The board of directors of a company shall in each financial year, set aside ten percent (10%) of the net profits, after deduction of taxes, for establishing a legal reserve until such legal reserve amounts to at least one third of the company’s share capital. Such legal reserve may be used for covering the company’s losses and the increase of its share capital by way of issuing shares and it shall not be distributed to the shareholders as dividends except where the company reduces its share capital, provided that the legal reserve shall not be less than one third of the share capital after the reduction.
This site currently publishes a verified part of the instrument; the remaining provisions continue to exist and apply independently of their absence from this corpus. Interpretation and application must be checked against the official Arabic text and the current version.