This article covers the legal framework for the misuse of corporate assets in Jordan in 2025. Specifically, it highlights what is considered misuse under Jordanian law, the distinction between civil and criminal liability, and the relevant statutes that professionals and shareholders should be aware of.
Legal Policies on Misuse of Corporate Assets in Jordan
Under Jordan’s Companies Law No. 22 of 1997 (as amended) and the Jordanian Penal Code, the handling of corporate assets by directors and shareholders is governed by clear legislation. The regulatory focus is largely on the protection of third parties and the proper separation of company and personal property. In 2025, these frameworks determine whether misuse of assets is subject to civil, administrative, or criminal consequences.
Summary of Legal Treatment
| Type of Liability | Applicable? | Main Legal References |
|---|---|---|
| Criminal Liability | No | Companies Law No. 22 of 1997 (as amended); Penal Code (general provision only) |
| Civil & Administrative Liability | Yes | Companies Law No. 22 of 1997 (as amended) |
Criminal Liability
As of 2025, Jordanian law does not impose criminal liability for sole directors or sole shareholders who use company assets for personal benefit, provided that such actions do not result in prejudice or harm to third parties. This means that merely blending company and personal assets, in the absence of third-party harm, is not a criminal offence.
Criminal sanctions may apply only if the misuse involves fraud, embezzlement, or causes damage to third parties. For example, Articles 417 and 423 of the Penal Code address such circumstances but do not cover simple misuse without harm. This approach limits criminal prosecution to more severe or externally harmful behaviors, rather than internal company management issues.
Civil and Administrative Sanctions
While criminal penalties do not generally apply in the absence of third-party harm, civil and administrative consequences may be enforced. Directors or shareholders found mixing their own and company assets (but not committing outright fraud or theft) could face penalties or corrective measures under the Companies Law framework. These usually take the form of restitution, loss of office, or administrative sanctions.
Relevant Legal Sources
Key Insights from the 2025 Legal Framework
- Jordan does not criminalize all misuse of corporate assets by sole directors or shareholders.
- Criminal charges require evidence of fraud, embezzlement, or harm to parties outside the company.
- Civil or administrative remedies remain available even for internal asset misuse where no external prejudice occurs.
- The relevant statutes include the Companies Law No. 22 of 1997 (as amended) and general provisions of the Penal Code.
Pro Tips for Managing Corporate Assets in Jordan
- Maintain clear, separate accounting records for company and personal assets to avoid administrative consequences or shareholder disputes.
- If you are a sole director or shareholder, ensure your actions do not harm third parties such as creditors, as this could trigger criminal investigation under the Penal Code.
- Consult the full text of the Companies Law or engage with a local advisor before engaging in any transactions that could be interpreted as misuse of company assets.
- Regularly review updates from the Ministry of Justice to remain compliant with evolving regulations in Jordan.
In summary, Jordan’s legal framework in 2025 is nuanced: simple misuse of corporate assets by a sole director or shareholder, without harming third parties, does not constitute a criminal offense. However, civil and administrative consequences are possible, making diligent recordkeeping and a clear division between corporate and personal assets essential for compliance in Jordan. Criminal liability is generally reserved for more serious misconduct involving fraud or external victimization. Staying informed and maintaining strict governance standards remains the best practice for any business operating in the country.