The Kingdom of Bahrain previously amended its Commercial Companies Law under Article 226 to allow the establishment of closed joint stock companies (BSC (c)) with a single shareholder, subject to conditions and controls determined by the Minister responsible for commerce affairs. Law No. 38 of 2025, which amended certain provisions of the Commercial Companies Law issued by Decree-Law No. 21 of 2001, came into effect on 8 September 2025. This amendment formally permitted the creation of single-shareholder BSC (c) companies but left the detailed operational and governance requirements to be issued through a ministerial resolution.
Following this legislative amendment, the Ministry of Industry and Commerce (“Ministry”) has now issued Resolution No. 11 of 2026, which provides detailed guidance on the establishment, governance, and compliance requirements for single-shareholder BSC (c) companies (“Resolution”). The Resolution came into effect on 12 March 2026, providing the clarity that investors and companies had been awaiting.
Key Provisions of Resolution No. 11 of 2026:
Establishment and Conversion: A BSC (c) may be newly established by a single shareholder, or an existing BSC (c) may be converted into a single-shareholder company. The constitutional document must follow the Ministry’s published template.
Powers and Compliance: The sole shareholder holds all powers typically exercised by the Founding General Assembly and the General Assembly under the Commercial Companies Law. To maintain regulatory oversight, copies of all shareholder resolutions must be deposited in the Ministry’s electronic system (Sijilat) within fifteen (15) days of issuance. The shareholder is also required to adopt the annual resolutions mandated under Article 206 of the Commercial Companies Law within six (6) months of the company’s financial year-end.
Application of Existing Law: The Resolution confirms that, where specific provisions are not addressed, the standard provisions governing BSC (c) companies under the Commercial Companies Law and its Executive Regulations continue to apply.
Implications for Businesses:
This regulatory development significantly expands options for businesses, institutional investors, and financial service providers seeking a corporate structure that allows sole ownership while retaining the benefits of a BSC (c). The framework simplifies decision-making and governance by consolidating shareholder authority, which can streamline corporate operations, investment structuring, and potential reorganisations. Businesses planning to establish or convert a BSC (c) under this regime should carefully review the procedural requirements, governance obligations, and timeline for compliance to ensure full alignment with the new regulations.
Should you require our assistance in relation to the establishment or conversion of a BSC (c) under this new framework, please do not hesitate to contact Al Tamimi.
Key Contacts
Rad El Treki, Partner, Head of Office - Bahrain, r.eltreki@tamimi.com
Layla Alalawi, Associate, l.alawi@tamimi.com