Merchant
Merchant
Definition
Physical person
moral person
Conditions
Professionalism
Obligations
Legal capacity
Regular basis
Majority =21
Commercial
acts
From 18
The act should
be legal
Under 18
By the person’s
name and for
his own account
1
Definition
 Art no 10 of the new commercial code defines the
merchant as: exercises regularly commercial
transactions in own name, and for his own account.
 2- "Every company which takes one of the forms
stipulated in the company law for whichever purpose
it is establish
 From that we can understand that the law recognizes
two kinds of merchants : A person who acts by his own
name and for his a commercial act and takes this act
as a profession. And, a company that takes the form of
commercial company if this company is engaged in
civil acts (e.g. law firms)
Professionalism=Regular basis
 That is to say a merchant is one who operates at least one of
the acts presented by law to be commercial in
 nature such as buying for the purpose to sell or lease, etc.
 Should any one carries a commercial transaction for once,
he cannot be considered a merchant. A man purchase an
aircraft or establishes a company the act is commercial but
he is not a merchant unless he makes this act regularly and
takes it as a profession.
 It was decided that persons who are.- being prevented from
practicing trade such as judges or lawyers are deemed
merchants if they practice these acts on a regular basis in
spite of this prohibition.
Professionalism=Regular basis
 Art. 17 of the new code which stipulates. "If any person
exercises commerce whom is fo,-bidden from trading
by laws, regulations and/or a special system will be
considered as a merchant, and the provisions of
commercial law are applicable to him.
 A profession means that the person involved must
carry on this business regularly as an occupation he
follows for making livelihood. Should a mere employee
has a taxi which he sometimes uses to improve his
income he is not a trader because he does not depend
upon such commercial act for living.
On the merchant's own name, and for his
own ac-count
 It is submitted that exercising of the commercial acts
must be on the merchant's own name, and for his own
ac-count: Thus an employee or sales representative will
not be qualified as merchant but his master is. On the
contrary a commercial agent can be considered a
merchant when he acts independently even for the
principal account or by the principal naive. Such as
brokers, commission agents and commercial agents.
 In the case of agents the issue will depend upon the
control and supervision practiced by the principal and
the kind of independence he has in performing the
job.
On the merchant's own name, and for his
own ac-count
 The question is raised where a man practicing trade behind
the name of somebody else. According to Art 18 of the code
the character of a merchant shall be proved to any-one who
exercises commerce professionally by a false name, or who
is concealed behind another person, besides proving the
said characteristic to the ostensible person.
 Professionalism is not presumed but must be proved. The
burden of proving such thing lies upon the person who
relays upon the character of the merchant. (e.g. man wants
claim bankruptcy of his debtor). However, it could be
proved by the fact that the alleged person has an office and
employees of special skill or by the fact that the person is
registered in the commercial Registry. It is also for the court
to deduce the characteristic of a merchant for someone
On the merchant's own name, and for his
own ac-count
 According to art no. 14 of the new code a man assumes
the character of merchant by advertising it through
journals, circulars radio, television, or any other
means, will be presumed as a merchant. This
assumption can be disproved by proving that he did
not in fact exercise commerce.
 Anyway the state and other organs associations and
departments of public law shall not have the character
of a merchant although commercial law rules will
apply to commercial operations done by them. (art 20
of the code).
Legal capacity
 (1) Anyone reaches the age of twenty one has the right of
exercising commerce in Egypt. The rule will include any
Egyptian woman and also any foreigner even if the law of
his country deems him a minor in such age (21 years)'
 (2)- Egyptians minor, completed 18 years old male or
female can exercise. commerce, subject to the obtaining of
special permission from the competent court.' Such a
person must be express clear and limited. A court permit
may be conditional by restricting certain transactions or
limited to certain fund.
 .A minor who is authorized to practice tirade has full
capacity to carry out all legal operations which his trade requires. He has to fulfill the legal obligations of a
`merchants and can declared bankrupt.
.
 (3) For aliens the matter need more details: alt must be
noted that aliens even adults are prevented from practicing
some kinds of business (e.g. importing, agency).
Merchant’s obligation
Merchant’s
book s
Importance
Kinds
Preserving
conditions
General
journal
5 years
Inventory
books
Capital more
than 20000
Value as
evidence
In a dispute
against a
merchant
For the interest
of a merchant
Merchant x
merchant
Merchant x
civil
Importance of the Merchants Books
 According to the new code any merchant of a capital
exceeds LE 20000 must keep commercial books of
accounts. Such books are of great value in matters of
taxation and evidence of transactions and business.
 First of all they are important for the trader himself to
know where he is standing and so can take business
decisions. It is also important to avoid the-arbitrary
decisions of the taxes department. In bankruptcy it
may prove that the merchant was acting in good faith
and it is not a bankruptcy by deception. Finally the
books played an important role in evidence to
commercial transactions.
Kinds of commercial books
 Any merchant must keep at least two books the general




journal (Day book) and the inventory books (art-21 of the
trade code).
(I) The general journal:
It is a book in which all trade transactions done by a merchant
are recorded in form of entries including his personal
withdrawing. These entries must be recorded daily regularly
and in details, in this book there are two kinds of transactions
to be recorded.
(A) All commercial acts done by the merchant such as selling
and baying goods, lending and borrowing, receiving and
payment accounts.
(8) All the merchant personal withdrawals such as his personal expenditures over himself and his family and over his on
activities.
Kinds of commercial books
 (2) Inventory Book
 It is a book in which a merchant records all the
information about the goods and assets durable or not
in full details at the end of each year.
 There are other books which a merchant should hold
according to nature of his business. As an example the
ledger book, the commercial papers book, the cashier
book and storehouse book.
Commercial books as evidence in lawsuits:
 According to article 17 of-the Evidence Act no.. 25 of 1968
"Commercial books have probative force against merchants" and they shall not be taken as proof against
persons who are not traders in principle. How
commercial books may be taken by a judge as a proof in
lawsuits needs more explanation.
 The litigation may include two merchants everyone is
depending upon his own accounts or one of them is
asking the other merchant to introduce his books to the
court. Or the litigation may be between a trader and
non-trader. The trader depends upon his account while
the non trader may ask him to present his books.
A merchant can lean on his books..
 Contrary to the principles of civil evidence rules, in a
litigation involving two merchants anyone of them can
intro-duce his own books .as evidence before the court.
Three conditions are provided (1) the case between two (or
more) merchants (2) a trade business is the object of the
litigations (3) the books which the trader holds must be
accredited, organized and regularly kept. The court
may ask the other party to the case to introduce his own
books and make cross examination to the books
presented. The trade code made certain rules in this case.
 (1) If .the books of both opponents are regular and the
cross examination results of obvious contradiction between
them the courts has to demand evidence.
 (2) If the opponent has no books or has one which is not fit
with the legal requirements, then the first books should
prevail.