Types of Commercial Companies in Libyan Law: From Joint Stock Companies to Limited Liability Companies

Abstract

This study examines the legal framework governing commercial companies under Libyan law, with a particular focus on Joint Stock Companies (JSCs) and Limited Liability Companies (LLCs) as the most significant forms of capital companies. The research analyzes the key differences between these two structures, including the nature of capital, the principle of limited liability, governance mechanisms, financing methods, and levels of legal oversight and disclosure. The study highlights that Joint Stock Companies represent the most advanced legal form for raising substantial capital through public subscription and are permitted to engage in public trust activities such as banking and insurance, subject to strict regulatory and administrative controls. In contrast, Limited Liability Companies are hybrid entities that combine financial protection for partners with certain personal characteristics, such as limits on the number of partners and non-transferable shares, making them suitable for small and medium-sized enterprises. The research also discusses the challenges faced by investors in choosing between these two models and examines their implications for investment attraction, governance requirements, and economic growth. The findings underscore the need to modernize corporate legislation to enhance Libya’s investment environment.