This Law, comprising 289 articles, aims to establish a transparent corporate governance framework by requiring accurate financial reporting, audits, and compliance with governance standards, while offering flexible company structures that encourage local and foreign investment and support economic and technological development and applies to companies engaged in commercial activities.
Article 6 recognizes six principal types of companies: general partnerships, limited partnerships, limited liability companies, venture capital companies, public shareholding companies, and private shareholding companies. The Law regulates (i) general partnerships in Articles 9–59, setting out the rules governing their formation and registration, the rights and obligations of partners, management authority, amendments to partnership agreements, partner liability, dissolution, and liquidation; (ii) limited partnerships in Articles 60–89, distinguishing between general partners, who manage the company and bear unlimited liability, and limited partners, whose liability is generally limited to their capital contributions, while also regulating their formation, registration, management, and dissolution; (iii) public shareholding companies in Articles 90–224, establishing detailed rules on incorporation, share capital, the issuance and transfer of shares, shareholders’ rights, general assemblies, boards of directors, executive management, mergers, acquisitions, and corporate restructuring, thereby forming the core corporate governance framework of the Law and promoting investor protection and sound corporate management; (iv) corporate governance requirements for public shareholding companies in Articles 143–152, including the adoption of governance structures and the definition of the duties, powers, and responsibilities of boards of directors; (v) private shareholding companies in Articles 225–276, providing a flexible corporate structure that combines many characteristics of public shareholding companies with fewer regulatory requirements, and regulating their incorporation, management, share transfers, shareholder rights, and capital changes; and (vi) limited liability companies (LLCs) in Articles 277–330, one of the most widely used corporate forms in Jordan, governing their establishment, capital requirements, management, transfer of ownership interests, limitation of liability, creditor protection mechanisms, and dissolution procedures.
Recognizing the importance of innovation and entrepreneurship, the Law establishes a dedicated regime for venture capital companies, to facilitate investment in start-ups and high-growth enterprises and provide a legal framework tailored to venture capital financing. Throughout the Law, the Companies Controller (Registrar of Companies) is entrusted with extensive supervisory and regulatory powers, including maintaining company registers, reviewing registration applications, monitoring compliance, approving certain corporate actions, publishing company information. The Law further contains provisions governing company mergers, transformations, acquisitions, liquidation, and winding-up, ensuring that corporate restructuring and dissolution occur in an orderly manner while protecting the interests of shareholders, creditors, employees, and other stakeholders.
The Law has been substantially amended in 2017, 2021, and 2023. Key amendments include the introduction of venture capital companies (Articles 6 and 7), the strengthening of corporate governance requirements for public shareholding companies (Articles 143–152), reforms relating to non-profit companies (Article 7), the digitalization of corporate filings and meetings through electronic procedures (Article 6), modifications to the governance of limited liability companies (Article 66).