Legal Aspects of Non-Profit Companies: A Comparative Study in Light of The Kuwaiti Companies’ Law and its Executive Regulation
Dr. Khalil Victor Tadrous
Associate Professor of Commercial Law – KILAW
Abstract:
This article addresses the regulation of non-profit companies under the Kuwaiti Companies’ Law and compares it to a few other laws. Non-profit companies are a new type of company that serves a social purpose. This promotes the social function of capital in Kuwait.
Non-profit companies’ aim is not realizing profit, but rather has other greater objectives that include offering social, human, health, environmental or educational services and so on. The Kuwaiti legislature emphasized that any net income realized by the company can be added to its capital and may not be used in any means other than realizing its non-profit objectives and their promotion.
The importance of this type of company is obvious. Besides the associations, its social role allows it to offer several services through a separate legal entity. This entity can take any of the companies’ forms except for the public corporation.
Addressing this topic, the author hopes to contribute to the Arab legal literature an article defining non-profit companies, their management, dissolution and surplus distribution on the partners.
In this regard, the article sheds light on several comparative laws such as the Canadian law, Jordanian law, Palestinian law, and other laws. This comparison to the Kuwaiti law highlights its main drawbacks that need to be amended, to enable the non-profit companies to exercise their social role in Kuwaiti society.