3. Content
• First: The legal jurisdiction of the Egyptian commercial law.
• Second: Commercial business in the Egyptian trade law.
• Third: Who is the trader?
• Fourth: The conditions for doing commercial business.
4. • Law No. 17 of 1999 is the commercial law in force in Egypt, and this
law has been in force since October 1, 1999, and the following is a
presentation of the main topics and provisions of this law.
• First: The legal mandate of the Egyptian Trade Act:
• Legal mandate/jurisdiction means the scope of application of this
Law, and Article 1 of the Trade law (Law No. 17 of 1999) has
established the legal jurisdiction so that its provisions apply to
transactions or commercial businesses/activities, and its provisions
apply to any natural or legal person who has been proven to be a trader.
5. • The first paragraph of Article II also provided for the authority of any
agreement between contractors on the commercial transactions
contained in the agreement, if there is no agreement - the provisions of
the Trade Act or other laws relating to commercial transactions
and then the rules of commercial usages and customs, if there is no
usage or business custom, the provisions of the Civil Code must be
applied.
Article 2
6. • The second paragraph of Article II also stipulated that
agreements between contractors, rules of commercial usages or
customs can not be applied when they conflict with public order
in Egypt, and Article 3 of this law stipulated that if the contract
was commercial for one of its parties - the provisions of the
commercial law would apply only to the obligations of that party
alone and to the obligations of the other party to the provisions of
the civil law - unless the law provided otherwise.
Article 2 & 3
7. • Articles 4-9 of the Trade Law included a detailed account of the nature
of the commercial businesses/activities subject to this law and
explained the following:
• It is considered a commercial activity to purchase movables -whatever
their kind- with the aim of (intention) selling or renting (leasing) them as
they are, or after shaping them in another form.
• Renting movables with the aim of leasing them, and also leasing these
movables.
• Founding trading firms (establishing commercial companies).
8. • The following are considered commercial activities if they are
professionally exercised: supply of goods and services, industry,
land transport and shipping, commercial agencies and brokerage,
insurance of all kinds, banking and exchange operations,
publishing, printing, photography, radio and television operations.
Commercial activities
9. • The press, mail, telecommunications and advertising, computer
software, satellite broadcasting and extractive processes of
natural resources such as mines & quarries and oil & gas
sources.
• Poultry, livestock and other projects for sale, contracting for the
construction, purchase or rental of real estate for profit, tourism
and export & import offices, hotels, restaurants, coffee shops,
cinemas and public amusement.
Commercial activities
10. • Art.6: States that it is considered also a commercial activity:
businesses (all works) connected with commercial navigation, whether
air or sea, such as the construction, repair, and maintenance of ships
or aircraft, purchase, sale, rent or lease of ships or aircraft, maritime
and air transport, cargo and unloading operations…etc.
• Art.7: stipulates that all works can be measured on (analogously to)
the works mentioned in the previous articles (due to likeness in qualities and
purposes) shall be considered a commercial work.
11. • Art.8: Works that are carried out by the trader for business affairs
connected with his trade shall be considered commercial works. All
work carried out by the trader shall be considered related to his trade,
unless otherwise established
• Art.9: stipulates that "it is not a commercial work” to sell the land
products that farmers cultivate, whether they are the owner or mere
beneficiary of the land.
12. • With regard to the legal status of individual business activity, many
commercial legal systems have added commercial status to a range of
business activities, even if they occur once, regardless of the operator, as
a trader or a non-trader; the Egyptian trade law has required
professionalism as a condition for considering any activity or operation as
commercial activity when it singles out in Article 5 the types of businesses.
• However, Article IV (4) expressly stipulates that the purchase of movables
for the purpose of sale or lease on their own or after reconfiguring them in
another form is considered as commercial activities…. and did not
differentiate between individual business activity and other commercial
activities carried on by professionals.
• Egyptian commercial legal system= Subjective + Objective theories
Even once!!!
13. • Based on the above, the Egyptian Trade Act has placed the purchase
of movables for the purpose of selling at the forefront of the business
and has not differentiated whether the activity has been done once or
professionally, but the text of Article 4 of the Law mentioned that "is
considered a commercial activity for the purpose of selling or renting it
in its case or after re-establishing it" confirmed the need for three
conditions for the business to acquire commercial status, namely that
there should be a purchase, and that the purchase is carried out, and
that such purchase should be carried out in order to resell for profit.
Conditions…
14. Conditions…
• The first condition is that there should be a purchase:
buying means to gain ownership of something whether it is
in cash as in the sales contract or in-kind as in the barter
contract, and therefore whoever sells something that he
has never bought such as who has acquired ownership
through inheritance, give-and-take is considered to be a
civil act.
15. Conditions…
• The second condition is that the purchased item must be
movable.
• The movables can be in material/tangible form (goods,
cars,…etc.) or moral/intangible such as securities
(trademark, stocks, and bonds…etc.).
• Therefore, the transactions of selling land and real estate
shall be subjected to the provisions of the civil or real
estate law, because it is immovable and carried out once.
16. • However, some have interpreted the provision as a business activity to
buy a house with the intention of demolishing it and selling its ruins even if
it is done once; because the ruins of the house here have been converted
into a movable item, as well as the purchase of trees in order to cut and
sell them as timber, but if the purchase of immovable (land and real estate)
is carried out professionally, they are of course subject to the Egyptian
trade law under the provisions of Article 5.
• Based on this condition, certain important activities are excluded from the
scope of commercial law, such as Intellectual production, where the
exploitation of the fruits of thought and innovation is not considered as
business, for example, the author sells his work.
Conditions…
17. Conditions…
• Third condition: intention
• whoever buys a movable with the intention of using it or
retaining it, and then amends his opinion and sells it, is
considered civil, even if he makes a profit for the absence
of the intention to sell at the time of the purchase.
• In contrast, it is considered to be a purchase of commercial
movable when it is done with the intention of resale, even if
it is then amended, which he consumes or retains for
himself.
18. Conditions…
• It is not required to sell under the same condition, as the
item can be converted or manufactured before the resold,
such as buying grain> converting it to flour, buying cotton>
converting it to cloths.
• Also, it’s permissible to sell first and then to buy, but this is
a familiar situation in trade, especially in the stock
exchange.
19. Who is the trader?
• Articles from 10-20 stipulates that the merchant is all
professionally engaged in his or her name and account of a
commercial business, or any company that takes one of the
forms stipulated in the laws relating to companies, whatever the
purpose for which the company was established.
• Art.16: exempts small craftsman from the provisions of the
commercial law; and explained that the small craftsman
exercising a trade of insignificant costs to obtain an amount of
income securing his daily sustenance and shall be considered
the owner of a small craft.
20. Fourth :The conditions for doing commerce business
• Articles 11-20 of the Egyptian commercial law specified the
conditions for people to trade.
• As article 11 assured that would be able to practice trade,
whoever reaches the ages 21 whether this person is an
Egyptian or a foreigner.
• And in Egypt if someone reaches 18 years old could be a
trader but only after he gets a permission from a
specialized court.
21. …
• The competent court makes the necessary decisions concerning
minor individuals who have funds in a particular trade, and all
court decisions must be recorded in the commercial register by
law.
• The law also regulates the eligibility of married women and
foreign women; article 14 of the Egyptian Commercial Act
stipulates that a foreign wife who is a trader is supposed to
exercise it with her husband's permission, and the husband may
object to his wife's business practice, provided that such
objection should be registered in the commercial register.
