Dr. Ahmad Ichrakieh
Associate Professor of Commercial Law – Faculty of Law and Political Science – Lebanese University

Abstract

Experience and practice in the business field led companies and banks to strive to create modern and more flexible legal methods to save companies from stumbling and to restore their operational capacity, but also to secure the management expertise and funding necessary to assist the joint stock company to remain in the market and float. One of the most prominent of these methods is the Carrying of Stock Agreement (La convention de portage d’actions).
The Carrying of Stock Agreement raises many questions, especially in terms of its legal system. In the absence of any particular text or legislation, this agreement remains as a special contract «Sui generis,» which arose as a result of business practice in order to meet many legal and financial services. However, this agreement faces many legal challenges and problems. As for companies’ commercial law, many problems may hinder its applicability in French law as in the Lebanese and Kuwaiti laws, especially that the shareholder, under this agreement, has no interest in the company’s activity so as to be a partner in it, and requires no losses during the contract period. This leads to the following question: Does this not collide with the rules of the law of commercial companies, especially the rule of intention of partnership and the sharing of profits and losses?
By relying on a legal and analytical approach to the various legal texts governing this agreement the French, Lebanese and Kuwaiti laws, this study aims at clarifying the legal system for the Carrying of Stock Agreement and distinguishing it from similar contracts, as well as specifying the desired its objectives and the weak points in terms of its applicability through two independent requirements: The first deals with the flotation of the joint stock company through the Carrying of Stock Agreement, and the second is the applicability of the agreement in question in the Lebanese and Kuwaiti laws in the light of French law.
The study concludes by explaining that the Carrying of Stock Agreement is an un-named contract, based on the civil law of contracts, which constituted the fundamental part of its legal system. It also discusses the breadth of its scope and the non-limited objectives that the parties could hope for in corporate floatation. Moreover, this contract does not clash with the conditions concerning the validity of the company’s contract, as stated in the French jurisprudence, and there is no objection in principle to its applicability in the Lebanese and Kuwaiti laws.
Keywords: Joint stock, contract, holding shares, promise to contract, float, intention to participate, Lion’s share.

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