Forced Sale of shares of the underwriting Beneficiary in the Joint Stock Company: A Comparative Study of Syrian and Emirati Laws
When establishing a Joint-stock company, the founders may decide to divide the value of the shares into a number of installments, but there will be a chance that an investor (shareholder) or number of investors might default in payments of their shares, leading the corporation into financial difficulties, and if the company decides to take the regular legal method to oblige each investor to pay his debt via a law suit, it will end up wasting too much time, effort, and money on that, which contradicts with the commercial requirements that are based on speed and credential. as to this fact, commercial custom has invented a special method in dealing with such cases that is much quicker and less expensive than the normal legal method, this method entitles the company to sell the default investors shares via a public auction without having an adjudication, and to acquire all its debt from its price. Later, almost every legal system in the world adopted this method.
This legal research will shed the light on the regulation of the forced selling of shares of the default shareholder in Joint-stock Company, a comparative study focusing on the Syrian and Emiratis legal systems, through answering a number of legal questions that are:
What are the legal conditions that the company should meet in order to exercise its right in selling the shares via public auction? To what extent the law imposes judicial supervision on the company's procedures? And does the law provide a special legal power to the company's logs regarding the selling of shares?
In conclusion, the research found that there is a wide similarity between the two legal systems being compared, with some differences, and the most notable legal strength point could be the frank impose of judicial supervision on the company's procedures in the Syrian Companies Law, and the clear provision of the UAE Companies Law that stipulates the necessity of selling the stocks in the securities exchange market in the case of shares listed in one.
On the other hand has found some weakness points that need to be modified through number of recommendations which can be highlighted in the need to include a provision in the UAE Companies Law that provides a special legal probative power to the company's logs regarding the selling of the shares, in order to avoid any potential conflicts that would impede the forced selling system through the company. As well as the need to define – in the Syrian Companies Law- a period of time during which the former owner of the stock is committed with his successor in paying the balance of his shares, as It is unacceptable that the legal positions of a group of successive shareholders remain under threat without a precise appointment that terminate their responsibility.
Al-Eneid, Moataz Bellah
"Forced Sale of shares of the underwriting Beneficiary in the Joint Stock Company: A Comparative Study of Syrian and Emirati Laws,"
UAEU Law Journal: Vol. 2019:
79, Article 4.
Available at: https://scholarworks.uaeu.ac.ae/sharia_and_law/vol2019/iss79/4