Solidarity companies, according to the Jordanian corporate law, are considered one of the simplest and most traditional forms of companies. These companies are established among a group of people who participate in the establishment of the company and bear collectively and unlimited their obligations. The following is a summary of the most important items relating to Solidarity companies in accordance with the Jordanian Companies Law:
- Definition:
- The joint liability company is the company that consists of two or more partners, where each partner is responsible for the obligations of the company and unlimited liability, meaning that the partners are all fully responsible for the company’s debts from their personal funds.
2- Establishment:
- Number of partnersThe number of partners in a joint liability company shall not be less than two persons.
- The contractThe partnership shall be established based on a written contract between the partners in which the capital, the shares ratio, the terms of work, and the distribution of profits and losses shall be established.
3- Responsibility:
- Partner responsibilityPartners in Solidarity Companies are liable and unlimited liability for all debts and obligations of the Company. This means that each partner may bear the full company’s obligations, not just his share.
- creditorsCreditors can refer to any partner to collect the company’s debts directly.
4- Company management:
- co-managementThe joint liability company shall be managed by the partners or their representatives in accordance with what is stipulated in the company’s incorporation contract. If the management is not clearly defined, each partner shall be deemed to run the company.
- Partner PowersEach partner has the right to participate in the management and decision-making of the company, unless the company’s contract stipulates otherwise.
5- Trade name:
- The name of the joint liability company shall include the names of all the partners or the name of one of them followed by ‘and his partners’ with the addition of evidence that the company is a joint liability company.
- In the event of the death or withdrawal of a partner, the company’s trade name shall be modified if it is continued with the remaining partners.
6- Transfer of quotas:
- No partner in the joint liability company may waive or sell his share without the consent of all other partners, unless the contract stipulates otherwise.
- In the event that a new partner enters, the new partner shall abide by the same responsibilities towards the company’s debts, even if these debts were established before joining.
7- Company termination:
- The joint liability company shall expire with the death, withdrawal or bankruptcy of a partner, unless the partners agree to continue with the remaining partners.
- The company shall also terminate by a decision of the partners themselves or by a judicial order in the event of the inability to fulfill the financial obligations.
8- Filter:
- After the expiry of the joint liability company, it must be liquidated and distributed among the partners as determined by the contract or law. The liquidation shall be carried out either by a decision of the partners or by a court ruling.
9- Censorship:
- Al-Tadamon Company is obligated to prepare its accounts and provide periodic financial reports to the competent authorities, and are subject to the laws regulating companies in terms of financial and administrative control.
10- Legal personality:
- The joint liability company acquires a legal person independent of the partners once it is registered, but the responsibility of the partners is inseparable from the company.
11- Profits and losses:
- Profits and losses are distributed among the partners, according to what was agreed upon in the articles of association. In the absence of an agreement, the distribution is made equally between them.
Jordan’s Solidarity Companies are among the types of partners’ commitment to personal responsibility, and are a suitable option for small and medium enterprises that depend on mutual trust between partners.