Removal of Manager of a Limited Liability Company in Kuwait is a critical topic, as many partners in such companies are unaware of their rights and authorities. Here we explain the legal grounds for removal, the conditions that must be met, the removal procedures, and the necessary steps to effect the removal.
Manager Appointment and Grounds for Removal
Under Article 103 of Law No. 1/2016, the manager of a limited liability company (LLC) is appointed either by the partners in the company’s memorandum of association or, if no appointment is made therein, by an ordinary general assembly of partners. The manager holds full authority to run the company within the scope of that appointment.
In practice, removing a manager who was appointed in the memorandum requires amending the company’s founding contract, which in turn demands the requisite majority vote at a general assembly meeting.
Legal Reasons for Removal of Manager of a Limited Liability Company
Articles 104 and 106 of Law No. 1/2016 provide that a manager may be removed for:
- Committing crimes involving fraud.
- Committing serious errors that cause substantial harm to the company.
- Violating any provision of Article 106 of the Companies Law.
- Managing a competing or similar business undertaking.
- Contracting with the company for personal benefit or on behalf of others.
Removal must be initiated by one or more partners holding at least one-quarter of the company’s capital. A judicial order, issued upon a lawsuit detailing the precise legal grounds, is required to effect the removal, and it must be executed in accordance with the Companies Law.
For legal advice, contact Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923.
Conditions for Removal of Manager of a Limited Liability Company
To remove or appoint a manager, the following conditions apply:
- If the new manager is not already a partner, an electronic request must be made to verify a clean criminal record.
- The request is filed electronically in the commercial register via the Ministry of Commerce and Industry portal.
- A suitable meeting date must be scheduled, and the general assembly minutes submitted within 30 days.
- The company’s commercial license must be valid.
- The meeting minutes must be signed by the manager or by the general assembly chair.
Documents Required for Removal of Manager of a Limited Liability Company
Key documents include:
- Minutes of the general assembly meeting, signed by the manager if not appointed in the memorandum.
- Signatures of all (or most) partners approving the removal.
- Details of the manager’s powers and their distribution among other managers, if any.
- Company financial guarantees.
- Minutes of an extraordinary general assembly meeting if the manager was appointed in the memorandum.
- A removal request signed by the manager if they did not sign the extraordinary meeting minutes.
- Current commercial license.
- Civil ID copy of the outgoing manager.
For a full list of documents, call Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923.
Methods of Removal of Manager of a Limited Liability Company
- Removal by Ordinary General Assembly The partners vote during an ordinary general assembly; a majority in favor removes the manager.
- Removal by Court Judgment The court issues a judgment specifying the termination date of the manager’s tenure. Such removal does not affect the manager’s ownership rights or capital contributions.
Book your consultation with our specialist corporate lawyers at Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group via 50766923 to safeguard your rights.
Frequently Asked Questions
- How can a manager of an LLC be removed? By a majority vote in an ordinary general assembly or by a court judgment.
- How do I engage a corporate lawyer for removal? Contact Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923 to schedule the earliest possible appointment.
- What are the manager’s powers in an LLC? The manager handles all legal and financial matters, makes operational decisions, and acts within the mandate set by the Companies Law.
- How is the manager changed? Through an extraordinary general assembly resolution, followed by amending the memorandum and submitting required documents to the Ministry of Commerce and Industry.
- What procedures amend an LLC’s memorandum? File a request to amend the memorandum, submit the original signed meeting minutes, and provide the amended memorandum with updated provisions.
- Can a removed manager appeal the removal? Yes. They may challenge the decision in court if due process or clear grounds were lacking.
- What legal steps must be followed for removal? Adhere to the Companies Law procedures and obtain the necessary partner resolutions.
- Is the removed manager entitled to compensation? Compensation depends on the service contract; if removal lacks clear cause, contractual indemnities may apply.
- Will removal disrupt company operations? Short-term instability may occur, but correct changes can enhance company performance and strategic direction.
For legal assistance in removing an LLC manager, contact Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923. Our team will guide you through each step, document requirement, and procedural detail to ensure a smooth process.