Commercial Law No. 27 of 2006

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Law No. (27) of 2006 Issuing the Commercial Law

We, Tamim bin Hamad Al Thani, Vice Amir of the State of Qatar, Having reviewed the Constitution, And the Law of Civil and Commercial Materials issued by Law No. (16) of 1971, and its amended laws, And the Civil Law issued by Law No. (22) of 2004, And upon the proposal of the Minister of Economy and Commerce, And upon the draft law submitted by the Council of Ministers, And after obtaining the opinion of the Shura Council, Have decided the following Law:

Article ( ) The provisions of the attached Commercial Law shall apply, subject to the provisions of Article (3), and Books Two, Three, Four, and Five of the aforementioned Civil and Commercial Materials Law are repealed.

Article ( ) The relevant Ministers shall issue the necessary decisions to implement the attached Law, each within their respective jurisdiction.

Article ( ) All relevant authorities shall implement this Law, each within their respective jurisdiction. It shall come into force six months from the date of its publication in the Official Gazette, except for the provisions contained in Article (58) regarding considering the cheque as a means of payment, which shall come into force three years from the date this Law takes effect. During this period, the provisions of Article (457) of the aforementioned Civil and Commercial Materials Law shall apply to cheques.

Tamim bin Hamad Al Thani Issued at the Amir's Diwan on: 2/7/1427 H. Vice Amir of the State of Qatar Corresponding to: 27/7/2006 M. The Law was published on November 13, 2006 (Issue No. 10 in the Official Gazette).

• 2 - Commercial Law Preliminary Chapter: General Provisions

Article ( ) The provisions of this Law shall apply to merchants, and to all commercial acts performed by any person, even if not a merchant.

Article ( ) The provisions contained in this Law or other laws related to commercial matters shall apply to commercial disputes. If no applicable provision exists, commercial custom applies, with special or local customs taking precedence over general custom. If no commercial custom exists, the provisions of the Civil Law shall apply.

Chapter One: Commercial Acts and the Merchant Section One: Commercial Acts

Article ( ) Commercial acts in general are those performed by a person with the aim of trade, even if not a merchant. Trade is defined as seeking profit through transactional dealings.

Article ( ) The following acts are, in particular, considered commercial: 1 – Purchasing goods and other movable property, regardless of type, with the aim of selling them, whether sold as is or after being prepared in another form. 2 – Purchasing goods and other movable property, regardless of type, with the aim of leasing them, or hiring them with the aim of re-leasing. 3 – Selling, leasing, or re-leasing purchased or hired goods as specified above. 4 – Purchasing real estate with the aim of selling it in its original state or after subdivision, and selling real estate purchased for this purpose. 5 – Establishing commercial companies. 6 – Contracting works.

Article ( ) The following acts are considered commercial if performed professionally: 1 – Bank transactions. 2 – Exchange, financial investment, and financing activities. 3 – Commercial agency and brokerage activities. 4 – Supply contracts. 5 – Public warehouse operations, and liens on assets deposited therein. 6 – Extractive operations for natural wealth resources (mines, quarries, oil, gas, etc.). 7 – Insurance of various types. 8 – Public entertainment activities, such as public gardens, cinemas, hotels, restaurants, and auction sales. 9 – Educational institutions and private hospitals activities. 10 – Public utility concessions, such as water, electricity, gas distribution, and postal, telegraphic, telephone, and other communications. 11 – Land, sea, and air transport. 12 – Maintenance, cleaning, and other commercial services. 13 – Commercial agencies, travel and export/import offices, customs clearance, and recruitment. 14 – Activities related to printing, publishing, journalism, broadcasting, television, news/photo transmission, advertising, and book sales. 15 – Industry, even if coupled with agricultural investment, and construction/manufacturing contracting. 16 – Activities related to building/construction contracting, renovation, and demolition.

Article ( ) All acts related to maritime and aviation navigation are considered commercial, specifically: 1 – Building or selling, purchasing, leasing, hiring, and repairing ships or aircraft. 2 – Lending and borrowing. 3 – Contracts related to the use of ship captains/crew and aircraft pilots/crew, and other workers therein. 4 – Maritime and air transport, and any operation related to purchasing or selling their equipment (stores, tools, ammunition, fuel, ropes, sails, provisions, and aircraft supplies). 5 – Maritime and air insurance of various types.

Article ( ) All acts related to commercial instruments/papers are considered commercial.

Article ( ) Any act that can be analogized to the aforementioned acts due to similarity in characteristics and purposes is considered commercial. Furthermore, acts related to or facilitating the aforementioned commercial transactions are considered commercial, as well as all acts performed by a merchant for the needs of their trade.

Article ( ) The default rule regarding a merchant's contracts and obligations is that they are commercial, unless evidence proves otherwise.

Article (10) If a contract is commercial with respect to one party but not the other, the provisions of this Law shall apply to the obligations arising from this contract for both parties, unless a provision or agreement stipulates otherwise.

Article (11) The following acts are, in particular, not considered commercial: 1 – An artist producing an artistic work themselves or using employees, and selling it. 2 – An author publishing their own work and selling it. 3 – Practicing free professions, such as doctors, engineers, lawyers, and those in similar categories. 4 – Selling crops produced from land owned or cultivated by the farmer, even after conversion using available agricultural means. However, if the farmer establishes a permanent store or factory to sell their crops as is or converted, such sales are considered commercial.

Section Two: The Merchant Subsection One: The Merchant in General

Article (12) A person is considered a merchant if they practice a commercial act in their own name, possess the required legal capacity, and make this act their profession. A commercial company or a company adopting a commercial form is considered a merchant, even if it practices non-commercial acts.

Article (13) Anyone who publicly announces, by any method of publication, the establishment of their commercial premises is considered a merchant, even if trade is not their profession. The status of a merchant applies to anyone who practices trade under a pseudonym or borrowed name, or behind another person, in addition to the apparent person. If one of the persons prohibited from trading under specific laws or regulations practices trade, they are considered a merchant and subject to the provisions of this Law.

Article (14) A person who conducts an occasional commercial transaction without making trade their profession is not considered a merchant, although such transactions are subject to the provisions of this Law.

Article (15) Ministries, other government agencies, public bodies and institutions, associations, and clubs are not considered merchants. However, commercial transactions conducted by these entities are subject to the provisions of this Law, unless specifically exempted. This status also applies to companies established or participated in by the State, and other public bodies/institutions that primarily conduct commercial activities. This status also applies to branches of foreign companies and public institutions that practice commercial activity in Qatar.

Article (16) Individuals who practice a simple trade or small business, relying primarily on their own labor, are exempt from the merchant's obligations regarding commercial books, registration in the Commercial Register, and bankruptcy/protective composition provisions. A decision by the relevant Minister determines simple trades and small businesses.

Article (17) Any Qatari who has reached the legally prescribed age of majority, and is not subject to legal impediments regarding their person or type of commercial transaction practiced, is eligible to engage in trade.

Article (18) Subject to legal provisions regarding guardianship over minors' property, if a minor has assets in trade, the competent court may order liquidation of their assets and withdrawal from this trade, or allow them to continue in it according to their best interest. If the court orders continuation, it may grant the minor's representative a general or restricted authorization to perform all necessary acts, recorded in the Commercial Register. The minor is liable only up to their assets exploited in this trade, and bankruptcy may be declared against them. Bankruptcy does not cover non-exploited assets, nor does it affect the minor's personal status.

Article (19) If serious reasons arise that may lead to mismanagement by the minor's representative, the court may withdraw the authorization mentioned in the preceding article without prejudicing rights acquired by third parties in good faith. The court clerk must, within 24 hours following the withdrawal order, notify the Commercial Register for entry.

Article (20) The following persons are prohibited from practicing trade: First: Any merchant declared bankrupt within the first year of practicing trade, unless restored. Second: Anyone finally convicted in one of the bankruptcy crimes (fraud or negligence), commercial fraud, theft, embezzlement, forgery, use of forged documents, unless restored. Violators are punished by imprisonment for up to one year and/or a fine not exceeding fifty thousand Qatari Riyals, or either of these penalties, with mandatory closure of the commercial premises in all cases.

Subsection Two: Commercial Books/Registers Article (21) Any person holding the status of a merchant under this Law must maintain commercial books required by the nature and importance of their trade, in a manner ensuring accurate statement of financial position.

Article (22) A merchant must maintain at least the following books: 1 – Original Day Book. 2 – General Ledger. 3 – Inventory Book. A merchant with capital not exceeding one hundred thousand Riyals is exempt from this obligation. Procedures for recording in the aforementioned books, their models, and inspection are regulated by a decision of the relevant Minister.

Article (23) All transactions performed by the merchant related to their commercial activity are recorded in the Original Day Book daily and in detail. Expenses and personal withdrawals are also recorded monthly as a summary.

Article (24) All transactions entered in the Original Day Book are transferred to the General Ledger, ensuring homogeneous transactions are recorded in accounts by type, with reference to the page number in the Original Day Book.

Article (25) Details of goods held by the merchant at the end of their financial year are recorded in the Inventory Book, or a summary if details are provided in separate books and statements. In this case, these books and statements are considered supplementary to the aforementioned book. A copy of the merchant's general balance sheet for each financial year is also recorded in the Inventory Book, unless a dedicated book is allocated.

Article (26) Commercial books must be free of any blanks or erasures in margins, deletions, or interlineations. Before use, each page must be numbered, and the Commercial Register must stamp each sheet. The merchant must submit these books to the Commercial Register within two months after the end of each financial year for endorsement confirming completion. If pages run out before the financial year ends, the merchant must submit them to the Commercial Register for endorsement after the last entry. In case of suspension of business activity, the merchant or heirs must submit these books to the Commercial Register for endorsement confirming this. Stamping and endorsement in the above cases are fee-free.

Article (27) A merchant must retain true copies of all correspondence, telegrams, and other documents sent for their commercial transactions, as well as all received correspondence, telegrams, invoices, and other documents related to their commercial transactions. Individuals practicing simple trade or small business (Article 16), and merchants with capital not exceeding one hundred thousand Riyals, are exempt from this obligation.

Article (28) A merchant or heirs must retain the Original Day Book, General Ledger, and Inventory Book for ten years from the date of closing. They must also retain correspondence, telegrams, documents, and copies mentioned in the preceding article for five years.

Article (29) The competent court, when hearing a case, may determine on its own or upon request of one of the parties to compel the merchant to submit their books and papers for inspection of entries related to the disputed subject, and extract what it deems necessary.

Article (30) Mandatory commercial books are evidence for the merchant owner against a trading counterparty, if the dispute relates to a commercial transaction and the books are regularly maintained according to preceding rules. This evidence may be rebutted by contrary evidence, which may also be taken from regularly maintained commercial books of the counterparty.

Article (31) Mandatory commercial books, whether regular or irregular, are evidence against the owner when relied upon by a counterparty (merchant or non-merchant), provided that entries favorable to the book owner are considered evidence for them.

Article (32) If one of the trading parties requests reliance on the other merchant's books, and the counterparty refuses without acceptable excuse, the judge shall accept the claimant's statement upon oath.

Article (33) Regular mandatory commercial books are evidence for the merchant owner against a non-merchant counterparty regarding debts arising from what the merchant supplies to their non-merchant client. This evidence may be rebutted by contrary evidence.

Article (34) Failure to maintain the mandatory books mentioned in Article (22), or failure to follow regulations regarding their maintenance, is punishable by a fine not less than one thousand Riyals and not exceeding ten thousand Riyals.

Article (35) A merchant using computers or other modern technology devices to organize commercial transactions is exempt from the provisions of Articles (22), (23), (24), (25), and (26) of this Law. Information obtained from computers or other modern devices is considered commercial books, and general regulations governing their use are issued by a decision of the relevant Minister.

Chapter Two: Shop, Commercial Address and Unfair Competition Section One: The Shop

Article (36) A shop is the merchant's premises and rights connected to this premise. A shop comprises a set of material and non-material elements, specifically: goods and commercial furniture, industrial machinery, customer connections, commercial address, lease rights, trademarks and trade names, patents, licenses, fees, and industrial designs.

Article (37) The shop owner's rights in the various elements are governed by specific provisions. If no specific provision exists, general rules apply.

Article (38) Laws and decisions regarding commercial names, trademarks, fees, industrial designs, patents, and other elements of industrial or literary property apply to them.

Subsection One: Sale of Shop Article (39) The sale of a shop is not valid unless by an official contract. The value of goods and material assets, and non-material elements, is specified separately in the sale contract. From the paid price, the value of goods is deducted first, then material assets, then non-material elements, unless otherwise agreed.

Article (40) The shop sale contract is published by recording it in the Commercial Register, and registration must be completed within one month from the date of sale. The first registration takes priority over subsequent registrations on the same shop, and ensures the seller's privilege for five years from its date. Registration is considered void if not renewed within this period. It is removed by mutual consent of interested parties or by a final judgment.

Article (41) The seller's privilege applies only to the parts of the premises specified in the registration. If not precisely defined, it applies to the commercial address, lease right, customer connections, and business reputation.

Article (42) Creditors of the seller may, within ten days from the date of publication of the sale, request the sale of the shop by auction if they determine an increase of one-tenth, provided they believe the sale price is less than the true value. The order for sale in this case is issued by the head of the competent court, upon a petition submitted by the creditor requesting sale.

Article (43) A seller who files a rescission lawsuit must notify creditors whose liens are recorded at their designated addresses in the registration. If the seller stipulates upon sale that it becomes legally rescinded if the price is not paid in specified installments, or if seller and purchaser agree to rescission, the seller must notify registered creditors at their designated addresses of the rescission via a registered letter with proof of receipt.

Article (44) If the shop is requested to be sold by public auction, the petitioner must notify previous sellers at their designated addresses in the registration via a registered letter with proof of receipt, notifying them that if they do not file a rescission lawsuit within one month from the date of notice, their right is extinguished against the successful bidder.

Article (45) A rescission lawsuit for non-payment of price is not accepted against third parties unless explicitly stipulated in the contract registration. The lawsuit is filed only regarding premises elements that were subject to sale, and bankruptcy does not prevent filing a rescission lawsuit.

Subsection Two: Lease of Shop Article (46) A shop may be leased, wholly or partially, subject to the provisions of this subsection.

Article (47) The lessee acquires merchant status and becomes subject to all obligations, including the necessity of registering their name in the Commercial Register within thirty days from the date of lease.

Article (48) The lessee must publish the lease contract by recording it in the Commercial Register within the same period specified in the preceding article, and must publish lease termination by the same method.

Article (49) The lessee must indicate this status in all documents related to their commercial activity, such as correspondence, statements, and supply requests.

Article (50) A person having a claim against the shop may demand maturity of their debt within ninety days from the date of lease publication; otherwise, their right against the lessee is extinguished by lapse of this period.

Article (51) The lessor is jointly liable with the lessee, up to the date of lease publication, for debts incurred by the latter during their operation of the shop.

Article (52) The provisions of the preceding article do not apply to a lease contract concluded by an agent for the lessor, unless authorized to conclude such contract.

Subsection Three: Mortgage of Shop Article (53) A shop may be mortgaged. If not precisely defined, the mortgage applies only to the commercial address, lease right, customer connections, and business reputation.

Article (54) Mortgage is not valid unless by an official contract. The mortgage contract must include a declaration from the debtor regarding any existing seller's privilege on the shop, and also the name of the insurance company that insured the shop against fire, if any.

Article (55) The mortgage contract is published by recording it in the Commercial Register, and registration must be completed within thirty days from the date of contract. Registration ensures the privilege for five years from its date. It is considered void if not renewed within this period, and removed by mutual consent of interested parties or by a final judgment.

Article (56) The mortgagor is responsible for maintaining the mortgaged shop in good condition, without having the right to claim anything from the mortgagee creditor in return.

Article (57) A lessee of a space containing mortgaged furniture and machinery used in operating the shop may exercise their privilege for no more than two years.

Article (58) If the shop owner fails to pay the full price to the seller, or debts to mortgagee creditors at maturity, the seller or mortgagee creditors may, after eight days from formal notice to their debtor and the shop possessor, submit a petition to the competent court requesting permission to sell by public auction elements of the shop, wholly or partially, subject to the seller's privilege or mortgagee creditor's claim. The sale takes place at the location, day, time, and method determined by the competent court, and is published at least ten days prior to occurrence.

Article (59) The seller and mortgagee creditors have, regarding amounts arising from insurance, if the cause of entitlement is established, the same rights and privileges they had on the insured items.

Section Two: Commercial Address Article (60) A commercial address consists of the merchant's name and surname, or an invented name, or both. It must clearly differ from previously registered commercial addresses. A commercial address may include details of persons mentioned in it, related to the type of trade designated for it. In all cases, a commercial address must correspond to reality and not lead to deception or harm public interest.

Article (61) A commercial address is registered in the Commercial Register according to law. After registration, another merchant cannot use this address for the type of trade they practice. If a merchant's name and surname resemble a commercial address registered in the register, they must add a distinguishing statement to their name.

Article (62) A merchant must conduct commercial transactions and sign related papers under their commercial address, and must write this address at the entrance of their shop.

Article (63) A commercial address cannot be disposed of independently from the shop. If a shop owner disposes of their shop, the commercial address is not included unless explicitly or implicitly stipulated.

Article (64) A person who acquires ownership of a shop cannot use their predecessor's commercial address unless it passes to them, or the predecessor permits its use. In all cases, they must add a statement indicating transfer of ownership to this address. If the predecessor agrees to use the original commercial address without addition, they are responsible for obligations contracted under this address if the successor fails to fulfill them.

Article (65) A person who acquires a commercial address along with a shop succeeds the predecessor in obligations and rights arising under this address. Any contrary agreement affecting third parties is not effective unless registered in the Commercial Register or notified to interested parties by a registered letter with proof of receipt. Liability for predecessor's obligations is extinguished after five years from the date of shop ownership transfer.

Article (66) A person who acquires a shop without its commercial address is not responsible for the predecessor's obligations, unless there is a contrary agreement registered in the Commercial Register.

Article (67) A company's address is subject to specific legal provisions. A company may retain its original address without modification if a new partner joins or an existing partner leaves, provided the company's name included the departing partner's name and this partner or their heirs agreed to keep the name in the address.

Section Three: Unfair Competition Article (68) If a commercial address is used by its owner without agreement permitting it, or used in a manner contrary to law, interested parties may request prevention of its use and may request removal if registered in the Commercial Register. They may also claim compensation if applicable. Violators are punished by imprisonment for up to one year and/or a fine not exceeding one hundred thousand Riyals, or either of these penalties.

Article (69) A merchant must not resort to fraud and deception in disposing of their goods, nor publish statements that may harm another competing merchant's interest; otherwise, they are liable for resulting damages.

Article (70) A merchant must not advertise untrue statements regarding the origin or characteristics of their goods, or regarding the importance of their trade. They must not falsely claim holding a rank, degree, or award, nor resort to any other deceptive means with the intent of attracting customers from a competing merchant; otherwise, they are liable for resulting damages.

Article (71) A merchant must not entice employees or staff of another merchant to assist in attracting this merchant's customers, or to leave this merchant's service and join theirs, or to reveal the competitor's secrets. These acts are considered unfair competition, entitling compensation.

Article (72) If a merchant gives an employee or former worker a certificate untrue to reality, and this certificate deceals another merchant in good faith causing them damage, the injured merchant may, depending on circumstances and conditions, claim appropriate compensation from the first merchant.

Article (73) A person whose profession is providing commercial information about merchants, and provides untrue statements regarding a merchant's conduct or financial status, with intent or gross negligence, is liable for compensation resulting from such damages.

Chapter Three: Commercial Obligations Article (74) Persons jointly obligated for a commercial debt are liable jointly, unless the law or agreement stipulates otherwise.

Article (75) A guarantee is commercial if the guarantor guarantees a commercial debt with respect to the debtor, or if the guarantor is a merchant and has an interest in the debt's maturity, unless law or agreement stipulates otherwise. A guarantee arising from commercial paper as a precautionary guarantee, or from the appearance of these papers, is always a commercial guarantee.

Article (76) In a commercial guarantee, guarantors are jointly liable among themselves.