SME issues

The amount of small and medium enterprises that have been flourishing in Kuwait in the past few years has been absolutely inspiring. Oil prices might be dropping, but other sectors have been blooming, from food and beverage to the creative industry, fashion, music, design, you name it! I am very proud to be representing clients in such industries and although the majority of my clients are prospering in their field, they do face challenging legal issues. I have written the issues and the solutions available.

Question: My partners and I have been in the food and beverage industry for the past four years. Although the business is succeeding, I would like to leave the partnership as I would like to do my own thing. I am also not happy with the terms and conditions that we are working under. How can I leave?

I honestly don’t answer questions like these without reviewing all the necessary documents and gathering more information about the company, the company’s articles of association and the company’s policies, to name a few. The general procedure would be for you to offer your share to the other partners first - they have priority over your share. Should they refuse or refuse to respond to your offer, you can publish your offer to them in a newspaper and wait for seven days. If you do not receive a response within this timeframe from any of the partners, then you can sell

A company does not need a managing partner, but can just have a registered manager. You can leave the company and all the partners need to do is hire a manager, if they can’t or don’t want to be managers.

your share to a third party or waive your shares to the other partners.

Question: We have been in the real estate industry for the past five years, and I have been the managing partner. I want to leave now and sell my shares, but my partners are saying I can’t because there isn’t anyone suitable to be the managing partner. The other partners have fulltime jobs and therefore cannot be managing partners. What can I do?

A company does not need a managing partner, but can just have a registered manager. You can leave the company and all the partners need to do is hire a manager, if they can’t or don’t want to be managers. The manager will be officially registered and is responsible for the company’s presence.

Question: We are a limited liability company with four partners. I would like to leave the company, but I have no idea how much my share is worth. I would like to sell my share to them, but how do I calculate how much it is worth?

Unfortunately as lawyers, we don’t do such calculations. Also, there isn’t a right or wrong way to do it. You could go to a financial firm and ask them to do the calculations for you. They will not only take into account how much the capital of the company is or the assets, but also the current market value that includes all of the above. It’s always good to know how much your shares are worth, but you could also just quote an offer that you are happy with, even if it’s more or less. The amount doesn’t have to be the market price.