A flexible structure for two or more partners who share ownership and full joint liability. Simple to form, with no minimum capital requirement — but with unlimited personal exposure that every partner must fully understand.
Overview
A General Partnership — known in Bahrain as a Partnership Company — is a business structure consisting of two or more persons operating together under a common name. Each partner acquires the status of a merchant and is considered to be carrying out trade business under the name of the company.
All partners are jointly and personally liable to the full extent of all their funds for the obligations of the company. This is unlimited liability — there is no cap on personal exposure, and creditors may claim against both company assets and the private assets of any partner.
The company name must always be followed by the phrase "a Bahraini Partnership Company" wherever it appears — on invoices, contracts, letterheads, and all official correspondence. This is a legal requirement that cannot be omitted.
"All partners are jointly and personally liable to the extent of all their funds for the obligations of the company."
Before you proceed: Melqart always ensures clients fully understand the unlimited liability implications of a General Partnership. In many cases, a WLL provides the same commercial flexibility with full personal asset protection. We will advise you honestly on which structure is right.
Key Characteristics
The minimum number of partners is two. Sijilat also permits the structure to be owned by a single individual under certain conditions — Melqart will confirm your eligibility.
There is no minimum share capital required to form a General Partnership in Bahrain — making it one of the most cost-effective structures to establish under Bahrain's Commercial Companies Law.
GCC nationals and foreigners are explicitly permitted to own 100% of a General Partnership in Bahrain. No local sponsor or Bahraini partner is required — subject to sector-specific restrictions.
Partners are jointly and severally liable with all their personal funds. Creditors can claim against both company assets and the private assets of any partner — with no cap or limitation whatsoever.
All partners manage the company by default. Alternatively, one or more managers can be appointed via the MOA — from among the partners or from outside — giving full flexibility over the management structure.
A General Partnership is not permitted to engage in banking activities, insurance activities, or the investment of third-party funds. These activities require a different structure and CBB licensing.
Required Documents
The following documents are required by MOIC. Documents not in Arabic or English require a certified Arabic translation before submission.
Note: Public sector employees are not permitted to establish commercial companies or hold administrative positions in them. If the applicant is a director or authorised signatory who is not one of the partners, a Power of Attorney must be provided.
Registration Process
We review your intended activities, advise honestly on ownership structure and liability exposure, and confirm whether a General Partnership is the right vehicle for your specific business — or whether a WLL better suits your needs.
We submit the proposed trade name to MOIC for approval via Sijilat. The name must always be followed by "a Bahraini Partnership Company" wherever it appears — we ensure full compliance from the start.
We draft the Memorandum of Association covering partner shares, profit distribution, management structure, dissolution terms, and partner exit provisions — protecting all parties from day one.
We submit the full application to the Ministry of Industry & Commerce and manage all follow-ups, queries, and approvals — obtaining the Commercial Registration (CR) on your behalf.
Once approved, the Business Licence is issued authorising the partnership to operate in Bahrain under its registered activities. Melqart delivers all documents and guides you on next steps.
We assist with corporate bank account applications across Bahrain's leading commercial banks. All authorised signatories must attend in person after the Active Business Licence is issued and CPR card received.
Ongoing Obligations
All General Partnerships must fulfil these ongoing obligations to maintain good standing with Bahrain's authorities. Melqart tracks and manages every deadline for you.
Identify and register the Ultimate Beneficial Owner in line with Bahrain's corporate governance and transparency requirements.
Submit an Economic Substance Report demonstrating genuine economic activity being conducted in Bahrain as required by the regulatory framework.
Comply with Bahrain's Anti-Money Laundering requirements — maintaining adequate KYC records, partner due diligence, and reporting obligations throughout the life of the partnership.
Retain complete and accurate accounting records and business books for a minimum period of 10 years as required by Bahrain's Commercial Companies Law.
We help you compare all available structures and choose the one that best fits your business goals, activity, and risk tolerance — honestly and without pressure.
Making the Right Choice
The most important comparison any prospective partner should make before committing to a structure. The differences are significant — particularly on liability.
| Feature | General Partnership | WLL Company |
|---|---|---|
| Separate Legal Entity | No | Yes |
| Partner / Shareholder Liability | Unlimited — All Personal Funds | Limited to Share Capital |
| Minimum Partners / Shareholders | 2 (or 1 individual) | 1 to 50 |
| Minimum Capital | None Required | None Required |
| 100% Foreign Ownership | Yes | Yes (most sectors) |
| Banking & Insurance Activities | Not Permitted | Requires CBB Licence |
| Bankruptcy Impact | All Partners Bankrupt | Company Only |
| Annual Audit Required | Not Required | Yes |
| Best Suited For | Professional firms, family businesses, joint ventures with high trust | Trading, services, tech, consulting — most business types |
The liability difference alone makes the WLL the better choice for most investors. If you are unsure which structure fits your business, Melqart will advise you honestly — free of charge.
Learn About WLL →Important to Know
Each partner acquires the status of a merchant and is considered to be carrying out trade business under the name of the company — even if they are not involved in day-to-day management. This applies regardless of how passive their role is.
The bankruptcy of the Partnership Company shall be deemed the bankruptcy of all the partners. All partners' personal assets are fully exposed — this is explicitly stated in Bahrain's Commercial Companies Law and applies regardless of which partner's actions caused the insolvency.
Creditors have a claim on the company's assets and also on the private assets of any partner who was a member at the time of contracting. Any agreement purporting to limit this liability towards third parties is not valid — it cannot be contracted out of.
The company name must be followed wherever it appears by the phrase "a Bahraini Partnership Company." This applies to all letterheads, invoices, contracts, signage, and official correspondence. It is a legal requirement that cannot be omitted under any circumstances.
A General Partnership is not permitted to engage in banking activities, insurance activities, or invest the money of others. These activities require a different company structure and licensing from the Central Bank of Bahrain — Melqart will advise on the appropriate alternative.
A partner may not transfer their share to a third party without the written consent of all other partners, unless the MOA specifically provides otherwise. Any agreement purporting to allow unrestricted share assignment without partner consent is deemed null and void under the Commercial Companies Law.
These rules are drawn directly from Bahrain's Commercial Companies Law (Legislative Decree No. 21 of 2001) and its amendments. Melqart ensures full legal compliance from the moment of incorporation — including MOA drafting that protects all partners with carefully considered exit, management, and dissolution provisions.
General Partnership — Questions & Answers
The General Partnership is one of Bahrain's most misunderstood company structures. The answers below reflect over a decade of advising clients on whether this structure is right — and more often, why it isn't.
A General Partnership — known in Arabic as a Bahraini Partnership Company — is a company formed between two or more persons under a specific commercial name, in which all partners share joint and unlimited personal liability for the company's debts and obligations.
This is the most critical distinction from a WLL: in a General Partnership, your personal assets — your savings, property, and private accounts — are fully exposed to company liabilities. There is no separation between you as an individual and the company as a legal entity.
Under Bahrain's Commercial Companies Law (Decree 21 of 2001, as amended), each partner is treated as a trader operating under the company's commercial name — regardless of how passive their role may be.
Every partner in a General Partnership is jointly and severally liable for all company debts — to the full extent of their personal assets. Not just their capital contribution, but everything they own.
There is a further consequence that is often overlooked: if the company is declared bankrupt, all partners are automatically declared bankrupt as well. This is explicitly stated in Bahrain's Commercial Companies Law and applies regardless of which partner's actions caused the insolvency.
This is why Melqart always advises clients to carefully consider whether the WLL — which provides full limited liability — better serves their needs before proceeding with a General Partnership.
The General Partnership is best suited for professional firms where partners are the primary business asset and personal accountability is part of the value proposition — law firms, accounting practices, medical partnerships, and engineering consultancies.
It also suits businesses where all partners know each other well, have a high level of mutual trust, and where the commercial risk profile is low and manageable.
It is not appropriate for trading businesses with significant commercial risk, businesses with external investors, or any situation where partners cannot accept unlimited personal exposure to each other's decisions.
Following recent amendments to the Commercial Companies Law, the naming rules have been updated. The company name may now be any name acceptable to the Ministry concerned with trade affairs — giving more flexibility in branding compared to the old rules that required partner names.
Regardless of the chosen name, it must always be followed by "a Bahraini Partnership Company" wherever it appears — on letterheads, contracts, invoices, and all official correspondence.
Any person whose name is included in the company name without being a partner remains personally liable to third parties who deal with the company in good faith — a significant legal risk that Melqart flags during every formation consultation.
Yes — non-Bahraini partners can participate in a General Partnership. However, under the Commercial Companies Law, if a non-Bahraini partner is dealing with third parties, they must be sponsored by a Bahraini national in those dealings.
This sponsorship requirement for external dealings is a significant practical constraint for foreign-owned General Partnerships — and one of the key reasons Melqart often advises international investors towards the WLL structure instead.
The specific conditions for non-Bahraini partners are prescribed by ministerial order. Melqart will confirm the current requirements applicable to your specific nationality and business activity before proceeding.
No. There is no minimum share capital requirement for a General Partnership under Bahrain's Commercial Companies Law. The capital is agreed between the partners and stated in the Memorandum of Association.
However — since partners are personally liable for all company debts regardless of capital — the absence of a minimum requirement offers little comfort. The partners' entire personal estates stand behind every company obligation. Melqart recommends serious thought about capital structure and risk exposure before forming a General Partnership.
Unless stated otherwise in the MOA, management is undertaken by all partners collectively. The partners may also appoint one or more managers — from among themselves or externally — in the MOA or through a separate management contract.
A partner who is not a manager cannot interfere in day-to-day management but retains the right to inspect the company's books, obtain a financial summary, and provide advice to management.
Resolutions must be adopted by the unanimous vote of all partners unless the MOA provides for majority voting — a requirement that can create deadlock in partnerships with misaligned partners. Careful MOA drafting from the outset is essential.
Share transfers are heavily restricted. A partner may not assign their share to a third party without the consent of all other partners, or unless the MOA specifically provides for a transfer mechanism. Partners' shares cannot be represented as negotiable instruments.
Any agreement providing for unrestricted assignment of shares without partner consent is deemed null and void under the Commercial Companies Law.
This rigidity is a major practical limitation compared to a WLL. If you anticipate needing to bring in new investors, exit the business, or sell your interest, the WLL is almost certainly the more appropriate structure.
These events can have serious consequences for the entire partnership. Unless the MOA specifically provides for continuity, the death, withdrawal, or bankruptcy of a partner may trigger dissolution of the entire company.
If a partner is declared bankrupt, the company's affairs and personal bankruptcy proceedings become intertwined — since company bankruptcy triggers personal bankruptcy for all partners, and vice versa.
To protect against these scenarios, the MOA must be carefully drafted with continuity provisions, buyout mechanisms, and clear partner exit procedures. Melqart's team builds these protections into every MOA from the outset.
Compared to a BSC (Closed), the General Partnership has relatively straightforward ongoing obligations — but they are still mandatory:
Melqart manages all of these for General Partnership clients — the same proactive compliance service provided to all company types.
The fundamental difference is liability. In a WLL, your liability is limited to the capital you invest — your personal assets are protected. In a General Partnership, your personal assets are fully exposed. This single difference drives almost every other consideration.
For most investors the WLL is the better choice. The General Partnership makes sense only when all partners are fully informed of the liability implications and have a specific professional or structural reason for this structure.
Yes — conversion from a General Partnership to a WLL is possible. The process requires an amendment to the commercial registration, a new or restated Memorandum of Association, and MOIC approval.
The liability exposure during the period the company operated as a General Partnership does not disappear upon conversion — existing creditor claims remain valid against partners personally for obligations incurred during the partnership period.
Melqart handles corporate conversions and restructurings as part of our administration service. If you are currently operating as a General Partnership and considering converting to a WLL for liability protection, contact us for a free assessment of the process and timeline.
Get Started
Tell us about your business and partners and a Melqart advisor will get back to you within 24 hours. We start with a free consultation — including an honest assessment of whether a General Partnership or WLL better suits your specific situation.
General Partnership at a Glance
Not sure if a General Partnership is right for you? Learn about the WLL → — it offers the same commercial flexibility with full limited liability protection.
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