Kuwait Court of Cassation principle number 1499

A member of the company's board of directors. Must own a number of its shares to be deposited, within one month from - 261 - Commercial the date of his appointment, with an approved bank, without their being negotiable until his membership ends. His failure to provide this security. Invalidates his membership. The reason therefor: the member's proper management of the business entrusted to him and non-abuse of the company's funds. - Transfer of shares to another. Its effect. The shareholder loses his status as a partner. - Shares in joint-stock companies. Their negotiability by commercial methods without following the procedures for assignment of rights. The consequence thereof. The shareholder may transfer his shares to another who succeeds to the rights and obligations, and this disposition may not be invoked against the company except from the date of its entry in the register of shareholders maintained by the company.