Amendments to the Bahrain Commercial Companies Law

Amendments to the Bahrain Commercial Companies Law

Decree 28 of 2020, issued on 28 September 2020, has set out various amendments to certain provisions of the Bahrain Commercial Companies Law (Law 21 of 2001) (the “BCCL”). The amendments are part of Bahrain’s ongoing aim to develop its compliance and regulatory frameworks in line with international best practice.

The implementing regulations have not yet been issued but will clarify how the amendments will be implemented and affect the day-to-day operations of the entities affected.

Single Person Company (S.P.C.):

  • S.P.Cs will be merged with W.L.Ls meaning that S.P.Cs will be required to convert to a W.L.L. within six months of the announcement date.

With Limited Liability Company:

  • W.L.Ls will be permitted to have one or more shareholders, facilitating the conversion of S.P.Cs to W.L.Ls. There will no longer be a maximum number of shareholders.
  • The minimum share capital requirement for W.L.Ls has been removed, although certain activities undertaken by a W.L.L. may dictate a required specific minimum share capital.

Joint Stock Companies:

  • Joint stock companies will now be allowed to increase their capital in the following ways:
    • Converting debt to equity;
    • Converting its reserve or distributable profits;
    • Converting bonds into shares;
    • Issuing convertible bonds; and
    • Accepting in-kind contributions.

Limited Partnerships:

  • Limited Partnerships are now permitted to adopt a trade name. 

Not-for-profit companies:

  • A new chapter has been added to the BCCL dealing with such companies, which may be set up as W.L.Ls.

Board of directors:

  • Nominees to be appointed to a board must disclose certain shareholders prior to their appointment, such as their CVs, other board appointments held and involvement with competing entities, amongst others.
  • Members of an audit committee must also be board members.
  • The powers of a chairperson can only be delegated to a board member or to executive management of the entity.


  • A board report presented at an entity’s AGM must include details of the remuneration, shareholdings and benefits of its board members.  

Strategic shareholders:

  • An entity can, subject to certain possible regulatory consents and conditions, issue shares to strategic shareholders to increase capital. Please note that the requirements and/or conditions are not yet known.

Statutory reserve:

  • Subject to relevant rules of the Central Bank of Bahrain, the statutory reserve of an entity may be utilized to increase its capital in order to cover any losses.

Preference Shares:

  • An entity may now issue preference shares.

Employee share options & pre-emption rights:

  • The terms and conditions of employee share incentive schemes are to be fully disclosed to employees.
    Pre-emption rights in respect of shares issued under such employee share incentive schemes or issued to a strategic shareholder have been waived.

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