Appointment, Retirement, Resignation, and Removal of a Director (English/Arabic)
Overview
This Practice Note delves into the processes surrounding appointing, retiring, resigning, and removing directors within companies operating under Bahraini law. As financial institutions are governed by the Central Bank of Bahrain (CBB) and the provisions of the rulebook, this Practice Note will not cover them.
The pertinent legislation governing directorship in Bahrain includes Bahrain Decree-Law No. 21/2001 On the Issuance of the Commercial Companies Law, as amended, and Bahrain Decision No. 19/2018 On the Issuance of the Management and Corporate Governance Code, as amended. Bahrain Decision No. 19/2018 applies to all joint-stock companies registered under Bahrain Decree-Law No. 21/2001, while limited liability companies are exempt from its provisions.
Practical Guidance
Definition of a director
A director is an individual elected to oversee a company's daily operations along with other directors. They have authority over the management, administration, and supervision of the company's affairs.
Qualifications and requirements of a director
In accordance with article 173 of Bahrain Decree-Law No. 21/2001, a director must fulfill the following conditions:
Full legal capacity to act.