the date of its registration in the Commercial Register, and it may not, prior to this date, conduct business in its name.”
• Article 6: Stipulates the publication of a summary of the company’s contract in the Electronic Companies Gazette, and provides that if publication is not completed within three months, the company may not rely on the absence of publication against third parties, while third parties may rely on the contract against the company.

Summary

The Limited Liability Company under Syrian law is a safe and investment-stimulating legal tool, provided full compliance with the provisions of the law is observed, most importantly refraining from conducting any contractual activity in its name before the moment of its registration in the Commercial Register. This is the first line of defense for the partners’ financial liability, and it prevents any nullity that could undermine the project at its inception.