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

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

We Tamim bin Hamad Al Thani, Deputy Emir 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. (32) 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 taking the opinion of the Shura Council, We have decided the following Law:

Article (1) The provisions of the Commercial Law attached to this Law shall be implemented. Subject to the provision of Article (3), Books Two, Three, Four, and Five of the aforementioned Civil and Commercial Transactions Law are repealed.

Article (2) The necessary decisions to implement the attached Law shall be issued by the competent Ministers, each within their respective jurisdiction.

Article (3) All competent authorities shall implement this Law, each within their respective jurisdiction. It shall come into effect six months after 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 be implemented three years after the date of entry into force of this Law. During this period, the provisions of Article (457) of the aforementioned Civil and Commercial Transactions Law shall apply to cheques.

Tamim bin Hamad Al Thani Deputy Emir of the State of Qatar

Issued at the Diwan Amirieh on: 2/7/1427 AH Signatures: 27/7/2006 AD.

Commercial Law Preliminary Chapter General Provisions

Article (1) The provisions of this Law shall apply to merchants, and to all commercial acts performed by any person, even if they are not a merchant.

Article (2) The provisions contained in this Law or in other laws related to commercial matters shall apply to commercial issues. If no provision exists, commercial custom shall be applied. Specific custom or local custom shall take 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 (3) Commercial acts in general are acts performed by a person with the intention of speculation, even if they are not a merchant. Speculation is the pursuit of profit through the circulation of transactions.

Article (4) The following shall, in particular, be considered commercial acts:

• 1 The purchase of goods and other movables, of any kind, with the intention of selling them, whether sold as is or after being prepared in another form.
• 2 The purchase of goods and other movables, of any kind, with the intention of leasing them, or hiring them with the intention of re-leasing them.
• 3 The sale, lease, or re-leasing of purchased or hired goods as described above.
• 4 The purchase of real estate with the intention of selling it in its original state or after subdivision, and the sale of real estate purchased for this purpose.
• 5 The establishment of commercial companies.
• 6 Construction contracts.

Article (5) The following shall be considered commercial acts if performed professionally:

• 1 Bank transactions.
• 2 Activities of exchange, financial investment, and financing.
• 3 Commercial agency and brokerage activities.
• 4 Supply contracts.
• 5 Public warehouse activities and liens on assets deposited therein.
• 6 Extraction operations for natural wealth resources such as quarries, mines, oil, and gas, etc.
• 7 Insurance of various types.
• 8 Activities and operations of establishments open to the public, such as public stadiums, cinemas, hotels, restaurants, and auction houses.
• 9 Education activities and private hospitals.
• 10 Public utility investments, such as the distribution of water, electricity, and gas, and the conduct of postal, telegraphic, and telephone communications, etc.
• 11 Transport by land, sea, and air.
• 12 Maintenance, cleaning, and other commercial services.
• 13 Business agencies, tourism offices, import and export offices, Hajj planning, and recruitment.
• 14 Activities related to printing, publishing, journalism, radio and television, news or image transmission, advertising, and book sales.
• 15 Industry, even if associated with agricultural investment, and construction and manufacturing contracts.
• 16 Activities related to finishing, construction, renovation, and demolition contracts.

Article (6) All acts related to maritime and aviation navigation shall be considered commercial acts, in particular:

• 1 The construction, sale, purchase, lease, hiring, and repair of ships or aircraft.
• 2 Lending and borrowing.
• 3 Contracts related to the use of the ship's captain and its capabilities, and the pilot's capabilities, and all its workers.
• 4 Maritime and aviation supplies, and any operation related to them such as the purchase or sale of their equipment, tools, ammunition, fuel, ropes, sails, provisions, and aircraft supplies.
• 5 Maritime and aviation insurance, of various types.

Article (7) All acts related to commercial instruments shall be considered commercial acts.

Article (8) Any act that can be measured against the acts mentioned in the previous articles due to similarity in characteristics and objectives shall be considered a commercial act. Acts also considered commercial are those related to or facilitating the commercial transactions mentioned in the previous articles, and all acts performed by the merchant for the needs of their trade.

Article (9) The default for the merchant's contracts and obligations is that they are commercial, unless evidence proves otherwise.

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

Article (11) The following shall, in particular, not be considered commercial acts:

• 1 The production of a work of art by oneself or using employees, and its sale.
• 2 The printing and sale of one's own work.
• 3 The practice of liberal professions by their practitioners, such as doctors, engineers, lawyers, and those in their category.
• 4 The sale of crops produced from land owned by the farmer or cultivated by them, even after processing them using available means in their agricultural exploitation. However, if the farmer establishes a permanent production or factory to sell their produce as is or after processing, the sale in this case is considered a commercial act.

Section Two The Merchant Subsection One: The Merchant in General

Article (12) A merchant is anyone who practices a commercial act in their own name, possesses the required legal capacity, and adopts this act as their profession. Any commercial company, and any company adopting a commercial form, shall also be considered a merchant, even if it engages in non-commercial acts.

Article (13) Anyone who announces to the public by any means of publication that they have entered commerce shall be considered a merchant, even if they have not adopted commerce as their profession.

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The status of merchant is established for anyone who has professed commerce in their own name, a borrowed name, or secretly behind another person, in addition to being established for the apparent person. If a person prohibited from trading by special laws or systems engages in commerce, they shall be considered a merchant, and the provisions of this Law shall apply to them.

Article (14) A person who performs an occasional commercial transaction without adopting commerce as their profession shall not be considered a merchant. However, the commercial transaction performed by them shall be subject to the provisions of this Law.

Article (15) Ministries, other government bodies, public entities and institutions, associations, and clubs shall not be considered merchants. However, commercial transactions conducted by these entities shall be subject to the provisions of this Law, except as specifically exempted. The status of merchant is established for companies established by or in which the State participates, and other entities and public institutions that primarily engage in commercial activity. This status is also established for branches of foreign companies and public institutions that engage in commercial activity in Qatar.

Article (16) Individuals who practice a simple craft or small trade, relying primarily on their own work, are not subject to the obligations of merchants regarding commercial books, registration in the Commercial Register, and the provisions of bankruptcy and interim settlement. A decision by the competent Minister shall determine simple crafts and small trade.

Article (17) Every Qatari who has reached the legal age of majority, and against whom there is no legal impediment regarding their person or the type of commercial transaction they practice, is eligible to engage in commerce.

Article (18) Subject to legal provisions regarding guardianship over the assets of minors, if a minor has assets in commerce, the competent court may order the liquidation of their assets and their withdrawal from this commerce, or their continuation in it, according to what their best interest requires. If the court decides on the continuation of commerce, it may grant the guardian of the minor a general or restricted authorization to perform all necessary acts for this purpose, and the authorization shall be registered in the Commercial Register. The minor shall not be liable except to the extent of their assets exploited in this commerce. Their bankruptcy may be declared, but bankruptcy does not cover assets not exploited in commerce, nor does it have any effect on the person of the minor.

Article (19) If new circumstances arise that may lead to the poor management of the guardian of the minor, the court may withdraw the authorization mentioned in the previous article without prejudice to the rights acquired by third parties in good faith. The court clerk must notify the Commercial Register to present it within twenty-four hours following the issuance of the order to withdraw the authorization.

Article (20) The following persons are not permitted to practice commerce: First: Any merchant who declared bankruptcy within the first year of practicing commerce, unless their status is restored.

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Second: Anyone who has been finally convicted of one of the crimes of fraudulent or negligent bankruptcy, commercial fraud, theft, fraud, breach of trust, forgery, or use of forged documents, unless their status is restored. Whoever violates this provision shall be punished with imprisonment for a period not exceeding one year, and a fine not exceeding fifty thousand riyals, or one of these two punishments, with an order to close the commercial establishment in all cases.

Subsection Two: Commercial Books

Article (21) Anyone established as a merchant under the provisions of this Law must keep the commercial books required by the nature of their trade, in a manner that ensures an accurate statement of their financial position.

Article (22) The merchant must keep at least the following books:

• 1 The original daily journal.
• 2 The general ledger.
• 3 The inventory book. The merchant whose capital does not exceed one hundred thousand riyals is exempt from this obligation. A decision by the competent Minister shall regulate the procedures for recording in the aforementioned books, their binding, and their inspection.

Article (23) All operations performed by the merchant related to their commercial activity shall be recorded in the original daily journal, and the recording shall be done daily and sequentially. Expenses and personal withdrawals shall also be recorded monthly and in aggregate.

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Article (24) All operations recorded in the original daily journal shall be transferred to the general ledger, ensuring that homogeneous operations are recorded in accounts according to their type, with reference to the page number of the recording in the original daily journal.

Article (25) The details of the goods available to the merchant at the end of their financial year, or a summary of them if their details are in separate books and statements, shall be recorded in the inventory book. In this case, these books and statements are considered an integral part of the mentioned book. A copy of the general balance sheet of merchants for each financial year shall also be recorded in the inventory book, unless a special book is designated for it.

Article (26) Commercial books must be free of any blanks, marginal notes, erasures, or interlineations. Before using these books, each page must be numbered, and the Commercial Register must stamp each page. The merchant must submit these books to the Commercial Register within two months from the end of each financial year for endorsement indicating their completion. If the pages of these books end before the end of the financial year, the merchant must submit them to the Commercial Register for endorsement indicating this after the last entry. The merchant or their heirs, in the event of the cessation of the establishment's activity, must submit these books to the Commercial Register for endorsement indicating this. The stamping and endorsement in the above cases shall be without fees.

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Article (27) The merchant must keep copies identical to the original of all correspondence, telegrams, etc., that they send for commercial purposes, and must also keep all correspondence, telegrams, invoices, and other documents received by them related to their commercial activities. Individuals practicing a simple craft or small trade, as mentioned in Article (16) of this Law, and merchants whose capital does not exceed one hundred thousand riyals, are exempt from this obligation.

Article (28) The merchant or their heirs must keep the original daily journal, the general ledger, and the inventory book for a period of ten years, starting from the date of their closure. They must also keep the correspondence, telegrams, documents, and copies mentioned in the previous article for a period of five years.

Article (29) The competent court, when hearing a case, may decide to refer itself, or upon the request of one of the parties, to compel the merchant to present their books and papers, to review the entries related to the subject of the dispute, and to extract what it deems appropriate from them.

Article (30) The mandatory commercial books shall be evidence for the merchant owner against their merchant opponent, if the dispute is related to a commercial act, and the books are regular according to the prescribed rules. This evidence can be rebutted by contrary evidence, which may be taken from the regular commercial books of the opponent.

Article (31) The mandatory commercial books, whether regular or irregular, shall be evidence against the owner if the opponent, whether a merchant or not, relies on them. However, entries in favor of the book owner shall be considered evidence for them.

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Article (32) If one of the merchant parties requests reliance on the contents of the opponent merchant's books, and the opponent refuses without acceptable excuse, the judge shall rely on the claimant's oath.

Article (33) The regular mandatory commercial books shall be evidence for the merchant owner against their non-merchant opponent, regarding the debt arising from what the merchant records for their non-merchant client. This evidence can be rebutted by contrary evidence.

Article (34) Failure to keep the mandatory books mentioned in Article (22) of this Law, or failure to follow the regulations regarding their organization, shall be punished with a fine not less than one thousand riyals and not more than ten thousand riyals.

Article (35) The merchant who uses a computer or other modern technology devices to organize their commercial operations is exempt from the provisions of Articles (22), (23), (24), (25), and (26) of this Law. Information derived from the computer or other modern devices shall be considered commercial books. General controls regulating their use shall be issued by a decision of the competent Minister.

Chapter Two The Establishment, Commercial Title, and Unfair Competition Section One: The Establishment

Article (36) The establishment is the merchant's place and the rights connected to this place.

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The establishment includes a set of material and immaterial elements, in particular: goods, commercial furniture, industrial machinery, customer connections, commercial titles, lease rights, trademarks and trade names, patents, licenses, fees, and industrial models.

Article (37) The rights of the establishment owner in the different elements it comprises are regulated by special provisions. If no special provision exists, general rules shall apply.

Article (38) Legislation regarding names, trademarks, fees, industrial models, patents, and other elements of industrial or literary property is governed by special laws and decisions.

Subsection One: Sale of the Establishment

Article (39) The sale of the establishment is not valid except by an official deed. The price of the goods, material elements, and immaterial elements shall be determined separately in the sale contract. The paid portion of the price shall first be deducted from the price of the goods, then the price of the material elements, then the immaterial elements, even if agreed otherwise.

Article (40) The sale contract of the establishment shall be published by registering it in the Commercial Register. The registration must be carried out within one month from the date of sale. The first registration takes precedence over subsequent registrations on the same establishment. The registration ensures the preservation of the seller's privilege for five years from its date. The registration is considered void if not renewed within this period. The registration is cancelled by mutual agreement of the parties or by a final judgment.

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

Article (42) The seller's creditors, within ten days from the date of publication of the sale, may request the sale of the establishment by auction if they believe the price is ten percent less than the true value. The order for sale in this case shall be issued by the head of the competent court, upon a petition submitted by the creditor requesting the sale.

Article (43) The seller who files a lawsuit for cancellation must notify the creditors who have registrations on the establishment at their chosen addresses specified in their registrations. If the seller stipulated in the sale that it becomes legally cancelled if the price is not paid by the specified deadline, or if the seller and buyer agree to cancel the sale, the seller must notify the registered creditors at their chosen addresses of the cancellation or the agreement to cancel, via a registered letter with proof of receipt.

Article (44) If the sale of the establishment is requested by public auction, the applicant must notify the previous sellers at their chosen addresses specified in their registrations, via a registered letter with proof of receipt, informing them that if they do not file a cancellation lawsuit within one month from the date of notification, their right to do so is forfeited against the successful bidder.

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Article (45) A lawsuit for cancellation due to non-payment of the price is not admissible against third parties unless it is explicitly stated in the contract registration. The lawsuit is only brought regarding the elements of the establishment that were the subject of the sale, and bankruptcy does not prevent the filing of a cancellation lawsuit.

Subsection Two: Lease of the Establishment

Article (46) The establishment may be leased, in whole or in part, according to the provisions of this subsection.

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

Article (48) The lessee must publish the lease contract by registering it in the Commercial Register within half the period specified in the previous article, and publish the termination of the lease in the same manner.

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

Article (50) Anyone who has a debt against the establishment may demand the maturity of their debt within ninety days from the date of publication of the lease contract; otherwise, their right against the lessee for the delay in maturity is forfeited.

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Article (51) The lessor is liable jointly with the lessee, up to the date of publication of the lease contract, for debts incurred during the period of their management of the establishment.

Article (52) The provisions of the previous article do not apply to a lease contract concluded by a representative of the lessor, unless they are authorized to conclude such a contract.

Subsection Three: Pledge of the Establishment

Article (53) The establishment may be pledged. If the pledge does not precisely define what it covers, it applies only to the commercial title, lease right, customer connections, and commercial reputation.

Article (54) The pledge is not valid except by an official deed. The pledge contract must include a declaration by the debtor regarding whether there is a seller's privilege on the establishment, as well as the name of the insurance company that insured the establishment against fire, if any.

Article (55) The pledge contract shall be published by registering it in the Commercial Register. The registration must be carried out within thirty days from the date of the contract. The registration ensures the preservation of the privilege for five years from its date. The registration is considered void if not renewed within this period. The registration is cancelled by mutual agreement of the parties or by a final judgment.

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Article (56) The pledgor is responsible for maintaining the pledged establishment in good condition, without having the right to claim anything from the secured creditor in return.

Article (57) The lessor of the premises where the pledged furniture and machinery used in the operation of the establishment are located may not exercise their privilege for more than two years.

Article (58) If the establishment owner fails to pay the full price to the seller, or the debt to the secured creditors at maturity, the seller or the secured creditor, after eight days from the date of formal notice to their debtor and the holder of the establishment, may submit a petition to the competent court requesting permission to sell by public auction the elements of the establishment covered by the seller's privilege or the secured creditor's privilege. The sale shall take place at the place, day, hour, and manner determined by the competent court, and notice of the sale shall be published at least ten days before it occurs.

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

Section Two: Commercial Title

Article (60) The commercial title consists of the merchant's name and surname, or an invented name, or both. It must be distinct and clear from previously registered commercial titles. The commercial title may include specific data about the persons mentioned in it, related to the type of trade for which it is designated.

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In all cases, the commercial title must match the reality and must not lead to deception or harm the public interest.

Article (61) The commercial title shall be registered in the Commercial Register according to the provisions of the Law. After registration, no other merchant may use this title in the type of trade they practice. If the merchant's name and surname resemble the registered commercial title, they must add a distinguishing statement to their name.

Article (62) The merchant must conduct their commercial transactions and sign documents related to these transactions using their commercial title. They must write this title at the entrance of their establishment.

Article (63) The commercial title cannot be disposed of independently from the disposal of the establishment. If the establishment owner disposes of their establishment, the disposal does not include the commercial title unless explicitly or implicitly stated.

Article (64) Anyone who acquires ownership of an establishment may not use their predecessor's commercial title unless the title has passed to them, or the predecessor has given them permission to use it. In all cases, they must add a statement to this title indicating the transfer of ownership. If the predecessor agrees to the use of the original commercial title without addition, they shall be responsible for the obligations of the successor under this title if the successor fails to meet these obligations.

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Article (65) Whoever acquires a commercial title along with an establishment succeeds the predecessor in the obligations and rights arising under this title. No contrary agreement is effective against third parties unless registered in the Commercial Register or notified to interested parties via a registered letter with proof of receipt. Liability for the predecessor's obligations expires five years from the date of transfer of ownership of the establishment.

Article (66) Whoever acquires ownership of an establishment without its commercial title is not responsible for the obligations of their predecessor, unless there is a contrary agreement registered in the Commercial Register.

Article (67) The title of companies shall be according to the special legal provisions. A company may retain its original titles without modification if a new partner joins or an existing partner leaves, provided the company's title included the partner's name, as long as this partner or their heirs agree to keep the name in the title.

Section Three: Unfair Competition

Article (68) If a commercial title is used by someone other than the owner without agreement, or if the owner uses it in a manner contrary to the law, interested parties may request the cessation of its use. They may also request its cancellation if it is registered in the Commercial Register, and they may seek compensation if applicable. Violation of the provisions of the previous paragraph shall be punished with imprisonment for a period not exceeding one year and a fine not exceeding one hundred thousand riyals, or one of these two punishments.

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Article (69) The merchant is not allowed to resort to deception and fraud in disposing of their goods, nor are they allowed to publish data that could harm another competing merchant's interests. Otherwise, they shall be liable for the resulting damages.

Article (70) The merchant is not allowed to disseminate false information regarding their products, their descriptions, or the importance of their trade. They are not allowed to falsely claim to hold a rank, certificate, or award, nor resort to any other misleading method with the intention of diverting customers from a competing merchant. Otherwise, they shall be liable for the resulting damages.

Article (71) The merchant is not allowed to entice employees or staff of another merchant to help them divert customers from this merchant, or to leave this merchant's service and join theirs, or to prolong the secrets of their competitor. These acts are considered unfair competition and warrant compensation.

Article (72) If a merchant gives a former employee or worker a certificate contrary to the truth, and this certificate misleads another merchant in good faith, causing them damage, the damaged merchant may, according to circumstances and conditions, seek appropriate compensation from the first merchant.

Article (73) Anyone whose profession is to provide commercial houses with information about the status of merchants, and who provides false data about the conduct or financial status of a merchant, intentionally or through gross negligence, shall be liable for the damages resulting from this.