Introduction
This article explains corporate governance in Syria. Corporate governance is often mistaken for a policy manual used only by large listed companies. In practice, governance begins with a simpler question: who is legally entitled to decide, sign, supervise and challenge each important company action? A two-partner limited liability company needs a clear answer just as much as a public joint-stock company does.
Weak governance usually becomes visible when the company is already under pressure. A manager signs beyond an internal limit; a founder uses company money as personal money; a board approves a related-party contract without disclosure; annual accounts are not prepared on time; a shareholder meeting is called incorrectly; or an investor discovers that a veto right in a shareholders’ agreement was never reflected in the company’s constitutional documents or signing rules.
This guide explains the governance architecture created by Syrian Companies Law, Legislative Decree No. 29 of 2011, with particular attention to limited liability companies and joint-stock companies.[1][2] It also provides a practical system for authority, conflicts, minutes, risk management and legal compliance. It does not replace a review of the company’s registered documents, sector licence, shareholder arrangements or current administrative requirements.
Quick answer
Corporate governance in Syria is not one universal code for every business. It is a combination of the Companies Law, the company’s memorandum or articles, registered managers and signatories, shareholder or general-assembly resolutions, board procedures, financial and audit controls, and any securities-market or sector-specific rules.
For an LLC, one or more managers run the business within the law, the articles and the powers reserved to the general assembly. For a joint-stock company, the board has broad authority within the company’s objects, while shareholders retain statutory rights and ordinary or extraordinary general assemblies decide reserved matters. In both structures, managers and board members may face liability for breaches of law, the articles, assembly resolutions or their management duties. Good governance therefore requires correct authority and reliable evidence that the authority was exercised properly.
Why corporate governance matters in Syria in 2026
Governance turns ownership into lawful decision-making. It determines who can open or close a branch, appoint executives, borrow, grant security, sell a major asset, approve a conflict transaction, distribute profit, change a signatory, amend the articles or pursue a claim. If this allocation is unclear, a company may have a commercially sensible decision but no valid approval path.
It also protects continuity. Founder-led and family companies are vulnerable when knowledge and authority are concentrated in one person. Foreign investors face a different risk: the commercial bargain may sit in a shareholders’ agreement while the registered articles and signature authorities say something else. Lenders, buyers and counterparties will examine the official record and the company’s approval evidence, not only the parties’ intentions.
The transition in Syria makes disciplined records especially valuable. The core Companies Law remains Legislative Decree No. 29 of 2011 in the published legal sources reviewed for this article.[1][2] Administrative arrangements and sector rules may nevertheless change. A company should maintain a current governance file and verify procedural requirements at the time of each material action rather than relying on an old template.
The legal framework for corporate governance
The Companies Law is the starting point
Legislative Decree No. 29 of 2011 regulates company forms, registration, management bodies, general assemblies, shareholder rights, audit, liability and dissolution. Its rules differ by legal form. An LLC manager is not simply a smaller version of a joint-stock-company board, and a private joint-stock company is not exempt from the statutory governance provisions that apply to its form.[1]
The company’s articles operate within that framework. They can allocate and limit powers where the law allows, set higher voting or quorum requirements in defined cases, regulate representation and establish procedures suitable for the business. They cannot remove mandatory statutory rights or validate conduct that the law prohibits.
Public and listed companies have an additional layer
Public joint-stock companies, and companies whose securities are listed or traded, are also subject to the rules and instructions of the Syrian Commission on Financial Markets and Securities and the Damascus Securities Exchange. The Commission identifies Decision No. 31/M of 29 June 2008 as the corporate-governance rules for joint-stock companies and has required relevant issuers to submit governance reporting.[3] The Exchange separately publishes listing, disclosure and market instructions and current company disclosures.[4]
This means a public or listed company should not use this general guide as its only checklist. Its board must map Companies Law duties against the currently applicable governance, disclosure, listing and sector rules. Banks, insurers and other regulated businesses may also have additional requirements imposed by their competent regulator.
Contracts, resolutions and the registry complete the framework
The governance system is not contained in one document. It includes the memorandum or articles, shareholders’ agreement, board or manager regulations, delegations, signature authorities, committee charters, policies, minutes and commercial-registry entries.
Article 3 requires changes to the articles and to specified registered information to be registered within 30 days, and provides that an amendment is effective against third parties only from publication. Articles 7 and 8 make registry information accessible and require the registration certificate to identify managers or board members, authorized signatories, their terms and powers, and restrictions on management or signature authority.[1] Governance must therefore be correct inside the company and accurately reflected outside it.
Governance of a limited liability company
Appointment, term and powers of the manager
An LLC is managed by one or more managers. Article 67 generally caps the number at five, with up to seven where the company has more than 25 partners. The articles may establish a council of managers, in which case specified joint-stock-company board rules apply. A manager’s term is set by the articles and may not exceed four years, although it may be renewed.[1]
Unless the articles limit the manager, the manager has the powers needed to manage the company. That broad wording should not be treated as unlimited permission. The manager remains bound by the company’s objects, the law, the articles and general-assembly decisions. Powers assigned by the general assembly cannot be delegated to another person without that body’s approval.
The articles should say clearly whether managers sign individually or jointly; who can use banking facilities; and which contracts, payments, guarantees, asset disposals, hiring decisions and settlements need additional approval. An operational delegation should identify the exact power, financial limit, duration, reporting duty and whether sub-delegation is prohibited.
Manager duties, reporting and confidentiality
Article 68 requires the manager to follow general-assembly directions and decisions. Within the first five months of each financial year, the manager must prepare a report on the previous year and future work plan, together with annual financial statements, profit and loss account and cash-flow information certified by the auditor. The manager must obtain general-assembly approval for an act outside the authority granted by the articles.[1]
The same article imposes a confidentiality duty over non-public company information obtained through the position. Confidentiality should be supported by access controls, document-retention rules and a process for authorized disclosure. It should not be used to block partners from exercising statutory information rights.
General assembly and reserved matters
The annual general assembly must be held within the first six months of the financial year. Its agenda includes the manager’s report and future plan, financial statements and auditor’s report, appointment of the auditor, election of managers when required and possible discharge of the managers.[1]
The meeting notice must normally be issued at least 14 days before the meeting and include the agenda and required documents. Partners holding at least 10% of the shares may require a meeting on specified matters. A partner may also request that a matter be added to the agenda if the request reaches the company within the statutory period.
Voting, minutes and minority protection
Every partner may attend and vote, with one vote for each share. Unless the articles require more, ordinary decisions require more than 50% of the capital represented at the meeting. Amendments, merger, dissolution or conversion require 75% of the represented shares, with the approving majority not falling below half of the company’s capital.[1]
The company must keep an attendance list and a special register of general-assembly minutes and resolutions. Partners may inspect the minutes, annual report and financial statements and obtain certified copies. A partner may challenge a resolution that violates the law or articles within the statutory 90-day period. These rights make accurate notice, agenda, quorum, voting and minutes essential - not clerical formalities.
Governance of a joint-stock company
Board authority and its limits
Article 145 gives the board broad authority to carry out acts required to operate the company within its objects, subject to the law and the articles. The board must follow general-assembly directions. The articles should define the conditions and limits for borrowing, selling or mortgaging company assets, disposing of projects or concessions and giving guarantees.[1]
The board should reserve strategic matters to itself and prevent ordinary delegations from becoming an uncontrolled transfer of responsibility. A reserved-matters schedule commonly covers strategy and budgets, material financing, major capital expenditure, guarantees, acquisitions and disposals, litigation settlements, related-party transactions, appointment of senior executives and changes to policies or internal controls.
Delegation, executive management and signature authority
The board may distribute work among its members and delegate a specific task or the supervision of an activity to one or more members or a committee. It may appoint executive managers and authorize them to sign individually or jointly within the scope of the board’s decision. Delegation should distinguish decision authority from execution, supervision and signature.
Changes to the chair, deputy chair, executive managers, authorized signatories or their powers must be notified through the required registration process. A signature card at a bank should not contradict the board resolution, articles or public registry.
Board meetings, minutes and recorded dissent
The board meets on written invitation from its chair or deputy. At least one quarter of the members may request a meeting and, if no invitation is issued within seven days, those members may call it. The articles must regulate meeting conditions and timing, but the board must meet at least once every three months. Electronic meetings are possible if the articles allow them.[1]
A board meeting is valid with a majority of members unless the articles require more; decisions are made by a majority of those present and represented unless a higher threshold applies. Minutes must be recorded in a special sequential register and signed by the chair and attending members. A dissenting member should record the decision opposed and the reasons before signing the minutes. A vague note such as “I disagree” is weaker than a precise objection supported by the information considered.
Shareholder assemblies and information rights
The ordinary general assembly meets at least annually within four months after the financial year end. Shareholders holding at least 10% may request an ordinary meeting. Those holding at least 25% may request an extraordinary meeting. Ordinary resolutions generally require more than 50% of the shares represented, while extraordinary resolutions require at least two thirds of represented shares, subject to the additional capital threshold for amendment, merger or dissolution.[1]
Article 120 gives shareholders rights including participation in general assemblies, access to company books, receipt of the balance sheet, profit-and-loss account, board report and auditor’s report, challenge of unlawful resolutions, and requests for meetings and agenda additions under the statutory conditions. Governance procedures must make these rights usable in practice.
A practical authority matrix
| Decision | Management role | Owner or assembly control | Evidence to retain |
|---|---|---|---|
| Routine contract within approved budget | Manager or authorized executive within written limit | Periodic reporting | Signed contract, delegation and budget reference |
| Borrowing, security or guarantee | Manager or board only within the articles and approved limits | Assembly approval where reserved or limit exceeded | Resolution, finance paper, conflict check and registry evidence if relevant |
| Major asset or project disposal | Board or manager prepares and recommends | Assembly approval where required by law or articles | Valuation, disclosure, resolution and transfer documents |
| Related-party transaction | Unconflicted decision-makers evaluate terms | Required authorization and annual renewal where applicable | Interest declaration, market evidence, abstention and approval |
| Appointment or removal of senior management | Board for joint-stock executives; proper LLC body for its manager structure | Assembly elects or removes statutory officeholders where applicable | Appointment terms, resolution, acceptance and registry filing |
| Dividend or profit distribution | Management prepares accurate accounts and proposal | Competent assembly decides after audit and loss review | Audited accounts, auditor report and assembly resolution |
| Amendment, merger, conversion or dissolution | Management prepares proposal and implementation plan | Required extraordinary or enhanced majority | Notice, explanatory paper, minutes, approval and publication |
Why the matrix matters
An authority matrix converts the law and articles into an operating control. It should never create a power that the competent body does not possess. It should be reconciled with bank mandates, procurement rules, employment authority, digital approvals, powers of attorney and registry entries.
The matrix should also separate approval from signature. A person may be permitted to sign a document only after the board or assembly has approved the underlying decision. Conversely, a properly approved decision may still fail operationally if the person signing lacks valid authority.
Conflicts of interest and related-party transactions
Rules for LLC managers
Article 70 restricts an LLC manager from managing a competing or similar business, or conducting competing trade, without general-assembly approval. A manager may not hold a direct or indirect interest in company contracts or projects unless the general assembly grants authorization, which must be renewed annually. The manager is also restricted from obtaining company loans or guarantees for the manager or relatives within the statutory scope.[1]
A transaction should not be divided, routed through another person or labelled “ordinary” to avoid the rule. The company should identify the real beneficiary and economic interest.
Rules for joint-stock-company directors
Article 152 similarly requires general-assembly authorization where a board member or company representative has a direct or indirect interest in a company contract or project, with annual renewal for long-term commitments. It restricts competing positions or trade without renewable authorization and extends the relevant controls to relatives within the stated degree. It also prohibits misuse of non-public information and market manipulation.[1]
Separate securities, banking or sector rules may demand more extensive disclosure or approval. A public or listed company should apply the strictest applicable standard.
A workable conflict procedure
A conflict policy should require directors, managers and key executives to disclose interests on appointment, annually and whenever circumstances change. Before a decision, the secretary or legal function should circulate a conflict question, identify the approving body and record whether the interested person received papers, participated in discussion or voted.
The decision file should include the disclosure, relationship, commercial rationale, comparison with market terms, valuation or independent advice where material, abstention, approval and ongoing monitoring. Authorization does not make an unfair transaction fair; decision-makers must still act within their duties and protect the company.
Manager and board-member liability
Main bases of liability
Under Articles 69 and 153, LLC managers and joint-stock-company board members or representatives may be liable for violations of law, the company’s articles and general-assembly decisions, and for management error. Depending on the circumstances, liability may be individual, joint or joint and several and may be owed to the company, partners or shareholders, third parties and relevant authorities.[1]
The statutory test requires those seeking to resist liability to show that they exercised the care of a paid agent. A title alone is therefore not a defence. The file should demonstrate that the decision-maker was informed, considered alternatives, disclosed conflicts, stayed within authority and monitored implementation.
Written dissent is a substantive protection
Both the LLC and joint-stock provisions recognize the significance of a written objection recorded in the minutes of the meeting that adopted the unlawful or erroneous decision. For directors, Article 158 further requires the dissenting member to record the reason before signing the minutes.[1]
Absence, silence or a later email may not provide the same protection. A director or manager who objects should ask that the minutes state the proposal, material information, vote, exact objection and reason, then verify the final signed record.
Discharge and limitation periods require care
A joint-stock-company general assembly may discharge the board and company representatives, but Article 155 limits the effect of discharge to matters the assembly could know after presentation of the board report, final accounts and auditor’s report. It does not safely erase concealed misconduct.[1]
The Companies Law contains a general three-year period for the management-liability actions described in the relevant provisions, calculated from the assembly meeting at which account of management was given, with exceptions for intentional acts, concealed matters and criminal conduct. Limitation analysis is fact-specific. A company or shareholder should obtain advice promptly rather than assume that an approval or passage of time has ended the risk.
Financial governance, audit and distributions
Annual reporting and auditor independence
Financial governance starts with reliable books, separation of company and personal funds, an approval trail and timely reconciliation. The LLC manager and joint-stock board must prepare the reports and financial statements required for their form. Joint-stock-company accounts must be organized and audited under applicable accounting and auditing standards.[1]
The auditor has inspection and reporting rights and must report material violations and obstacles. For a joint-stock company, failure to present or read the auditor’s report can invalidate the assembly’s approval of accounts and profit distribution. The company should protect auditor access and independence rather than treating the audit as a signature exercise.
Loss triggers, reserves and lawful distributions
For an LLC, if losses exceed half the capital, management must call the general assembly to decide whether to cover the losses, reduce capital or dissolve. Ignoring the trigger exposes the company and management to greater risk.[1]
A joint-stock company must allocate 10% of annual net profits to the mandatory reserve until it reaches one quarter of capital, subject to the statutory option to continue. It may not distribute profit before accumulated losses from previous years are covered. A dividend requires competent assembly approval based on accurate accounts; cash availability alone does not make a distribution lawful.
Registry publication and third-party authority
Changes that require prompt action
The company should review registration whenever it changes a manager, board composition, chair, executive manager, signatory, term, power or restriction; amends its articles; or adopts another matter the law requires to be publicized. Article 3 sets a 30-day registration period for changes to the articles and the Article 8 information.[1]
A signed internal resolution is not always the end of the process. The governance calendar should assign a person to file, follow up, obtain updated evidence and circulate it to banks and business teams.
Internal limits and external effectiveness are different questions
Internal authority asks whether the company approved an act correctly. External authority asks whether the company can rely on a restriction against a third party. The Companies Law links the effect of certain registered restrictions to registry publication and, in relevant provisions, to reference to the company’s registry number in the transaction.[1]
This is why hidden approval limits are dangerous. If a company wants a material limit to protect it externally, counsel should assess whether and how it can be reflected in the articles, registry and contracting process. At minimum, contracts should identify the company correctly, reference its registration and be signed in the registered manner.
Governance for founder-led and family businesses
Separate ownership, management and personal interests
Founder control can make decisions fast, but it can also blur roles. The company should distinguish shareholder decisions from manager decisions, company funds from family funds, employment remuneration from profit distributions, and company assets from assets merely used by the business.
The governance system should cover related-party leases, shareholder loans, family employment, reimbursement, procurement from connected businesses and use of company property. Written rules protect the founder as well as minority partners because they create a defensible record of why value moved.
Plan for absence, incapacity, death and succession
If only one person can sign, access bank accounts, approve payroll or explain customer obligations, the company has a continuity risk. The articles, delegations, bank mandates and succession plan should work together if that person becomes unavailable.
Partners should review share-transfer restrictions, inheritance consequences, pre-emption rights, valuation, management succession, temporary authority and dispute mechanisms. A private family understanding that conflicts with the registered company framework can be difficult to enforce when it matters most.
Governance for foreign investors and joint ventures
Reserved matters, vetoes and information rights
A joint venture should translate its commercial bargain into lawful corporate mechanisms. Reserved matters may include new shares, borrowing, budgets, material contracts, appointment of executives, related-party transactions, business-plan changes, asset sales, litigation settlements and distributions.
Vetoes must be tested against mandatory law, the company form, quorum rules and the risk of deadlock. A shareholders’ agreement should not promise a result that the registered articles or competent company body cannot lawfully deliver.
Bilingual records, deadlock and exit
Where participants use different languages, the documents should state which version governs and use consistent defined terms. Notices, meeting packs, minutes and powers of attorney should be prepared early enough for informed participation, not translated after the decision.
Deadlock provisions should distinguish an operational disagreement from a fundamental reserved-matter impasse. Escalation, mediation, expert determination, buy-sell arrangements, transfer restrictions and arbitration or court jurisdiction must be drafted as one coherent system. Syrian Companies Law preserves the parties’ right to agree local or international arbitration for relevant civil and commercial disputes, but the clause must fit the transaction and the relief likely to be required.[1][8]
Core governance documents checklist
Current memorandum or articles and every approved amendment.
Recent commercial-registration certificate and evidence of published managers, directors, signatories and restrictions.
Shareholders’ agreement or family constitution reconciled with mandatory law and the articles.
Board, manager and general-assembly regulations, including notice, agenda, quorum, voting and minute rules.
Reserved-matters schedule and authority matrix with financial thresholds.
Current delegations, powers of attorney, bank mandates and digital approval permissions.
Conflict-of-interest, related-party transaction, gifts and confidentiality policies.
Register of directors, managers, shareholders or partners and their declared interests.
Sequential signed minutes and attendance records for every competent body.
Annual budget, business plan, management report, financial statements and auditor communications.
Compliance calendar covering corporate, tax, employment, licensing, regulatory and contract deadlines.
Risk register, incident-escalation procedure, document-retention policy and business-continuity plan.
Annual corporate-governance calendar
| Timing | Required or recommended action | Responsible owner | Evidence |
|---|---|---|---|
| Start of financial year | Confirm board, manager, signatory, interest and registry information | Company secretary or legal function | Signed declarations and registry comparison |
| Monthly or quarterly | Review budget, cash, major contracts, disputes, licences and risk register | Management and board or managers’ council | Management pack and signed minutes |
| At least every three months for a JSC board | Hold the statutory minimum board meeting and track actions | Board chair and secretary | Notice, papers, attendance, minutes and action log |
| Before the annual assembly | Prepare management or board report, plan, financial statements and auditor materials | Manager or board with finance | Final meeting pack and auditor report |
| Within first four months after year end for a JSC | Hold the ordinary annual general assembly | Board and company secretary | Publication or notice, quorum record and certified minutes |
| Within first six months of the year for an LLC | Hold the LLC annual general assembly | Manager | Notice, documents, attendance and minutes |
| Within 30 days of a registrable change | File and publish the amendment or Article 8 information | Legal or authorized representative | Filing receipt and updated certificate |
| On every material transaction | Test authority, conflicts, licensing, sanctions and approvals | Deal owner, finance and legal | Approval checklist and closing file |
Common governance warning signs
One person signs every document without a written limit or review.
The commercial registry, articles, bank mandate and actual practice identify different signatories.
Board or assembly minutes are prepared months later or record only the final decision.
Meeting papers do not disclose financial impact, alternatives or conflicts.
Partners use company accounts for personal payments without documented legal basis.
A related-party contract is repeatedly renewed without fresh authorization or market comparison.
The company has no current list of powers of attorney, delegations or revoked authorities.
Annual accounts, auditor reports or shareholder meetings are chronically late.
A shareholder agreement contains vetoes or transfer rights absent from the registered framework.
The same person proposes, approves, signs, pays and reconciles a high-risk transaction.
Losses, litigation, licence breaches or regulatory notices are kept from the board or owners.
Dissent is expressed informally but not recorded in the signed minutes.
A 30-day governance improvement plan
Collect the articles, registry certificate, shareholder records, latest minutes, powers and bank mandates.
Compare the registered signatories and restrictions with actual contracting and payment practice.
Build a list of decisions reserved by law, the articles, owners and the board.
Create one authority matrix covering approval, signature, payment and reporting limits.
Obtain and update manager, director and key-executive conflict declarations.
Review the last twelve months of related-party transactions and undocumented shareholder withdrawals.
Establish standard notice, agenda, paper, minutes, dissent and action-log templates.
Create a compliance calendar for meetings, accounts, audit, licences, filings and material contracts.
Record the ten most significant legal and operational risks, an owner and a mitigation deadline for each.
Approve the framework through the competent company bodies and register every change that requires publication.
Legal notice
This article provides general information on the Syrian legal framework as reviewed on 8 September 2026. It is not legal advice and does not cover every company form, regulated sector, securities requirement, tax rule, licence, sanctions issue, constitutional document or factual situation. Laws, regulatory instructions and administrative practice may change. The company’s registered documents and current requirements of the competent Syrian authorities must be reviewed by licensed Syrian counsel before action is taken.
Official source: Syrian Ministry of Justice
