Commercial Law and Companies
Commercial Law and Companies tests commercial transactions and the legal life of business entities. The Palestinian Companies Law No. 12 of 2017 governs registration, governance and dissolution; commercial law draws on the Jordanian Commercial Law No. 12 of 1966 in the West Bank, with Gaza variations.
Core rules
- Commercial acts include trade, banking, agency, carriage and negotiable instruments.
- A company acquires legal personality on registration; shareholders generally have limited liability.
- LLC and shareholding company rules differ on capital, transfer of shares and management.
- Directors owe duties of loyalty and care; self-dealing requires disclosure and approval.
- Insolvency and liquidation follow statutory priorities; secured creditors rank separately.
Worked example
A director of an LLC signs a supply contract with a company owned by his brother without telling the board. The contract may be voidable by the company because the director breached loyalty and failed to disclose the conflict. The supplier's good faith does not cure the internal breach, but the company must act promptly. The director may be liable for loss. Reasoning: corporate personality protects shareholders, not directors who misuse office.
Traps
Piercing the veil too readily; confusing registration with licensing; missing share-transfer restrictions; treating a company as a partnership.