The Legal Effects Of Violating The Administrative Control-Related Provisions In Joint Stock Companies Under The Jordanian Companies Law And The Jordanian Securities Law

Abstract

This study explored the legal impacts of the violations made by public joint stock companies against the administrative control-related provisions under the Jordanian Companies Law and Jordanian Securities Law. It aims to shed a light on the impacts and consequences that might affect the members and head of the board of directors and staff in those companies due to making violations against the applicable legislations and laws related to the companies’ scope of work.

This article focuses on the type and nature of the penalties set by various laws. It sheds a light on the nature of the violations that might be committed by the he members and head of the board of directors and staff in those companies. Those penalties are enforced because the control must be enforced by the management on those companies. The management shall track any mistake or violation that might harm the interests of the shareholders and the company in general. Thus,    the Jordanian legislator imposed penalties and punishments on any violations committed by the ones responsible for managing the public joint stock companies. Those penalties and punishments vary in terms of harshness.

There is a legal rule suggesting that (the crime doesn’t deemed existent and the punishment can’t be enforced unless there is a legal text suggesting so). The Jordanian legislator set a specific arrangement connected to every violation and the penalty associated with it. Through this article, the researcher identifies the liabilities of the head and members of the board of directors and the staff at joint stock companies vary due to the variation of the violations. The liabilities are categorized into administrative, civil and penal liability. There are various laws that regulate such liabilities and the penalties associated with them. Such laws include: the Companies Law and the Securities Law. They include: the Penalties Law, the Economic Crimes Law and etc.

Several results were reached through this study. Several recommendations were proposed by the researcher of the present study. For instance, it was found that the Jordanian legislator must impose harsher punishments on the violations that negatively affects the legal or financial status of companies.  The managements of companies must empower the Companies Control Department and the Securities Commission to enforce more strict and effective control without interfering in the technical and daily works of companies. The Jordanian legislator must conduct studies about the average duration needed for establishing an independent body responsible for enforcing control over the joint stock companies. He must enforce punishments, placement or refer cases to judicial authorities when necessary. He should enact a law for meeting this goal.