There are six components to the Moroccan judicial system. The majority of legal matters fall within the jurisdiction of Regional Tribunals, which decide cases of personal property damages. Such judgments, excluding minor offenses punishable by a small fine, may be appealed to the Court of Appeals. The Court of Appeals also has a separate civil and criminal division. Despite previous announcements, the new Commerce Law, passed on May 18, 1996, did not establish special commercial courts. Courts of First Instance adjudicate crimes punishable by up to five years imprisonment and civil, personal status, or commercial cases. Monetary judgments of small amounts are not subject to appeal.
The decisions of all courts and tribunals may be reviewed by the Supreme Court. There is also the High Court of Justice that has jurisdiction over criminal and felonious matters allegedly committed by government officials. In addition, there are specialized Labor Tribunals which settle disputes by means of conciliation.
Business Structures and Forms
Under Moroccan law, the primary types of corporate structures available are: limited liability companies; private limited companies; limited partnerships with shares; general and limited partnerships; and joint-ventures, all of which generally conform to Western company forms of the same nomenclature. The two most widely used are the SA and the SARL, as described below.
Limited Liability Company
Limited liability companies (SA) must have a minimum of five shareholders who can be either legal entities or individuals. As with traditional limited liability companies, the shareholders' liability is limited to the amount of share equity the shareholder hold. Upon incorporation of the limited liability company, a quarter of the equity capital must be paid in advance if paid in cash contributions. If it is paid in contributions in kind, it must be fully paid upon incorporation. Both bearer and registered shares may be issued by the limited liability company. The minimum share value is MD 50. The company has no corporate name but a trade name, and there are generally no restrictions on the sale and transfer of shares to third parties.
Private Limited Company
The private limited company (SARL) is an intermediate type between associations of persons and of capital, bearing resemblance to both partnerships and share companies. It is always a trading company, regardless of its corporate name and its minimum equity capital is MD 10,000. It may be formed by two or more members who are only liable to the amount of their share of the equity capital in the company. Unlike a general partnership, members of a private limited company do not need to be registered merchants. The private limited company must file a memorandum of association as part of its incorporation process. The capital stock has to be fully described and paid up as the company is formed. Stocks shall have the same face value and are not negotiable; they may be transferred only through contracts. "Parts Sociales" may be transferred to third parties outside the company only with the co-associates' consent.
In a general partnership, the partners are jointly and severally liable, without limitation, for the debts of the partnership. Partners may be individuals or corporations, however, they do have to be registered as merchants. There is no restriction on participation by foreign individuals or corporations in general partnerships.
In a limited partnership at least one partner must have unlimited liability while the others have limited liability. A partner whose liability is limited may not take part in the management of the partnership. Limited partnerships are relatively rare in Morocco.
Limited Partnership with Shares
This corporate form is essentially a joint stock company wherein the capital is divided into shares to be held by active and inactive partners. There must be at least one active partner who has unlimited liability with regard to the debts of the entity, and three inactive partners who are liable only to the extent of their shares in the equity capital. The limited partnership with shares is operated by the active partners or by external managers. The governing body is a board of trustees composed of at least three of the inactive partners.
A joint venture does not have a separate legal personality, and its existence is not normally disclosed to third parties, except to the tax authorities. Joint ventures are used for financial syndicates or to undertake specific construction contracts.
The branch affiliate or subsidiary of a foreign corporation is regarded as a separate legal entity. The Moroccan branch, however, has to disclose certain details regarding its parent-company, its representatives and its delegated powers. When registering a branch in Morocco, the foreign parent-company must submit its articles of incorporation along with the incorporation documents of the branch.
Foreigners may establish in Morocco sole proprietorships. In a sole proprietorship, the business is conducted under the responsibility of an individual personally liable for the debts of the business to the extent of all business and personal assets. The business must be registered with the Commerce Registry and with the tax authority.
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