Article 222 of Companies Law

Annually, by a resolution issued by the ordinary general assembly upon the proposal of the board of directors, a percentage of not less than ten percent of net profits shall be deducted to establish a mandatory reserve for the company. The assembly may suspend this deduction if the mandatory reserve exceeds half of the company's issued capital. The mandatory reserve may be used only to cover the company's losses or to ensure the distribution of dividends to shareholders at a rate not exceeding five percent of paid-up capital in years in which the company's profits do not permit distribution of this percentage, owing to the absence of a voluntary reserve allowing distribution of this percentage of profits. Amounts deducted from the mandatory reserve must be restored to it when the profits of subsequent years permit, unless this reserve exceeds half of the issued capital. Home Page 1506 Law Index Companies Law Law No. 1 of 2016 Promulgating the Companies Law