Bahrain Commercial Companies Law: 2025 amendments
Decree-Law No. 38 of 2025 expands accountability to de facto managers, enables electronic meetings by default and changes the available company and joint-venture architecture.
The previous article described the 2020 reform as "new". That reform remains part of Bahrain's corporate framework, but it is no longer the latest development. The current update is Decree-Law No. 38 of 2025, which amended the Commercial Companies Law issued under Decree-Law No. 21 of 2001.
The 2025 reform is relevant beyond listed companies. W.L.L. managers, people exercising management without a formal title, closed joint stock companies, partnerships and contractual joint-venture structures all need to understand the practical effect.
Structural reform
SPC integration, W.L.L. flexibility and wider changes to company types and governance.
Accountability and digital governance
De facto management, remote meetings, B.S.C.(c) flexibility and removal of the association in participation form.
Implementation
Companies should align authority, meeting procedures, records and legacy structures with the amended law.
Six changes that matter
De facto managers enter the liability framework
Personal liability can extend to a person effectively managing the company, openly or behind the scenes, where the legal requirements for liability are established.
Business impact: informal control by a shareholder, group executive or adviser should not bypass documented authority and oversight.Electronic meetings become generally available
Meetings under the Companies Law may be held through electronic or telephone communication if identity, participation and voting safeguards are satisfied.
Business impact: companies can operate remotely, but need a reliable meeting protocol and evidence trail.Electronic voting is recognised
A company may adopt electronic voting subject to the conditions and controls issued by the Minister responsible for commerce.
Business impact: voting systems should preserve voter identity, authority, vote integrity and retrievable records.Single-owner B.S.C.(c) becomes possible
A closed joint stock company may be established by one natural or legal person, subject to ministerial conditions. That person holds the powers of the constituent and general assemblies.
Business impact: this may create a new structuring option, but implementation conditions must be checked before relying on it.Longer continuity period for partnerships
Where the MOA has no continuation provision, the remaining partners may unanimously decide within 90 working days to continue after withdrawal, death, interdiction, bankruptcy or insolvency.
Business impact: continuity still requires a decision and Commercial Registry publication to be effective against third parties.Association in participation is removed
The former unincorporated joint-venture company form was removed from the Companies Law. Existing arrangements were given a three-month period to regularise their status.
Business impact: legacy structures should already have been reviewed; contractual collaborations still need an appropriate legal and registration analysis.Personal liability now follows actual management
The amended Article 18 bis focuses on a manager, board member or member of a managers' board, together with a person effectively managing the company whether visibly or covertly. Liability may be personal, or joint and several where multiple people committed the relevant violation.
The provision applies where evidence establishes that the person caused obligations to be imposed on the company because of negligence, gross error, or violation of law, the Memorandum of Association or Articles of Association. This is not automatic liability for every failed business decision; the facts, conduct, causation and legal test matter.
Registered manager
Formally recorded as managing or representing the company.
Board member
Participates in collective governance and company decisions.
De facto manager
Exercises real management influence without relying on the formal title.
Article 18 bis also addresses decisions taken at board, managers', constituent or general assembly meetings. A person should not assume that a collective resolution automatically removes individual exposure. The article specifically addresses recorded objection and the limited circumstances in which absence may be relevant.
Remote meetings need more than a video link
Article 23 bis permits meetings through electronic or telephone communication. The company must still protect the legal quality of the meeting. The amended law identifies four control areas.
Verify
Confirm each participant and the validity of any proxy used to attend.
Enable
Allow full participation, awareness of proceedings and the ability to express views.
Capture
Correctly record statements and votes made by participants during the meeting.
Comply
Apply any additional measures issued by the Minister responsible for commerce.
Update notices, proxy forms, chair scripts, attendance records and minutes. The minutes should identify the communication method, verification process, attendees, quorum, connection issues, decisions and vote results. If a participant loses access during a material discussion, record how the chair handled the issue.
Single-owner closed joint stock companies
Article 226 retains the normal structure of at least two persons subscribing for negotiable shares that are not offered to the public. It also allows establishment by one natural or legal person, subject to conditions and controls issued by the Minister responsible for commerce.
This does not mean every investor should convert a W.L.L. into a B.S.C.(c). Compare capital, governance, audit, share classes, financing, regulatory requirements and future investor plans. Confirm the implementing conditions and current Sijilat practice before selecting the structure.
Removal of the association in participation form
The reform repealed the statutory company form commonly translated as an association in participation or unincorporated joint-venture company. The three-month transition period for pre-existing structures has expired.
Businesses should identify any legacy arrangement that relied on the repealed form. A contractual joint venture may still be commercially possible, but its registration, tax, liability, licensing and accounting treatment must be structured under the current framework rather than described as the abolished company type.
Who should do what now?
A practical 30-day governance review
Map authority
List registered and actual managers, board members, signatories, system users and reserved decision-makers.
Review documents
Compare the CR, MOA, board charter, delegations, bank mandates and shareholders' agreement.
Fix procedure
Adopt remote meeting, conflict, approval, minutes, dissent and document-retention protocols.
Close gaps
Prepare amendments, revoke obsolete access, regularise legacy structures and assign owners.
2026 related development: external auditors
Law No. 7 of 2026 amended Bahrain's separate External Auditors Law. It strengthens mechanisms for reviewing audit quality and professional accountability. This is not an amendment to the Commercial Companies Law itself, but it reinforces the direction toward stronger records, audit evidence and regulatory supervision.
Corporate compliance checklist
Questions for the board or partners
- Actual management matches documented authority
- Reserved decisions have an evidence trail
- Conflicts and objections are recorded
- Remote meetings verify identity and proxies
- Electronic votes can be reconstructed
- Inspection documents are accessible
- Legacy joint ventures were regularised
- MOA and CR data remain current
Official sources
The official text of Decree-Law No. 38 of 2025 is published by Bahrain's Legislation and Legal Opinion Commission. Its amendment history lists the changes to the Commercial Companies Law. The Ministry of Industry and Commerce also maintains a corporate legislation library.
Companies reviewing management authority should also read our guides to changing a W.L.L. manager and the Memorandum of Association.
This article provides general corporate information and is not legal advice. The application of the amended law, personal liability, meeting validity, company conversion and legacy joint-venture treatment should be assessed for the specific entity by Bahrain-qualified legal counsel.