Criminal liability in Kuwait: what sanctions can be imposed for breach of company law?

Law firm Salah Alghanim is pleased to publish this briefing on the criminal liability that can be imposed in Kuwait for breach of Kuwait Companies Law No.1 of 2016 (the KCL 2016).

In short, the relevant penalties that can be imposed vary between imprisonment (of up to three years), financial penalties (of up to to 100,000 dinars) and/or other sanctions (such as dismissal of a partner). The Public Prosecution is designated as the competent authority for enforcing the above penalties.

A summary of the key types of behavior that can result in criminal liability for breach of the KCL 2016 are as follows:

• Evidence of (i) bad faith in any public documentation published by the company and/or (ii) dissemination of false or misleading statements by any person.

• Where assets exchanged for shares in the company have been valued higher than their actual value.

• A director, manager, auditor or liquidator preparing false or misleading financial statements.

• Preventing a director, manager or shareholder from participating in a general meeting of the company.

• Exploitation by a board member, manager or liquidator of the company's assets to achieve personal benefits for themselves or others.

For any legal advice, please contact me via email : info@alghanim.law