LLC in Morocco: Investors’ preferred company form


LLC in Morocco : the preferred legal vehicle for investors

LLC is the most used legal form for the establishment of a company. Indeed, it represents about 90% of the volume of company creation.

The success of the LLC form in Morocco is in no way to chance. In fact, the LLC form offers tax and legal flexibilities as well as advantages that make it, by far, the legal vehicle of choice.

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These advantages are as follows:

  • Limited liability of the shareholders (in the LLC, they are rather called “associates” or “partners”).
  • Flexibility given to project holders;
  • Ease of implementation;
  • Certain tax advantages, particularly in comparison to partnerships.

The LLC falls within the scope of corporate income tax. Depending on its activity, it also falls within the scope of VAT. Local taxes may also apply depending on the case.

This article provides further clarification about this legal vehicle.

Except in few rare cases, the choice of the LLC is almost automatic. The following analyzes the different advantages of the LLC

Read More: Les formes juridiques de sociétés

LLC in Morocco: a limited liability of partners

SARL au Maroc

Project holders: the LLC is a suitable form for investments

The LLC in Morocco is a commercial company by definition. Indeed, whatever its purpose, the LLC is considered, by law, as a commercial company.

An LLC is a company formed by one partner or more. In Morocco, the partners of an LLC do not obtain the status of trader automatically. Therefore, the LLC form is ideal when one carries out an activity incompatible with the function of trader.

Moreover, in the event of the dissolution or liquidation of an LLC, its partners bear the losses up to the amount their contributions. This is the reason why it is called a limited liability company.

Finally, every investor should consider that the limited liability company is not suitable in the following cases :

  • Firstly : Banks as well as credit institutions
  • Secondly : Insurances. However, agents and brokers can operate under the LLC form
  • Thirdly : Saving and capitalization

Management : Flexibility of the LLC

LLC is hybrid company. Indeed, its design is at the crossroads between a corporation and a partnership.

The LLC in Morocco holds several advantages that appeal to project owners :

  • Number of associates can be up to 50 people ;
  • No minimum number required : an LLC can be established by one associate only;
  •  Simplified incorporation formalities: On average, the time needed to establish an LLC does not exceed 2 weeks (all formalities included) ;
  • No minimum capital required ;
  • Funds blocking is not required (if the capital < 100.000 dirhams) ;

When there is a capital, the partners must release at least a quarter of the capital (25%). Capital release is done either :

  • In the hands of the manager if the capital is less than one hundred thousand dirhams
  • In a blocked bank account otherwise

The LLC must have at least one manager. Manager(s) must be natural persons and not necessarily partners. The latter are named in the articles of association and can be dismissed at any time by the partners.

Appointing an external auditor is not mandatory, unless when the LLC’s turnover exceeds MAD 50 million.

LLC in Morocco : Is it mandatory to have a Moroccan partner ?


It is not mandatory to have a Moroccan associate. A limited liability company’s share capital can be 100% foreign.

It can also be managed by foreigners. The managers can be residents or non-residents. However, their presence in Morocco could be mandatory, especially when creating bank accounts.

The majority of banks require an interview before opening an account.

LLC : The Intuitu Personæ of the partners

The intuitu personæ of the partners is very important in the LLC. No partner may sell his shares to third parties unless the other partners give their approval. However, the transfer of shares between partners is obligation free.

Indeed, when an partner wishes to sell his shares, this transfer is preceded by an EGM. (EGM: Extraordinary General Meeting.)

This meeting rules on the acceptance or not of the new partner. Then, the partners must sign a transfer of shares. Finally, the transfer of shares must be registered and published in the court clerk’s office.


LLC: what is the partner’s responsibility ?

As previously indicated, an LLC is constituted by one or more partners. The partners bear losses only up to the amount of their contributions. As a result, third parties cannot sue them on their personal assets. On the other hand, a trader who operates in the form of a natural person can be sued on his personal assets.

In other words, in the context of judicial liquidation (collective procedure), the partner’s risk is limited to the capital. Indeed, if the assets of the company are not sufficient to cover the liabilities, he loses the sums he contributed during the establishment of the company. Nevertheless, he is not obliged to pay more.

“The partner’s limited liability is, as a matter of fact, the main advantage of the LLC” explains Salaheddine YATIM, Chartered Accountant.

In contrast, this responsibly remains fully in effect in partnerships such as:

  • General partnerships
  • Limited partnerships
  • One-man Business (also known as a trader natural person or a sole-trader enterprise)

SARL au Maroc statuts

However, there are exceptions to the limited liability of partners.

In the case of a managing partner, he is liable for criminal or wrongful acts leading to the cessation of payments. He is also criminally liable in the event of bankruptcy. This offence provided for in the Commercial Code consists in causing or accelerating the bankruptcy of a company in order to make a personal profit. It manifests itself, among other things, by :

  • Concealment of assets,
  • Embezzlement,
  • Paying specific suppliers at the expense of others,
  • The destruction of accounting documents or the falsification of accounts,

In conclusion, it must be understood that in order for it to be taken into account, it is necessary to:

  • Firstly, the partner must also be a manager
  • Secondly, he must have committed voluntary acts to push the company into bankruptcy

How to establish an LLC in Morocco?

To establish a limited liability company in Morocco, one must:

  • Have a corporate address (or a fiscal domiciliation)
  • Obtain a negative certificate
  • Draft articles of associations that comply with the law on Limited Liability Companies. They must be signed by all partners. Moreover, the articles of associations must mention, amongst others:
    • Legal form of the company,
    • Corporate purpose,
    • Identity of every partner, as well as their respective address ;
    • Registered office of the company ;
    • Duration of the company ;
    • Management and their duties ;
    • The name of the company ;
    • Amount of the share capital, and whether it has been paid up ;
    • Share capital distribution amongst partners ;
    • Commercial court on which the company depends ;
    • Terms and conditions related to the increase of reduction of the share capital;

The drafting of the articles of association of a limited liability company should not be taken lightly. Indeed, it determines the obligations and rights of the partners. It also determines the terms of management. Call upon a chartered accountant for the drafting of a statute.

In addition, if there are several partners, it may be necessary to draw up a partnership agreement.

Further formalities

  • Obtaining a funds-blocking certificate if the capital exceeds MAD 100,000 ;
  • Choosing the managers and setting the limits of their missions (if any) ;
  • Legal and administrative formalities. These can be carried out at the RIC (Regional Investment Center) or directly with the authorities:
    • Registration of the articles of association (and other related documents if applicable) ;
    • Obtaining a Business Tax ;
    • Declaration of fiscal existence ;
    • Registration in the trade register ;
    • Registration with the CNSS (National Social Security Fund) ;
    • Legal publicity in the J.A.L (legal gazette) and the B.O. (Official Bulletin)
  • Opening a bank account

SARL au Maroc entreprendre

Opening a bank account requires the constitution of a legal dossier. This dossier consists the following documents (original documents or their certified copies) :

  • Registered Articles of Association
  • Modèle J of the Trade Register
  • J.A.L et B.O announcements
  • National Identity Card of the managers (passports if foreign)

The manager must be present at the bank on the day of the opening of the bank account. As matter of fact, he must sign a specimen signature card

LLC in Morocco : How does it work ?


LLC Manager:

Every LLC has a manager (or several managers) who carries out all the acts of management. Indeed, the manager is responsible for day-to-day operations. For instance, the manager is the only one authorized to sign bank documents and execute banking operations.

The shareholders can limit the manager’s scope of action in the articles of association. This limitation can take the form of :

  • Prohibitions: certain acts such as, for example, the transfer of fixed assets may be prohibited ;
  • Limitations: the manager must have the prior authorization of the shareholders in order, for example, to contract a bank loan.

When a partner is not a manager, he is not authorized to carry out management acts, namely :

  • Moving the bank account ;
  • Hiring new staff members;
  • signing contracts;

The manager is solely responsible for the management. He is, therefore, responsible for his mismanagement. He is also responsible for any criminal acts that have led to a situation of cessation of payment. The manager reports to the partners at the annual general meetings. He also presents annual accounts to the partners.

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Partners’ meetings

At the shareholders’ meeting, the shareholders vote, amongst others, on the following decisions:

  • Approval of the annual accounts ;
  • Verification and ratification of regulated agreements ;
  • Dividends’ distributions (or non-distribution)

The rights of each partner are proportional to his contribution to the company. The partners take decisions in the form of a vote at the meeting.

Although an auditor is not mandatory, it can be requested by any minority shareholder.

Indeed, in order to improve the business climate in Morocco, the law n° 21-19 in force since April 29th , 2019 has made important changes to the law on the LLC. This law gives minority shareholders the following rights :

  • Firstly: Regulation of the period between the decision to distribute dividends and their actual payment ;
  • Second: the possibility for minority shareholders to request the meeting (with a minimum of 10%) ;

In addition, this law introduced the following changes:

  • Right of minority shareholders to include proposals in the draft resolution of the meeting (with a minimum of 5%);
  • Blocking the sale of important assets of the company (with a minimum of 25%) ;
  • Appointment of an auditor by application to a judge (no minimum required).

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LLC in Morocco : Tax system


Corporate income tax applies to the Limited Liability Company under the conditions of ordinary law.

Corporate income tax is calculated on the company’s income. The rate is determined according to a progressive scale ranging from 10% to 31%.

Read also : Corporate Income Tax (C.I.T)

Besides, and depending on its activity, an LLC may be subject to value added tax (VAT). As a general rule, VAT applies to all commercial, industrial and service supplying operations. Agricultural activities are generally outside the scope of VAT. VAT is due on receipts. A limited liability company can, however, opt for the debit system.

Furthermore, the following taxes apply to the LLC :


Please note that: the tax obligations of an LLC take effect as soon as it is established. Some tax returns may be due even in the absence of transactions (quarterly VAT return, year-end balance sheet,…)

In conclusion, we can say that :
  • The LLC displays characteristics that seduce many project holders;
  • It has the fiscal advantage of allowing a submission to the C.I.T, which has a more interesting tax rate;
  • The LLC limits the liability of its partners;
  • There is no obligation to appoint an external auditor ;


As a result, the LLC is the most used legal form by entrepreneurs in Morocco.

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